Japan's economy grew more than initially estimated in the April-June quarter, giving another boost to Tokyo stocks and the yen a day after reformist prime minister Junichiro Koizumi swept to a crushing election victory.
On an annualised basis, GDP expanded 3.3 per cent, much stronger than an initial estimate of a 1.1 per cent rise and economists' median forecast of a 1.5 per cent gain, putting Japan on a par with US economic growth during the same period.
The healthy growth figures and Mr Koizumi's stunning election victory on Sunday helped Tokyo's Nikkei share average finish above 12,850 for the first time since 2001 yesterday.
The yen rose on the data to about 109.15 per dollar in early trading before pulling back to about 109.90 yen.
"Second-quarter GDP was revised upwards, representing the well-balanced nature of the recovery in Japan's economy," Bank of Japan governor Toshihiko Fukui told reporters in Switzerland, where he was attending a regular G10 meeting of central bank governors.
Mr Koizumi's Liberal Democratic Party (LDP) took 296 seats in the 480-seat lower house of parliament, the first election in which it has won a majority in the chamber in 15 years.
"The economy is on a recovery trend, which was partly behind a historical election victory for Koizumi," said Naoki Iizuka, chief economist at Dai-ichi Life Research Institute. "This victory will make it easier for him to push forward needed reforms." Japan's economy is emerging from last year's slump as firm domestic demand helps offset a recent slowdown in exports.
Revised data showed GDP rose 0.8 per cent in April-June in real price-adjusted terms, beating both the initial reading for a 0.3 per cent increase and economists' consensus forecast of a 0.4 per cent rise. - (Reuters)
