Commercial and residential buildings at dusk in the Minato district in Tokyo, Japan.
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Japan’s economic expansion during the fourth quarter has been the expectations of analysts for the growth of a quarter and annualized, stimulated by a leap in exports.
Government preliminary data showed on Monday This GDP increased by 0.7% in the quarter, More than the 0.3% increase expected by the economists interviewed by Reuters. He extended by 0.4% in the previous quarter.
A leap in exports has helped stimulate GDP, while domestic demand has been an obstacle to growth, contracting marginally. Capital expenditure also increased by 0.5% in quarter, but missed reuters estimates for an increase of 1%.
Nominal household consumption has increased much faster than actual consumption and their divergence has remained wide, said Krishna Bhimavarapu, Apac economist at State Street Global Advisors, adding that he could activate the “mode of fighting against the ‘ Inflation “of the Bank of Japan.
“At the very least, these data delete fears of blocking consumption and is positive for the Boj to deliver another hike, which could now come as soon as possible,” said Bhimavarapu.
Monday GDP data is in the context of the increase in the Central Bank of Japan at 0.5% – their highest level since October 2008 – and offers it more space to stick to the monetary tightening.
Household expenses in November and October in Japan contracted 0.4% and 1.3%, from year to year in real terms, but it increased by 2.7% in December – massively defeating the expectations from economists interviewed by Reuters and marking his first increase since July 2024.
Citi Katsuhiko economist Aiba warned earlier this month that consumer spending will remain low in the first quarter, providing for a large-scale recovery after the second quarter.
He said the real wages growth should also remain negative in the first quarter, despite the resumption of government’s energy subsidies, under pressure by inflation of the permission of the depreciation of the yen.
On an annualized basis, GDP increased by 2.8%, exceeding the reuters estimate by 1%.
The Japanese economy increased by 1.2% over a year in the fourth quarter, compared to 0.6% in the third quarter.
Despite the better growth than expected in the fourth quarter, the growth of annual GDP has slowed down to 0.1%, a sharp decline compared to the growth of 1.5% observed in 2023.
THE Nikkei 225 dropped by 0.29% after the data version, while the yen Reinforced 0.2% to negotiate at 152.02 against the dollar.
