Japan's economy grew at its fastest clip in over 13 years in the October-December quarter as robust growth in the United States and China boosted exports and spurred business investment.
Defying worries about the strength of the yen, gross domestic product (GDP) expanded by 1.7 per cent from the previous quarter, the biggest gain since April-June 1990 and beating a forecast from economists of 1.1 per cent, government data showed today.
It was the fourth straight quarter of growth, marking the longest period of expansion in Japan since a nine-quarter run that ended in early 1997.
The economy grew by an annualised 7 per cent, exceeding a forecast of 4.6 per cent and comfortably beating the 4 per cent growth in the United States in the same period.
Nominal GDP, which strips out the effects of price changes, rose 0.7 per cent, the third straight quarter of growth.
Strong overseas demand for Japanese digital cameras, flat panel TVs, cars and other goods has helped offset the effects of the high yen, which Japanese authorities have declared Public Enemy No.1 because of its possible impact on exports and profits.
The Japanese government has spent more than 27 trillion yen ($256 billion) since January 2003 to try to rein in the Japanese currency and keep the recovery going.
The yen rose 10 per cent against the dollar in 2003 but companies have adjusted by restructuring and cutting costs. Today it was steady around 105.65 to the dollar.