TOKYO (Reuters) – Japan’s economy has fallen into recession, losing its title as the world’s third-largest economy to Germany and raising doubts about when the central bank would begin winding down its ultra-fiberish monetary policy. accommodating.
Some analysts are already warning of a further decline in the economy in the current quarter, while weak demand in China, sluggish consumption and production shutdowns at one of Toyota’s units seem to indicate that the recovery of The Japanese economy will be difficult.
Japan’s gross domestic product (GDP) fell by an annualized rate of 0.4% in the October-December period, after a contraction of 3.3% in the previous quarter, government data released Thursday showed. Analysts polled by Reuters expected growth of 1.4% on average.
A recession is defined by two consecutive quarters of decline in GDP.
Although many analysts expect the Bank of Japan (BoJ) to gradually wind down its massive monetary stimulus this year, the data could call into question central bank forecasts that rising wages will support consumption and sustainably maintain inflation around its 2% objective.
“Two consecutive declines in GDP and three consecutive declines in domestic demand are bad news, although the data can still be revised,” said Stephan Angrick, chief economist at Moody’s Analytics.
Japanese Economy Minister Yoshitaka Shindo stressed the need to achieve higher wages to support consumption, which he described as “lacking momentum” due to rising prices.
“The BOJ comprehensively examines various data, including those relating to consumption, and risks to the economy to (decide on) the direction of its monetary policy,” he told a conference press after the publication of the data.
According to official data, private consumption – which represents more than half of Japanese GDP – fell by 0.2% in the fourth quarter, while analysts expected an increase of 0.1%.
External demand added 0.2 percentage points to growth, while analysts expected a contribution of 0.3 points.
(Reporting Leika Kihara and Tetsushi Kajimoto; Camille Raynaud)
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