Japan dodges recession as Q3 GDP revised up

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Japan's economy dodged a technical recession in the third quarter as business investment perked up, revised data showed Tuesday, easing pressure on the Bank of Japan to provide more stimulus next month.

Revised government data on Tuesday showed Japan's gross domestic product (GDP) in the third quarter rose at a 1 percent annualized rate, compared with a preliminary reading of a 0.8 percent contraction.

Business investment during the quarter climbed 0.6 percent in the third quarter, reversing the preliminary 1.3 percent quarterly drop.

The result compared with the median estimate of 0.1 percent growth in a Reuters poll of economists. A technical recession is usually defined as two consecutive quarters of economic contraction from the previous three months.

The data released Tuesday showed that revised third-quarter GDP was up 0.3 percent on-quarter. The preliminary release had shown an on-quarter decline of 0.2 percent.

A revision showing even just a glimmer of growth would be a boon for policymakers struggling to energize Japan's listless economy and to convince skeptics that Prime Minister Sinzo Abe's "Abenomics" policies were working.

"Looking ahead, upbeat business surveys and a rebound in industrial production suggest that economic activity will continue to recover this quarter," said Marcel Thieliant, Japan economist at Capital Economics.

"With underlying inflation still strong, the Bank of Japan will likely leave policy settings unchanged at its January meeting unless next week's Tankan disappoints significantly," he said.

- Reuters contributed to this report.

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