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Japan growth rate hits 3.1 percent
 Japan's economy is growing at more than 3 percent a year on strong business investment. YOUR E-MAIL ALERTS(CNN) -- Growth in the world's second-largest economy, Japan, has kicked above 3 percent a year on strong investment by Japanese business. New figures released by the government Monday show that gross domestic product grew 0.8 percent in the first three months of the year over the previous quarter. The annualized rate was 3.1 percent. That was up from the government's initial estimate of 0.5 percent for the quarter and annualized growth of 1.9 percent. The big driver was capital investment, revised upwards from 1.4 percent to 3.1 percent quarter on quarter. Japan's economy has been picking up steam in the past couple of years after losing more than a decade to stagnation. Economic growth last year was 2.8 percent, up from 2.3 percent in 2004 and 1.8 percent in 2003. Barclays Capital economists in Tokyo, Takuji Aida and Yuichiro Nagai said the latest figures confirmed that the Japanese economic revival continued to be led by domestic demand, especially consumption, which grew 0.5 percent quarter on quarter. "We expect growth to remain above potential again in the April-June quarter, then to ease to a more stable level in line with potential for the whole of fiscal year 2007," they noted. Trade figures also released Monday show Japan's current account surplus in April shrank 20 percent from a year earlier to 1.2823 trillion yen ($11.24 billion). This was sharply below the consensus forecast which was for a rise about 9 percent year-on-year to 1.75 trillion yen. According to Barclays Capital, Japan's current account is likely to remain "pinned between the downward trend in the trade account -- which reflects the increase in imports due to high prices of oil and other commodities -- and the upward trend in the income account, which reflects steady returns from overseas investment." Separately, Bank of Japan data showed the corporate goods price index (CGPI) rose 3.3 percent in May from the same month a year earlier, above a consensus forecast of a 2.8 percent rise, Reuters reported. Tatsuo Ichikawa, chief bonds strategist with ABN Amro Securities, said: "The revised GDP growth is in line with expectations and will not affect the outlook for the BOJ's monetary policy. "The revised GDP figure confirms that the recent stock market falls won't prompt the BOJ to change its stance or prevent it from raising interest rates." The yen is trading at about 114.17 to the dollar in Tokyo on Monday afternoon. The share market is flat, with the Nikkei share average finishing the morning session virtually unchanged at 14,746.06. 
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