Japan’s GDP Rises 2.4% in First Quarter

Japan’s economy returned to growth in the first quarter, expanding at its fastest rate in four years after shrinking the previous two quarters, as consumer spending and company investment rose. Gross domestic product rose 2.4%, seasonally adjusted, in the first three months of the year, the Economic Planning Agency said. But the economic report fell short of expectations of 2.6% growth. From a year ago, the economy grew 0.7%. In the fiscal year ended March 31, the economy expanded 0.5%, short of the government’s 0.6% target, Still, that should be enough to boost the ruling Liberal Democratic Party’s bid to retain power at the June 25 national election, allowing it to claim that its policy of pouring tens of trillions of yen into the economy has been a success. The return to growth also could hasten Bank of Japan Governor Masaru Hayami’s push to end the central bank’s policy of keeping interest rates near zero. Hayami has said the policy has given debt-laden companies, and the banks that lend to them, a free ride and delayed restructuring. The policy has eaten into returns earned on savings, which much of Japan’s aging population relies on for income, he said.