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Abenomics stimulate Japanese recovery

FXstreet.com (Barcelona) - Monetary stimulus introduced by Japan's PM Shinzo Abe and the Bank of Japan, also known as “Abenomics”, resulted in two straight quarters of economic growth in the country.

Data released by the Japanese government shows that on a quarterly basis the country's economy grew 0.9% between January and March, which implies a 3.5% year-over-year expansion, the largest among all of the G7 countries.

The improvement is also a result of growth in private consumption, which increased by 0.9% in the first quarter of the year (compared with 0.4% growth in the previous quarter) and which constitutes 60% of the final indicator, as well as public expenditure, which rose 0.6%, slightly less than in the last quarter of 2012.

Additionally, the fall of the yen boosted exports, which grew 3.8%, after falling 2.9% between october and december 2012.

According to Raymond Van Der Putten further success of Abenomics depends on whether the Japanese government carries out all of the planned actions. "In January, the government announced a substantial stimulus package (JPY 10 trillion) and the BoJ raised its inflation objective to 2%. In April, the BoJ announced the doubling of the monetary base to JPY 270 trillion by the end of 2014," the analyst reminds adding that the next step is the presentation of the new growth strategy, scheduled for June. "This might be crucial for the success for Abenomics," he suggests.

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