Japan's economy grew a more-than- estimated 3.7 percent last quarter as exports to Asia and emerging markets helped the economy weather a U.S. slowdown.
Gross domestic product in the three months ended Dec. 31 accelerated from a revised 1.3 percent annualized expansion in the third quarter, the Cabinet Office said today in Tokyo. The median estimate of 39 economists surveyed by Bloomberg News was for growth of 1.7 percent.
Toyota Motor Corp. and other exporters are relying on consumers in Asia and emerging economies to make up for slower demand in the U.S., Japan's largest export market. Companies expect demand to moderate this year. Advantest Corp. and Omron Corp. slashed sales forecasts last month as manufacturers cut orders for equipment in anticipation of weaker global demand.
``The U.S. still matters but there's a more balanced source of demand than there was 10 years ago,'' said David Cohen, director of Asian economic forecasting at Action Economics in Singapore. ``That's one reason not to be so pessimistic about Japan.''
The yen traded at 108.22 per dollar at 9:03 a.m. in Tokyo, from 108.21 before the report was released.
The likelihood of a slowdown has probably taken an interest- rate increase by the Bank of Japan off the table. The bank is expected to hold its key rate at 0.5 percent tomorrow and investors see a 47 percent chance of a cut by December, according to calculations by JPMorgan Chase & Co.
U.S., Europe
From the previous quarter, the economy grew 0.9 percent. The U.S. economy grew 0.2 percent in the fourth quarter, slower than the 1.2 percent in the previous three months. The European Union expanded 0.3 percent, less than half the pace of the previous period, economists expect a report to show today.
Net exports -- the difference between exports and imports -- supported Japan's growth for the second consecutive quarter. Record sales to Asia helped protect export growth even as the worst housing recession since 1982 crimped demand in the U.S., Japan's largest market.
Japanese companies are bracing for a slowdown as weakness in the U.S. economy spreads. Machinery orders, an indicator of business spending, fell for a second month in December. Manufacturers plan to cut production in January and February.
Omron, a maker of factory sensors and a supplier of parts to Nissan Motor Co., last month cut its sales forecast for the year ending March 31, citing a drop in domestic orders for sensors used to automate assembly lines.
Advantest, the world's biggest maker of memory-chip testers, last week slashed its sales outlook 22 percent after clients including Intel Corp. reduced orders.
Wage Declines
Japan's domestic economy is also faltering. Wages fell at the fastest pace in three years in December.
Hiring, which has supported consumption in the absence of pay growth, is also showing signs of slowing. Applicants outnumbered job offers for the second straight month in December.
The economy continued to suffer the consequences of a drop in construction. Housing starts plunged in the six months since June because of a permit logjam caused by government regulations designed to stop building fraud.
The latest figures show that the drop in housing starts is slowing and the industry is making up lost ground.
``A recovery in the construction sector could add half a percentage point to GDP growth in 2008,'' said Julian Jessop, chief international economist at Capital Economics Ltd. in London. ``That's enough to counter a smaller contribution from trade. The big unknown is the consumer side.''
Gross domestic product in the three months ended Dec. 31 accelerated from a revised 1.3 percent annualized expansion in the third quarter, the Cabinet Office said today in Tokyo. The median estimate of 39 economists surveyed by Bloomberg News was for growth of 1.7 percent.
Toyota Motor Corp. and other exporters are relying on consumers in Asia and emerging economies to make up for slower demand in the U.S., Japan's largest export market. Companies expect demand to moderate this year. Advantest Corp. and Omron Corp. slashed sales forecasts last month as manufacturers cut orders for equipment in anticipation of weaker global demand.
``The U.S. still matters but there's a more balanced source of demand than there was 10 years ago,'' said David Cohen, director of Asian economic forecasting at Action Economics in Singapore. ``That's one reason not to be so pessimistic about Japan.''
The yen traded at 108.22 per dollar at 9:03 a.m. in Tokyo, from 108.21 before the report was released.
The likelihood of a slowdown has probably taken an interest- rate increase by the Bank of Japan off the table. The bank is expected to hold its key rate at 0.5 percent tomorrow and investors see a 47 percent chance of a cut by December, according to calculations by JPMorgan Chase & Co.
U.S., Europe
From the previous quarter, the economy grew 0.9 percent. The U.S. economy grew 0.2 percent in the fourth quarter, slower than the 1.2 percent in the previous three months. The European Union expanded 0.3 percent, less than half the pace of the previous period, economists expect a report to show today.
Net exports -- the difference between exports and imports -- supported Japan's growth for the second consecutive quarter. Record sales to Asia helped protect export growth even as the worst housing recession since 1982 crimped demand in the U.S., Japan's largest market.
Japanese companies are bracing for a slowdown as weakness in the U.S. economy spreads. Machinery orders, an indicator of business spending, fell for a second month in December. Manufacturers plan to cut production in January and February.
Omron, a maker of factory sensors and a supplier of parts to Nissan Motor Co., last month cut its sales forecast for the year ending March 31, citing a drop in domestic orders for sensors used to automate assembly lines.
Advantest, the world's biggest maker of memory-chip testers, last week slashed its sales outlook 22 percent after clients including Intel Corp. reduced orders.
Wage Declines
Japan's domestic economy is also faltering. Wages fell at the fastest pace in three years in December.
Hiring, which has supported consumption in the absence of pay growth, is also showing signs of slowing. Applicants outnumbered job offers for the second straight month in December.
The economy continued to suffer the consequences of a drop in construction. Housing starts plunged in the six months since June because of a permit logjam caused by government regulations designed to stop building fraud.
The latest figures show that the drop in housing starts is slowing and the industry is making up lost ground.
``A recovery in the construction sector could add half a percentage point to GDP growth in 2008,'' said Julian Jessop, chief international economist at Capital Economics Ltd. in London. ``That's enough to counter a smaller contribution from trade. The big unknown is the consumer side.''
