Japan’s Q4 GDP Posts 0.2% Annualised Gain, Missing Forecasts

Japan Q4 GDP growth returned to positive territory but badly missed forecasts, underscoring the policy challenge facing Prime Minister Sanae Takaichi as households grapple with high living costs and the Bank of Japan edges toward normalisation.

Japan Q4 GDP growth rose an annualised 0.2% in October-December, versus a 1.6% median estimate, after a revised 2.6% contraction in the previous quarter, government data showed.

On a quarterly basis GDP gained 0.1%. Private consumption rose 0.1% as food inflation weighed, while capital spending increased 0.2%, and net exports added nothing.

Analysts said the BOJ is watching wages and inflation more than one weak print.