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Japan tactics to kick-start economy pay off

 

Russell Lynch
Thursday 16 May 2013 09:21 EDT
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Japan’s “shock and awe” tactics to kick-start its sluggish economy paid off today as the world’s third-biggest economy leapt forward in the first three months of the year.

Prime minister Shinzo Abe has made Japan’s biggest effort yet to shake off two decades of economic malaise through a massively expanded money-printing programme and stepping up public spending.

The central bank is also committed to recovering from years of deflation and hit a 2% inflation target in two years’ time.

The latest data showed the economy enjoying its fastest growth for a year over the quarter, advancing 0.9%. This was three times as fast as the 0.3% seen at the end of 2012.

The growth was powered by reconstruction spending from the March 2011 tsunami, recovering housing investment and exports bolstered by the weaker yen. The plunge in Japan’s currency has raised hackles among other major exporters such as South Korea, but the nation has avoided official censure for manipulating its currency from the G7.

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