The economy in Japan grew at a rate twice as fast as was estimated originally during the third quarter thanks in part to a splurge in business spending and strong exports, supporting the recent signals by the central bank it would shift away from its crisis-era policy.
The third largest economy in the world grew at an annualized rate of 2.5% between July and the end of September, showed revised data released on Friday, which easily topped forecasts and beat the initial reading of growth of 1.4%.
The better numbers in growth were helped significantly by an upgrade in its capital expenditure, driven partly by the surge in tourism following the easing of visa requirements by the government in 2017. It also marked seven consecutive quarters of growth, the best run of uninterrupted growth dating back to 1994.
One analyst said that Abenomics was flourishing and producing the results that were expected of it. Monetary policy has contributed to the growth as well said the analyst. Abenomics is referring to the aggressive economic stimulus plan introduced by Prime Minister Shinzo Abe since he took power.
Revisions to the past data show the fiscal spending by the government had more of an impact than initially thought. The biggest structural reform to make an impact is allowing more tourists into Japan.
Tokyo’s equity markets responded to the upward revision in stride, as they the yen dropped against the dollar as optimism about the jobs report in the U.S. that will be released on Friday morning.
However, rising earnings at the corporate level and solid growth have underpinned more broadly stocks on Nikkei the benchmark which is up 19% during 2017.
In other separate data real wages were up 0.2% during October marking the first increase since December of 2016 in a sign that the tight job market could finally lead to an increase in salaries.
Trade and tourism have been significant drivers of the economy in Japan for 2017.
Robust demand globally for its electronic goods has increased the high-end tech sector in Japan while easing restrictions on visas for tourists have also been strong drivers of economic activity.
During October, visitors from overseas to Japan were up 21.5% from the same month one year ago, to reach a record high for October. Tourists entering from China were higher by 31.1%.
The figures for GDP for the third quarter follow the upward revised annualized growth of 2.9% in the April through June quarter.