JAPAN ECONOMY GROWS 1.3 PCT IN OCT-DEC. REVISED UP, ON STRONGER INVESTMENT

TOKYO, March 10 (Bernama-Kyodo) -- Japan's economy expanded an annualised real 1.3 per cent in the October-December quarter, revised up from an initially reported 0.2 per cent increase, on stronger business spending as Prime Minister Sanae Takaichi pushes investment in priority areas, government data showed Tuesday, 

Helped also by an uptick in private consumption, accounting for over half of gross domestic product, the GDP data marked the first rise in two quarters. Yet, crude oil price rises due to a Middle East conflict overshadow the economic outlook for resource-poor Japan, economists say.

Real GDP, adjusted for inflation, grew 0.3 per cent from the previous quarter, compared with the initially reported 0.1 per cent increase, the Cabinet Office said. GDP is the total value of goods and services produced in a country.

Capital spending increased 1.3 per cent in the three months through December, revised up from a 0.2 per cent increase, after data showed solid corporate investment in building data centres and producing semiconductor-making devices amid the spread of artificial intelligence.

With labour costs rising, companies have also been pushing digitalisation and other labour-saving measures, resulting in purchases of software, the economists say.

Public investment was upgraded to a 0.5 per cent dip from a 1.3 per cent decline.

Private consumption grew 0.3 per cent in the October-December period, in an upward revision from a 0.1 per cent climb, reflecting increased demand for new smartphone models, but car purchases declined and persistent inflation dampened spending for food.

The revision was also due to a reduction in the margin of decline for spending on toys, games, fisheries and outlays for dining, a Cabinet Office official said.

Housing investment was slightly revised upward to a 4.9 per cent rise from the 4.8 per cent increase reported earlier.

Exports and imports both slid 0.3 per cent, unchanged from the preliminary reading.

U.S.-bound shipments of cars remained affected by the imposition of higher tariffs by U.S. President Donald Trump that took effect in September. Spending by foreign visitors to Japan, which contributes to export figures, also fell.

Due to the moderate recovery in personal consumption and expected growth in real wages on slower inflation, the Japanese economy is estimated to grow in the January-March quarter, said Yoshiki Shinke, senior executive economist at Dai-ichi Life Research Institute.

He warned, however, that the recent increase in crude oil prices, stemming from U.S.-Israeli attacks on Iran since the end of February, raises uncertainties from the April-June quarter onwards for Japan, which relies almost entirely on foreign energy to power its economy.

Shinke said, "If rising energy prices continue, they will raise inflation," which will hurt the economy by reducing household spending. He added that companies are expected to pass on the increase in costs to consumers by raising the prices of their products and services.

Nominal GDP expanded at an annualised rate of 3.5 per cent, revising up from a 2.3 per cent gain reported earlier.

-- BERNAMA-Kyodo