Topshot – Customers enter an electronics shop in Akihabara district of Tokyo on January 12, 2024.
Richard A. Brooks | AFP | Getty images
Japan’s economic growth slowed down on an annual basis in the fourth quarter, which complicates the case of the central bank to increase more interest rates in the near period.
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.
Reuters reported that the Bank of Japan is likely to keep the policy rate stable in its next policy meeting on March 18-19. 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.
Japanese Prime Minister Shigeru Ishiba said on Monday that the central bank was close to achieving its 2% inflation target. “Bank of Japan is taking various steps to achieve stable prices,” he said.
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.
Bank of Japan governor Kazuo Uaida and other members of the rate-setting board have indicated an increase in further rate if inflation moves towards its 2% inflation target.
The country’s 10 -year government bond yield has recently increased to its highest level since October 2008, amidst continuous inflation in the country, a global sales in bonds, as well as central bank comments that it will continue the Japanese government bond shopping.
Japan’s headline inflation has been above the 2% target of BOJ for 34 straight months, the most recent figure in January at a two -year high of 4%.
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 -BOJ has been slated to issue 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.
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