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First-Quarter Economic Growth in Japan Higher Than Expected


Japan says its economy expanded faster in the first quarter than expected, while in Australia, the central bank says strong growth is likely to lead to inflation and possible interest rate increases. Claudia Blume reports from VOA's Asia News Center in Hong Kong.

Japan's economy grew at an annualized rate of 3.3 percent in the first quarter, higher than forecast. Growth was boosted by strong investment by Japanese companies in new factories and equipment.

Compared with the previous quarter, gross domestic product grew .08 percent in the three months until March. It was the ninth straight quarter of expansion for the world's second-largest economy - one of Japan's longest periods of growth since the end of the World War II.

In Australia, which posted 3.8 percent growth in the first quarter, the head of the country's central bank, Glenn Stevens, warned that strong economic data mean higher inflation is likely next year.

"That is cause enough to err on the cautious side in setting policy, and to ask whether current settings are restrictive enough," he said.

Stevens did not rule out an interest rate increase, but said there is no need for the central bank to move immediately. The bank raised interest rates three times last year to restrain inflation.

China has tightened rules meant to stop money laundering by criminals and terrorists. The rules require banks in China to report any transactions suspected of being linked to a terrorist organization. Banks that fail to comply will face financial penalties, suspension, or having their business licenses revoked.

Beijing hopes the move will help China become a member of the Financial Action Task Force, an international anti-money laundering organization.

In other news from China, the U.S. Internet company Google signed a deal with the Chinese Internet portal Sina to cooperate on news, advertising and search services. Under the agreement, Google's search service will be embedded in Sina's search box.

And Walt Disney has tied up with India's Yash Raj Films to make animated feature films using the voices of Bollywood stars. Yash Raj Films is one of India's leading producers of traditional song-and-dance love stories.

The companies' first co-production, due for release next year, is to be called "Roadside Romeo," and tells the story of a rich dog roughing it on the streets of Mumbai.

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