Japanese economy accelerates

Japan reported today that its economy grew 1.0 percent in the first quarter, accelerating strongly from a virtually flat performance in the fourth quarter of last year.

The strong growth was driven by a 1.1 percent increase in private consumption. Reconstruction activity following last year's tsunami also helped boost growth. Growth is expected to slow in coming quarters though as the latter fades.

Indeed, a report on Wednesday showed that core machinery orders fell 2.8 percent in March and were up just 0.9 percent for the quarter as a whole.

Wednesday's economic data from the US had been more positive. Housing starts rose 2.6 percent in April while industrial production rose 1.1 percent. However, building permits fell 7.0 percent last month, indicating that the strong growth in starts may not be sustainable.