Asian stocks drop despite stronger Japan in first quarter: US data

Asian stocks were lower Monday as investors looked past an upbeat report on Japanese growth to signs that the world’s third-biggest economy would slow in the second quarter. Japan’s economy grew at a faster pace than initially estimated in the January-March quarter on stronger consumer and corporate spending, though economists anticipate slower growth in April-June. The 3.9 per cent annualised growth rate announced Monday by the Cabinet Office was sharply higher than the 2.4 per cent pace initially reported. However, the picture may not be as rosy as the headline number suggests, as analysts expect growth in the second quarter to slow sharply as consumer spending slows and industrial output wanes. On a quarterly basis, the economy grew 1 per cent, compared with the initial estimate of a 0.6 per cent increase. Strong private demand in residential and corporate spending helped push growth higher.