Japan Q4 GDP likely revised up but weakness persists

Japan Q4 GDP likely revised up but weakness persists
FILE PHOTO: Shoppers check foods at a supermarket in Tokyo, Japan January 10, 2023. REUTERS/Issei Kato

TOKYO: Japan’s economy likely grew a tad faster than initially estimated in the fourth quarter, a Reuters poll showed, though the recovery remains fragile as weak capital expenditure weighs on hopes for a sustained revival in demand.

Revised gross domestic product data out on Mar 9 will probably show the world’s No 3 economy grew 0.8 per cent annualised in October-December, versus an initial estimate of 0.6 per cent, as capital expenditure likely fell a little less than first reported, the Reuters poll of 19 economists showed.

The expansion would translate into a 0.2 per cent gain on the quarter, unchanged from the initial estimate.

Separate data will also likely show a slight decline in household spending and elevated wholesale inflation, suggesting the wave of price hikes from food to energy could weigh on private consumption.

The data next week follows other indicators that showed a big drop in factory output at the start of this year, highlighting the double whammy of a global slowdown and weak domestic demand.

Separate government data out on Mar 10 is expected to show household spending fell 0.1 per cent year-on-year in January. On the month, spending likely grew 1.4 per cent.

Bank of Japan data also out on March 10 will likely show corporate goods prices index grew 8.4 per cent in the year to February. It probably fell 0.3 per cent month-on-month.

Government data out on Tuesday showed factory output shrank the most in eight months in January as falling global demand hit major export sectors such as auto and chip equipment.

Source: Reuters