4:30 PM Tokyo – Rising consumer spending ahead of sales tax and strong capital spending lifted March quarter GDP to an annual rate of 5.9% in Japan. Stocks declined on stronger yen and weaker than expected earnings.
Stocks in Tokyo slipped after weaker than expected earnings and stronger yen overshadowed the GDP growth data.
Japan''s GDP in the March quarter expanded 1.5% from the last quarter after consumer spending rose ahead of sales tax increase on April 1.
The annual rate of 5.9% in the quarter was the fastest pace of growth since 2011 as Japanese companies stepped up investment and consumers loosened control on purse strings.
The growth in the economy was driven by two factors. Consumer spending increased at the fastest pace of 2.1% since 2.2% rise in the quarter ahead of tax increase in 1997.
And capital spending surged 4.9%, the most since 8.2% in the December quarter of 2011 after the triple disaster.
Economists are estimating the economy to contract at an annual rate of 2.2% in the current quarter ending in June.
The Nikkei 225 Stock Average slipped 107.55 or 0.7% to 14,298.21 and the Topix index fell 4.86 to 1,178.29.
The yen closed at 101.94 against the U.S. dollar.
Commodities and resource linked stocks gained for the second day in a row despite China reporting a plunge of 25% from a year ago in new home constructions.
Stocks in Review
Toyota Motor Corp
dropped 45 yen to 5,635 yen. Honda Motor Co
slumped 56 yen to 3,389 yen. Nissan Motor Co Ltd
fell 0.5% to 915 yen.
plunged 110 yen or 6.1% to 1,695 yen after forecasting a loss of 50 billion yen or $490 million for the year ending March 2015 and overall sales are expected to be flat excluding sales from the Vaio PC business unit.
slipped 84 yen to 7,150 yen. Fast Retailing Co Ltd
declined 590 yen to 32,855 yen.
Daiichi Sankyo Company, Limited
was haled at 1,708 yen and pharmaceutical company reported net sales in the year ending in March climbed 12.4% to 1.12 trillion yen from 994.66 billion yen a year ago.
Profit for the year plunged 19% to 53.36 billion yen compared to 65.91 billion yen and diluted earnings per share slipped to 86.41 yen from 90.81 yen a year earlier.
Internet Initiative Japan Inc
rose 0.6% to 2,351 yen after the internet service provider said revenue in the year ending in March jumped 7.6% to 114.27 billion yen from 106.25 billion yen a year ago period.
Net income in the year declined 16.2% to 4.44 billion yen compared to 5.30 billion yen and diluted earnings per share dropped to 50.07 yen from 65.32 yen a year earlier.
Japan Display Inc
slipped 1.7% to 589 yen after the small and medium-size display maker stated net sales in the year ending in March climbed 272.1% to 614.57 billion yen from 165.14 billion yen a year ago.
Net income in the year surged 853.9% to 33.92 billion yen compared to 3.56 billion yen and earnings per share advanced to 135.09 yen from 29.61 yen a year earlier.
Nissan Chemical Industries, Ltd
plunged 5.4% to 1,442 yen after the chemicals manufacturer reported net sales in the year ending in March jumped 6.4% to 163.66 billion yen from 153.81 billion yen a year ago period.