Japan's economy grew more than expected in the fourth quarter, extending recovery from its worst recession, supported by a recovery in external demand that boosted exports and business investment.
Japan's Gross Domestic Product (GDP) rose 3% in the fourth quarter of 2020, beating market expectations for expansion of 2.3%, according to preliminary estimates published at the start of the Asian session.
This growth was driven by an increase in trade mainly from China, the strongest expansion in business investment over the past five years and an increase in household spending aided by government subsidies for travel and dining abroad.
However, the reading also showed a slow recovery from the growth recorded in the third quarter revised, namely, an expansion of 5.3%.
With this recorded growth, it could be a key factor being assessed by the government to reverse the state of emergency in Japan, as the number of daily cases has also shown a decline.
Overall, Japan's GDP contracted 4.8% by 2020, marking the first contraction since the 5.7% fall seen during the 2009 global financial crisis.
Following the approval of the first Covid-19 vaccine on Sunday and the vaccination process to begin this week, the market expects the Japanese economic recovery to return to a stronger track.
