Japan GDP Growth Expected

Greater capital spending by Japanese firms in the last business quarter is expected to spark an upgrade in economic growth numbers next week.

Spending from July to September rose 5 percent, meaning a likely upward revision in GDP growth in the quarter from 0.9 percent, or an annualized 3.9 percent.

Analysts say the danger is that the burst of investment and growth may actually lead to a slowdown in current quarter spending and a possible GDP contraction.

Japan's economy has slowly improved since the financial crisis, and capital spending by auto and electronics makers led the quarter's growth.

Economists polled by Reuters expect a 0.1 percent contraction in GDP in the current quarter, as exports slow and auto output slumps.

The Bank of Japan eased monetary policy in October by keeping rates at zero and spending $60 billion to buy assets ranging from government bonds to debt.

The yen had appreciated to a 15-year high against the dollar but its retreat to the 84 level has lessened concerns about the impact of the strong currency on the export sector.

The Nikkei share average firmed Thursday, adding to an 8 percent rise in November, as Goldman Sach's predicted a near 20 percent jump in 2011.