TOKYO: Japan’s economy expanded at an annualised clip of 0.4 per cent in October-December from the previous quarter, better than the initial estimate for a 0.4 per cent contraction, government data showed on Monday (Mar 11).
The revised figure for gross domestic product (GDP) released by the Cabinet Office compared with economists’ median forecast for a 1.1 per cent uptick in a Reuters poll.
The fresh data meant Japan’s economy – now the world’s fourth-largest behind Germany – avoided a technical recession thanks to companies’ stronger-than-expected spending on plants and equipment.
On a quarter-on-quarter basis, GDP grew 0.1 per cent, compared with the initial 0.1. per cent drop reading and a median forecast for a 0.3 per cent rise.
Capital expenditure increased 2.0 per cent quarter-on-quarter, better than the preliminary 0.1 per cent decrease the government announced but below a median market forecast of a 2.5 per cent rise.
The upward revision came amid growing market expectations that the Bank of Japan could ditch negative interest rates as early as this month, fuelled in part by board members’ recent hawkish comments that Japan was moving towards the central bank’s 2 per cent inflation target.
The BOJ is scheduled to hold a two-day policy-setting meeting on Mar 18-19.
Meanwhile, private consumption, which makes up about 60 per cent of Japan’s economy, fell 0.3 per cent in October-December, slightly worse than the 0.2 per cent drop in the initial estimate.
Japan last week saw inflation-adjusted real wages in January shrinking for the 22nd month in a row, while year-on-year household spending in the same month marked the biggest drop in 35 months.
External demand contributed 0.2 percentage points to real GDP, unchanged from the preliminary reading.