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Workers assemble vehicles on the production line at the Subaru factory in Ota City, Gunma Prefecture.
Tokyo
Reuters
—
According to government statistics on Monday, Japan's economy grew at an annualized rate of 0.4% from October to December, exceeding the initial forecast of a 0.4% contraction.
The revised gross domestic product (GDP) announced by the Cabinet Office compared with the median forecast of a 1.1% increase in economists polled by Reuters.
The new data means Japan's economy, now the world's fourth largest after Germany, has avoided a technological recession thanks to higher-than-expected corporate spending on plant and equipment.
GDP on a quarter-on-quarter basis increased by 0.1%, compared to the initial forecast of a decrease of 0.1% and the median forecast of an increase of 0.3%.
Capital investment increased 2.0% from the previous quarter, which was better than the government's preliminary figure of a 0.1% decline, but lower than the market's median estimate of a 2.5% increase.
The upward revision is due in part to recent hawkish comments from board members that Japan is on track to meet the central bank's 2% inflation target, raising the possibility that the Bank of Japan could abolish negative interest rates as early as this month. This was carried out amidst growing market expectations that this would happen.
The Bank of Japan is scheduled to hold a two-day policy-making meeting on March 18th and 19th.
On the other hand, personal consumption, which accounts for about 60% of Japan's economy, fell by 0.3% in the October-December period, slightly worse than the initial forecast of a 0.2% decline.
In Japan, real wages after adjusting for inflation in January fell for the 22nd consecutive month last week, and household spending in the same month fell by a year for the first time in 35 months.
The contribution of external demand to real GDP was 0.2 percentage points, unchanged from preliminary figures.