Japanese GDP growth may reach three percent in year to March

Economic and fiscal policy minister Heizo Takenaka forecast on Sunday that Japan's growth would easily clear the government target of two percent and may reach three percent in the year to March 2004.
"The government has revised its forecast of the GDP (gross domestic product) to 2.0 percent in the fiscal 2003, but it will top the target with a big margin," Takenaka said in a television interview.
Asked if growth would reach three percent for the fiscal year, Takenaka said: "I think that's possible."
Japan can achieve the 2.0 percent target even if it can show a 3.4 percent contraction in the January-March quarter.
The GDP growth in real terms for the three months to December was revised down to 1.6 percent quarter on quarter from a preliminary 1.7 percent, the government said in March.
On an annualised basis, the world's second-largest economy grew a revised 6.4 percent in October-December in inflation-adjusted terms, down from 7.0 percent reported by the Cabinet Office in February.
In the interview, Takenaka said recent signs of recovery resulted from structural reforms carried out by the government of Prime Minister Junichiro Koizumi.
Japan is in a "crucial time" with the current recovery, led by large manufacturers, finally spreading to boost to consumer spending, Takenaka said.
Household spending in February jumped 5.2 percent from a year earlier for a fourth consecutive monthly gain as the leap-year effect boosted shopping and travel, the government said Friday.
Global investors have projected the expected recovery would not be short-lived, Takenaka said, adding that the forecast was part of the reason for the recent rallies on the Tokyo Stock Exchange.
The benchmark Nikkei 225-issue index hit a 22-month high last week despite negative factors, including a surge in the yen against the dollar.
Takenaka renewed the government's opposition to a "rapid change" in foreign exchange rates, saying it was ready to intervene into the market to curb the yen's rise if necessary.
The yen hit a four-year high against the dollar last week on growing expectations about economic recovery as well expectations that the authorities may intervene but not as aggressively as in the past.