Japan's Economy Growth in Fourth Quarter
Japan's economy grew in the fourth quarter of last year, averting a recession. Real GDP increased at an annual pace of 0.4% instead of contracting. Expectations are mixed on what the latest data might mean for Bank of Japan policy decisions.
Key Points
- Real GDP increased at an annual pace of 0.4% in the fourth quarter
- Japan's economy grew 0.1% in the final quarter of last year
- Recent data showed robust capital expenditures
Pros
- Japan's economy managed to grow, avoiding a recession
- Private capital investment improved, leading to the growth in GDP
- Expectations are mixed on potential interest rate hikes by the Bank of Japan
Cons
- Consumer spending remains weak due to wage growth dulling and inflation
- Private consumption is likely to remain weak
- Yen continues to weaken against the U.S. dollar