The Japanese economy outperformed predictions because trade and net trade helped fuel the third successive quarter of growth that would keep the Bank of Japan the right track for further interest rates. Enhanced yen.
Article content
(Bloomberg) – The Japanese economy outperformed predictions because commercial spending and net trade helped fuel the third quarter in a row from growth that will keep the Bank of Japan on the right track for further high interest rates. Enhanced yen.
Article content
Article content
GDP grown at an annual pace of 2.8 % in the three months to December of the previous period, the Cabinet Office said on Monday. Compared to the revised 1.7 % section and a shortcut to a 1.1 % consensus.
Advertisement 2
This announcement has not yet been downloaded, but your article is continuing below.
Article content
While on Monday data showed that the Japanese economy is still steadily growing, there were also pockets of weakness in the report. Net exports partially grown because imports fell, as they are suspicious of the validity of the local demand.
Special consumption increased in the quarter, as it exceeded predictions, but it slowed significantly against the previous quarter. On an annual basis, the value of private consumption was in 2024 of what it was a decade ago.
However, the numbers are likely to give the central bank powers that they can continue to search for opportunities to relax on the super -policy settings between BOJ with high gradual prices.
“Personal consumption has slowed down and inflation is inflation on consumption because real wages are struggling to pick up,” said Yucci Kodama, the economist at the Meiji Yasuda Research Institute. “However, in general, the economy grows, so BOJ is likely to continue the right track and gradually raise interest rates.”
What Bloomberg Economic says …
“The increase in investment and flexible consumption indicates that the high rates of BOJ did not get the wind out of the private sector.”
Article content
Advertising 3
This announcement has not yet been downloaded, but your article is continuing below.
Article content
– Taro Kimura, senior Japanese economists
Click here to read the full report
GDP numbers will be reviewed in March, about a week before the next BOJ Policy Report meeting. Economists expect BOJ to wait until summer before raising interest rates again. The yen is strengthened to 151.75 per dollar from 152.36 before the release.
Prime Minister Shigro Ishiba sought to address the effect of inflation with a set of price reduction measures as part of the economic stimulus package. More friendly measures of voters may come, as the Ishiba minority government is negotiating with pressure on the smaller opposition parties for the highest income tax and free school fees for the secondary school to be included in the budget for the year that begins in April.
The net exports contributed to the decrease in imports in the quarter due to the low energy prices. Exports have been picked up moderate, and strong spending is assisted by incoming tourists, whose expenses are classified as service exports.
Ishiba will need his economic package to support growth in the coming months, given that the expectations of trading in Japan are increasingly uncertain because US President Donald Trump threatens to impose a tariff on his commercial partners. Tokyo tries to distinguish the details of Trump's mutual tariffs while also seeking to win the exclusion of fresh definitions of the president on steel and aluminum.
Advertising 4
This announcement has not yet been downloaded, but your article is continuing below.
Article content
“The expectations of goods exports are somewhat uncertain, but the services are likely to continue, especially the incoming demand, in growth, although it is somewhat slower,” said Kazuki Fujimoto, an economist at the Japan Research Institute. “In general, I think exports are moving in a positive direction.”
The strong result in the fourth quarter of the economy allowed to rid 0.1 % of growth in 2024, and the market expectations of shrinkage. The nominal GDP topped 600 trillion yuanin for the first time in history, which represents a previous goal for Prime Minister Shinzo Abe almost a decade ago.
However, the pace of annual growth was the weakest progress since the epidemic.
The weak yen stopped Japan's position in the global economy by reducing the value of its goods and services in dollars. Japan is now occupying the fourth largest economy after the United States, China and Germany. Economists expect India to overcome Japan in the coming years. The yen fell more than 10 % against the dollar last year, even as the Japanese authorities intervened in the foreign exchange market several times to support them.
– With the help of Erica Yukuama.
(Updates with economists' comments)
Article content