ALSO READJapan government upgrades economic view for first time in seven months Japan's robust labour demand bolsters outlook for wage increases Japan machinery orders rise, capex recovery seen intact Japan's robust labour demand bolsters outlook for wage hikes, inflation Bank of Japan board members press for debate on rates, ETF purchases
By Stanley White
TOKYO (Reuters) - Robust consumer spending drove Japan's economy to eight straight quarters of growth in October-December, its longest continuous expansion since the 1980s bubble economy, and evidence that Prime Minister Shinzo Abe's campaign to restore growth after decades of stagnation is bearing fruit.
The long run of growth is also an encouraging sign for the Bank of Japan, hinting that the economy may at last be building enough momentum to lift consumer prices toward its 2 percent inflation target.
Economists expect growth to continue as consumer spending, exports, and capital expenditure improve further.
Japan's economy has now posted the longest continuous expansion since a 12-quarter stretch of growth between April-June 1986 and January-March 1989 around the height of Japan's notorious economic bubble.
The economy expanded at a 0.5 percent annualised rate in October-December, less than the median estimate for annualised growth of 0.9 percent, Cabinet Office data showed on Wednesday.
That followed a revised 2.2 percent annualised increase in July-September.
Compared to the previous quarter, gross domestic product (GDP) grew 0.1 percent, slightly less than the median estimate of 0.2 percent growth and following a 0.6 percent quarter-on-quarter expansion in July-September, Cabinet Office data showed on Wednesday.
Private consumption, which accounts for about two-thirds of GDP, rose 0.5 percent from the previous quarter, more than the median estimate of a 0.4 percent increase and a rebound from a revised 0.6 percent decline in the previous quarter.
Capital expenditure rose 0.7 percent in October-December from the previous quarter, less than the median estimate for a 1.1 percent increase but up for the fifth straight quarter and a sign of sustainable gains in business investment.
Overseas demand subtracted fractionally from GDP in October-December. Exports rose 2.4 percent, but this was offset by a 2.9 percent jump in imports thanks to robust domestic demand.
Since taking office in late 2012, Abe has enacted reforms to draw more women and elderly people into the workforce, raise wages for part-time workers, liberalise the labour market, and encourage business investment.
These policies have taken time to gain traction, but Japan's economic indicators started to turn around in earnest from last year.
(Reporting by Stanley White; Editing by Eric Meijer)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)