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Japan's economy leaves recession Japan's economy leaves recession
(30 minutes later)
Japan has exited recession after recording growth of 0.9% in the April-June quarter, compared with the first.Japan has exited recession after recording growth of 0.9% in the April-June quarter, compared with the first.
The economy had shown four consecutive quarter-on-quarter contractions. The economy - the world's second-largest - had shown four consecutive quarter-on-quarter contractions.
Correspondents say the rise is due to a huge stimulus package and it is unclear whether the momentum will be sustained.
Recent figures have shown other nations coming out of recession, including Germany, France and Hong Kong, a sign the global slowdown is easing.Recent figures have shown other nations coming out of recession, including Germany, France and Hong Kong, a sign the global slowdown is easing.
If Japan's latest quarterly rate were maintained for a full year, the economy would grow 3.7%, figures from the Cabinet Office revealed. However, the Nikkei Stock Average has been unimpressed by the latest figures - in early morning trading in Tokyo the index was down more than 2%.
'Positive contribution''Positive contribution'
Japan - the world's second-largest economy - officially fell into recession last year. If Japan's latest quarterly rate were maintained for a full year, the economy would grow 3.7%, figures from the Cabinet Office revealed on Monday.
The second quarter expansion this year came after a dramatic fall in January-March as the world economic slowdown hit Japanese exports hard. Japan's central bank has been cautious in its outlook
The second quarter expansion was aided by a key government stimulus package, analysts say. Japan officially fell into recession last year and there was a dramatic fall in growth in January-March as the world economic slowdown hit Japanese exports hard.
Japan has been cautious in its economic outlook Massive government stimulus measures helped to boost the economy, including cash handouts and subsidies to buy energy efficient cars and home appliances, the BBC's Roland Buerk in Tokyo says.
But the BBC's Roland Buerk in Tokyo says Japan could still face a long road to sustainable recovery. Manufacturers also benefited from recovering demand in China and other markets.
But Japan could still face a long road to sustainable recovery, our correspondent says.
Junko Nishioka, chief economist at RBS securities, told Reuters the latest figure was "very good".Junko Nishioka, chief economist at RBS securities, told Reuters the latest figure was "very good".
"The positive contribution of public spending is likely to continue, so I don't think there will be a return to [contraction], as feared by some," the economist added."The positive contribution of public spending is likely to continue, so I don't think there will be a return to [contraction], as feared by some," the economist added.
European recovery
Japan is heavily reliant on its exports.Japan is heavily reliant on its exports.
The slowdown in the US has hit it hard as American consumers have limited their spending.The slowdown in the US has hit it hard as American consumers have limited their spending.
In a recent Bank of Japan report, the central bank underlined its cautious view of the economy.In a recent Bank of Japan report, the central bank underlined its cautious view of the economy.
While it said conditions in the Japanese economy had stopped worsening, it warned that unemployment would stay high and consumer spending low.While it said conditions in the Japanese economy had stopped worsening, it warned that unemployment would stay high and consumer spending low.
Last month, the bank forecast that Japan's economy would shrink by 3.4% in the 12 months to 31 March 2010.Last month, the bank forecast that Japan's economy would shrink by 3.4% in the 12 months to 31 March 2010.
The French and German economies both grew by 0.3% between April and June, bringing to an end recessions in Europe's largest economies that have lasted a year.The French and German economies both grew by 0.3% between April and June, bringing to an end recessions in Europe's largest economies that have lasted a year.
Analysts had not expected the data, suggesting recovery could be faster than previously expected.Analysts had not expected the data, suggesting recovery could be faster than previously expected.
And Hong Kong recorded growth of 3.3% in the three months from April to June.And Hong Kong recorded growth of 3.3% in the three months from April to June.
That data was also better than had been expected, with the government subsequently increasing its forecast for growth in the whole year.That data was also better than had been expected, with the government subsequently increasing its forecast for growth in the whole year.