(Adds details on market reaction, BOJ policy change)
* Annualised Q3 GDP growth revised to +2.5 pct vs prelim
* Q3 GDP grows 0.6 pct qtr/qtr vs prelim +0.3 pct
* Growth boost follows upward revision to capex
* Real wages rise for first time in almost a year
By Stanley White
TOKYO, Dec 8 (Reuters) - Japan's economy grew twice as fast
as originally estimated in the third quarter, thanks to a
business spending splurge and buoyant exports, supporting the
central bank's recent signals that it will shift away from
The world's third-largest economy grew an annualised 2.5
percent in July-September, revised data showed on Friday,
handily topping forecasts and beating the preliminary reading of
a 1.4 percent expansion.
The better growth numbers were bolstered by a significant
upgrade in capital expenditure, driven in part by a surge in
tourism following the government's eased visa requirements this
year. They also mark seven straight quarters of expansion, the
best uninterrupted run of growth since 1994.
"You can say 'Abenomics' is doing well and producing
results. Monetary policy is contributing to nominal growth,"
said Hiroshi Miyazaki, senior economist at Mitsubishi UFJ Morgan
Stanley Securities, referring to Prime Minister Shinzo Abe's
aggressive economic stimulus policies introduced since coming to
"Revisions to past data show the government's fiscal
spending had a bigger impact than previously thought. The
structural reform that has made the most obvious impact is
allowing more tourists to visit Japan."
Tokyo's equity markets took the upward revision in its
stride while the yen fell versus the dollar due to optimism
about the U.S. jobs report due later on Friday. However, rising
corporate earnings and solid growth have more broadly this year
underpinned benchmark Nikkei stocks, which have gained 19
percent in 2017.
Separate data showed real wages rose 0.2 percent in October
marking their first rise since December 2016 in a sign a tight
job market may finally be leading to higher salaries, welcome
news for policymakers.
Tourism and trade have been big drivers of Japan's economy
Robust global demand for electronics goods has boosted the
country's high-end tech sector while eased restrictions on visas
for tourists from China have also been a major driver of
In October, overseas visitors to Japan jumped 21.5 percent
from the same period a year ago to reached a record high for the
month of October. Tourists from China rose 31.1 percent.
The third quarter GDP figures follow the upwardly revised
2.9 percent annualised growth in April-June and translate into
quarter-on-quarter growth of 0.6 percent, double the preliminary
However, the strong headline GDP numbers masked the
continuing pains policymakers face in seeking to boost consumer
spending through their ultra-loose monetary policy.
The private consumption component of the GDP data fell 0.5
percent in July-September, unchanged from the preliminary
reading, with consumers spending less on cars, dining out, and
mobile phone subscriptions. Some economists had expected a
slight upward revision in consumption.
Still, the data comes amid the strongest signals yet Bank of
Japan Governor Haruhiko Kuroda could shift monetary policy away
from its ultra-accommodative settings and allow rates to rise as
the economy improves.
On Thursday, Kuroda said changes in the economy and
financial system could trigger a hike in the bank's yield
targets, one of its key monetary policy levers. He also for the
first time acknowledged the risks current policy posed to
financial stability, as low interest rates eat into banks'
While some economists say the rate of growth reported on
Friday is unsustainable, they remain confident that the economy
will continue to expand next year at a moderate pace.
The government agreed earlier on Friday a spending package
to subsidise education and encourage more corporate investment,
which could support further growth.
"The economy is doing well, but annualised growth above 2
percent seems a little too quick," said Norio Miyagawa, senior
economist at Mizuho Securities.
"I expect that exports and capital expenditure will lead
growth next year, but the pace will moderate to around 1
Japan's 2.5 percent annualised growth compares with 3.3
percent growth in the United States and 2.3 percent year-on-year
growth in Germany during the same quarter.
(Reporting by Stanley White; Editing by Eric Meijer and Sam
First Published: 2017-12-08 01:56:42
Updated 2017-12-08 11:41:16
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