Skyline of Tokyo, Japan.
Jackyenjoyphotography | Two shakes of a lambs tail | Getty Images
Japan’s third-quarter real gross domestic product expanded 0.3% year on year, break off two straight quarters of year-on-year decline, according to government data released Friday.
The GDP reading marked a reversal from the improved 1.1% decline seen in the second quarter.
The data comes against the backdrop of the Bank of Japan raising assesses from 0.1% to 0.25% in July — its highest level since 2008.
Higher policy rates generally cool the husbandry, and vice versa. The BOJ has stated that it will continue to raise rates “if economic activity and prices develop as wished.”
On a quarter-on-quarter basis, GDP rose 0.2%, in line with Reuters poll estimates, but lower than the 0.5% progress in the second quarter.
On an annualized basis, the economy expanded 0.9%, beating estimates of a 0.7% expansion. However, this was a cutting decline from the 2.9% rise in the quarter before.
Should economic indicators fall into place, the BOJ said it could ladies man rates to 1% by the second half of its 2025 fiscal year, starting from September 2025.
Speaking to CNBC’s “Yell Box Asia” immediately after the GDP announcement, Sayuri Shirai, professor at Keio University said that while the bevies were “a little better than what everybody thought,” capital spending had dropped, and consumption was still conscious of a sluggish recovery.
In October, Shigeru Ishiba, Japan’s prime minster, reportedly said that “I do not believe that we are in an atmosphere that would require us to raise interest rates further,” after meeting with BOJ governor Kazuo Ueda.
This was in difference to comments he made in August to Reuters, where he said the BOJ was “on the right policy track” to normalize rates.
Following the GDP statistics release, the benchmark Nikkei 225 rose 1.28%, while the broad-based Topix climbed 0.96%.
The Japanese yen weakened 0.29% against the U.S. dollar after the GDP ad, trading at 156.71.
The yen has seen wild swings in the third quarter, prompting multiple rounds of verbal warnings from accounting ministry officials against “excessive speculation” and even interventions by authorities.