Japan economy grows more than expected after technical recession

Japan’s economy expanded at a faster pace than expected as a further easing of pandemic regulations boosted consumption, a positive outcome that will likely keep speculation simmering of a possible early election and potential central bank policy change.

Gross domestic product expanded at an annualized pace of 1.6% in the first three months of the year for the strongest growth in three quarters, after a technical recession at the end of last year following a revision in earlier figures, Cabinet Office data showed Wednesday. Last quarter’s expansion exceeded analysts’ estimates of 0.8% growth and was also supported by better-than-expected business spending.

The stronger-than-forecast reading bodes well for the nation’s economic recovery and could give Prime Minister Fumio Kishida more leeway to consider an early poll. Kishida is hosting Group of Seven leaders in Hiroshima this week and a successful summit could give his support ratings an additional lift.