Japan GDP Expands 0.1% On Quarter In Q4

Japan government to submit BOJ nominees to parliament Friday - sources

Japan's economy expanded moderately for the three months ended December, the eighth straight quarter of growth, thanks to steady improvements in private consumption and capital expenditures, according to preliminary data released Wednesday by the Cabinet Office.

"The growth rate for the last quarter was very low compared with the bubble period but the economy is solid enough", said Takeshi Minami, chief economist at Norinchukin Research Institute. The economy grew 1.6% in 2017-the fastest pace in seven years-an indication that Prime Minister Shinzo Abe is succeeding in generating more stable, albeit modest, growth.

The economy expanded at a 0.5 per cent annualised rate in October-December, less than the median estimate for annualised growth of 0.9 per cent, Cabinet Office data showed today.

"It's hard for the Japanese economy to be self-sustaining when incomes are struggling to rise", said Mr Yasutoshi Nagai, chief economist at Daiwa Securities in Tokyo.

Nominal GDP remained nearly unchanged from the previous quarter, but decreased 0.1% on annualized rate, the first negative growth since the July-September quarter of 2016.

At an annualised rate, the world's third largest economy grew 0.5%.

The GDP data comes after news that Abe's government has chose to nominate Haruhiko Kuroda for a rare second term as Bank of Japan governor, a sign his ultra-loose monetary policy will remain in place, although investors still have questions about who the deputy governors will be and what policies they are likely to favor.

That marked the longest streak of growth since a 12-quarter stretch between April to June 1986 and January to March 1989 around the height of Japan's economic bubble.

"There are lingering worries over consumption but we can expect the economy to pick up further if "shunto" wage hikes are better than the previous years," said Minami, referring to collective wage negotiations between labour and management held every spring. Consumer spending climbed 0.5 percent, marking the first increase in 2 quarters.

On an annualized basis, GDP gained 0.4% - again missing expectations for 1.0% and down from the downwardly revised 2.2% increase in the three months prior (originally 2.5%).

Overseas demand subtracted fractionally from GDP in October-December.

"I'm a little anxious about sluggish wage growth", said Daiju Aoki, regional chief investment officer at UBS Securities. Corporate capital spending, another key pillar of domestic demand, increased 0.2 percent.

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