Topshot – Customers enter an electronics shop in Akihabara district of Tokyo on January 12, 2024.
Richard A. Brooks | AFP | Getty images
Japan’s economy rose 2.2% on an annual basis in the fourth quarter, at a slower compared to the report, complicating the case of the central bank to increase the near-period interest rate, as Tipid domestic demand persists.
The revised data was lower than an average forecast of economists and an early estimate of 2.8% increase.
On a quarter-to-fourth basis, GDP expanded 0.6% with an increase of 0.7% in the initial figures released last month, showing the revised data of the cabinet office on Tuesday.
Japan’s bank is likely to keep the policy rate stable on its next policy METOn March 18-19, Eating, Reuters told. Nevertheless, the rate-setting board can discuss for another rate hike for May, as due to concerns about inflation pressure from inflation and stubborn increase in food costs.
Amidst a broad market recession, Japan’s Nikkei 225 index fell more than 2%. Japanese Yen strengthened 0.32% to trade against Greenback at 146.77. The government increased by 3.7 base points to 1.538%with yields in the government’s 10-year bond.
As the Central Bank had demanded to normalize its ultra-lulose monetary policy last year, it increased the short-term interest rates by a quarter percent to 0.5% in January-its highest level since the depth of the global financial crisis in 2008.
Nevertheless, the latest GDP data marked a notable growth from the pre -quarter when the economy expanded the annual 1.2%. Sonal Desai, Chief Investment Officer of Franklin Templeton Fixed Income in a customer note, said, “This approach supports the rates that the rates will have to face increased pressure as tightening monetary policy.
“BOJ is likely to grow at least twice more times this year, but we are bending three,” Desai said, “It is well expected to be above 1%.”
‘Sticky inflation’
The so-called “core-core” inflation rate, which excludes the prices of both fresh food and energy and is closely monitored by BOJ, climbed by 2.5% in January to 2.5% in January to hit its highest rate since March 2024.
Separate data from the Ministry of Internal Affairs on Monday revealed that domestic expenses climbed in January 0.8% year, according to the Reuters Pol, below the expectations for an increase of 3.6%.
Stephen Agric, head of Japan and Frontier Markets Economics at Moody’s Analytics, said, “The wage increase of sticky inflation and deficiency will further push the actual wage gains, and with it, the domestic consumption will improve.”
The 0.6% increase in the period of October to December was revised in the quarter, compared to the initial reading of 0.5% increase of 0.5% increase in the period from October to December.
Private consumption, which account for more than half of Japan’s economy, was flat in revised reading, with an increase of 0.1% in early reading and 0.7% in the previous quarter.
The economist of Sompo Institute Plus said in a note, “Downward revision in consumer expenses is slightly negative as data to support the increase of booj rate, but it is unlikely to change the assessment of the economy.”
The BOJ has been slated to release the corporate goods price index for January on Wednesday, which charge the prices of goods companies to each other. According to a Reuters pole, jumping 4.0% from a year ago, gauge is expected to show a decline of 0.1% per month.
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– CNBC’s limited Hai ji contributed to this report.
