Japan ends recession as quake scars heal; outlook dim (Reuters)

TOKYO (Reuters) ? Japan's economy rebounded as expected in the third quarter from a recession caused by a devastating March earthquake on robust exports and consumption, but persistent yen strength and sluggish global growth cloud its outlook.

Gross domestic product grew 1.5 percent in July-September from the previous quarter following three quarters of contraction, matching the median estimate by economists.

On an annualised basis, the economy expanded 6.0 percent against a forecast of a 6.1 percent rise.

Japanese policymakers worry the yen's rise driven by safe-haven demand and doubts about Europe's ability to contain its debt crisis could stall export growth and damage the economy before reconstruction spending trickles in.

Some economists predict the economy may shrink again in the final quarter of this year as floods in Thailand and moderating growth of emerging economies add to its woes.

"Growth in the fourth quarter is likely to slow partly due to the flooding in Thailand," said Yasuo Yamamoto, senior economist at Mizuho Research Institute in Tokyo.

"Looking further ahead, public works spending is likely to start rising as reconstruction work gathers pace and this will contribute to GDP. However, external demand isn't likely to contribute much to Japan's growth in the future due to Europe's problems."

Net exports contributed 0.4 percentage point to GDP growth, the first positive contribution in five quarters, thanks to companies' quick efforts to mend supply chains and factories broken by the March earthquake and tsunami.

Private consumption, which makes up about 60 percent of the economy, grew a stronger than expected 1.0 percent, while corporate capital spending was up 1.1 percent in line with forecast.

Japan's economy was knocked into a recession by the March disaster that devastated northeast coasts and triggered the world's worst nuclear crisis since Chernobyl In 1986.

Its recovery prospects are increasingly under threat despite Tokyo's attempts to tame the high-flying currency, driven by safe-haven demand and doubts about Europe's ability to contain its debt crisis.

Japanese authorities sold a record amount of yen worth an estimated 7.7 trillion yen($100 billion)and the Bank of Japan eased monetary policy last month but those steps had only short-lived impacts.

Data last week showed companies were pessimistic about the outlook, although the planed 12.1 trillion yen ($157 billion)supplementary budget to finance post-quake reconstruction keeps intact market expectations for a boost from reconstruction-related demand.

(Reporting by Rie Ishiguro; Editing by Tomasz Janowski)

Source: http://us.rd.yahoo.com/dailynews/rss/economy/*http%3A//news.yahoo.com/s/nm/20111114/bs_nm/us_japan_economy

espn magazine espn magazine anywhere but here wall street protesters att new york yankees pittsburgh penguins