Japan's quarterly growth revised downward

TOKYO, Dec. 9 (UPI) -- Japan's economy, facing declining prices and lower capital spending, grew 1.3 percent in the last quarter against an earlier estimate of 4.8 percent.

The Cabinet office said the sharp downward revision from the previous preliminary figures for the quarter ended September was largely due to weaker capital investment, Kyodo News reported.

While the world's second-largest economy, recovering from its worst post-war recession, showed continued growth, the pace was slower than in the April-June quarter, the government said.

"The latest data showed anew that companies remain reluctant to make fresh capital investment," spokesman Keisuke Tsumura told reporters.

Quarterly capital investment was actually down 2.8 percent form the previous quarter against the preliminary forecast of an increase of 1.6 percent.

Consumer spending, which accounts for about two-thirds of Japan's gross domestic product, rose 0.9 percent compared with the preliminary estimate of 0.7 percent.

The government Tuesday announced an additional 7.2 trillion yen, or $81 billion, stimulus package to shore up the economy, which has been hit by a combination of deflationary trends, a strong yen that makes exports dearer, sluggish domestic spending and high unemployment.

Separately, the country's central bank last week pumped 10 trillion yen, or $115 billion, to make three-month loans to financial institutions at a fixed interest rate of 0.1 percent using collaterals such as government bonds and corporate debt to support the economy. The decision is meant to fight deflation and control the rising yen by further easing monetary conditions.