Japan’s economy grew at a better-than-expected annual rate of 2.8 percent in the October-to-December quarter last year, underlined by steady exports and moderate consumption.
On a quarter-to-quarter basis, the world’s fourth-largest economy grew 0.7 percent for its third straight quarter of growth, the Japanese Cabinet Office reported yesterday in its preliminary data.
The fourth-quarter figure was more than double market expectations of 0.3 percent growth.
Photo: EPA-EFE
For the whole of last year, the Japanese economy eked out 0.1 percent growth in seasonally adjusted real GDP, the fourth straight year of expansion but down from 1.5 percent the year before, the data showed.
Private consumption grew at an annual rate of 0.5 percent during the three months through December, holding up while losing momentum. Exports jumped 4.3 percent, and capital investment increased 0.5 percent.
Some analysts think the anticipation of US President Donald Trump’s tariffs might have lifted trade.
Unlike the US and some other nations, Japan has been dogged by deflation, and these lower prices stifle growth. However, recent wage growth has kept deflationary trends in check.
Recent data show inflation is at about the Bank of Japan’s target of 2 percent. Higher prices are crimping consumer spending, which makes up for more than half the economy.
The central bank might move to further raise interest rates, which were at zero or below zero for years to wrest the economy out of deflation. It raised its key interest rate to about 0.5 percent from 0.25 percent last month, saying that inflation is holding at a desirable target level. The next monetary policy meeting is next month.
“Stronger growth may reinforce expectations for the Bank of Japan to push through with further hikes, while the slowdown in private consumption growth may be addressed by the prospects of higher wages ahead,” IG Asia Pte market strategist Yeap Jun Rong (葉俊榮) said.
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