Japan is out of recession: Economy grew 2.2pc in the fourth quarter sending shares near an eight-year high
Japan a has emerged from recession in the fourth quarter, the latest official figures revealed, sending Japanese shares to their highest level in eight years despite slower than expected economic growth.
The world's third-largest economy grew by 2.2 per cent in the three months to December on an annualised basis, missing expectations of 3.7 per cent . The economy grew 0.6 per cent quarter-on-quarter, below forecasts of 0.9 per cent.
Despite those lower-than-expected figures.the Nikkei 225 hit 18,047.07 in early trading, the highest level seen since July 2007.
The technical recession, following two consecutive quarters of the economy contracting, was also worse than first thought. Official figures showed the economy shrank by 2.3 per cent, a downwards revision from the previous 1.9 per cent.
The recovery, however fragile, will be welcomed by Japanese Prime Minister Shinzo Abe following the country's unexpected slip into recession towards the end of last year which caused snap elections and plans for a second sales tax hike to be shelved.
The first rise in sales tax from five percent to eight per cent in April dampened growth through a slowdown in spending by consumers, which accounts for around 60 per cent of the Japanese economy, economists believe.
Private consumption grew by 0.3 per cent in the fourth quarter according to the official figures, below the 0.8 per cent expected, and business spending also disappointed, with growth of 0.1 per cent compared to forecasts of one per cent.
Despite the fall into recession, Abe returned to power in December's elections to continue with his three-point plan for economic recovery, dubbed Abenomics. He approved a $29bn (£18.8bn) stimulus package at the end of last year in a bid to revive the flagging economy.