TOKYO: Japan’s economy eked out an annualised 0.2% expansion in the October-December quarter, government data showed on Monday, scraping back to growth as corporate investment only just reversed its previous decline.<\/p>\n
The reading suggests the drag from U.S. tariffs is fading slowly, giving the Bank of Japan reason for cautious confidence as it keeps lifting interest rates to normalise monetary policy.<\/p>\n
Fresh off a sweeping election victory, Prime Minister Sanae Takaichi’s government is also preparing to ramp up investment through targeted public spending in sectors seen as vital to economic security.<\/p>\n
The increase in gross domestic product, however, fell short of a median market estimate of a 1.6% gain in a Reuters poll, and followed a larger revised 2.6% contraction in the previous quarter.<\/p>\n
The reading translates into a quarterly rise of 0.1%, weaker than the median estimate of a 0.4% uptick.<\/p>\n
Economists project the world’s fourth-largest economy would continue to expand at a gradual pace in coming months.<\/p>\n
A survey this month by the Japan Center for Economic Research showed 38 economists forecast an average annualised growth of 1.04% in the first quarter and 1.12% in the second quarter this year.<\/p>\n
Private consumption, which accounts for more than half of economic output, rose 0.1% in October-December, matching market estimates.<\/p>\n
It cooled from the 0.4% rise in the previous quarter, indicating that persistently high food costs remain a drag on household spending.<\/p>\n
Capital spending, a key driver of private demand-led growth, rose 0.2% in the fourth quarter, versus a rise of 0.8% in the Reuters poll.<\/p>\n
Net external demand, or exports minus imports, contributed nothing to growth, versus a 0.3 point drag in the July-September period.<\/p>\n
Exports posted a milder drop after the United States formalised a baseline 15% tariff on nearly all Japanese imports, down from 27.5% on autos and initially threatened 25% on most other goods. – Reuters<\/p>\n
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