Japan’s economy has narrowly avoided a recession, as shown in the final GDP figures for Q4. The revised data indicates a modest growth of 0.1% qoq, a positive swing from the preliminary estimate of -0.1% qoq contraction. On annualized basis, GDP expanded by 0.4%, contrasting sharply with initial reports of -0.4% decline.
The main driver behind this upward revision was significant increase in capital expenditure, which surged by 2% qpq, deviating markedly from the initially estimated -0.1% qoq drop. However, private consumption, accounting for approximately 60% of Japan’s economy, presented a less optimistic picture, declining by -0.3% qoq, a slight deterioration from the provisional figure of -0.2% qoq.
This latest economic data comes at a crucial time, but it does not seem to deter BoJ from considering an interest rate hike for the first time since 2007, scheduled for March 19. The anticipation builds around the annual Spring wage negotiations, which have so far shown strong momentum. Positive outcomes are also expected from the forthcoming results from Rengo, Japan’s largest union group, on March 15.
