Japan’s Rebound From Recession Was Weaker Than First Estimated

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Japan’s rebound from recession was weaker than first estimated by the government following an unexpected decline in business investment.

Gross domestic product expanded an annualized 1.5 percent in the three months through December from the previous quarter, less than a preliminary 2.2 percent, according to revised data released Monday by the Cabinet Office. The expansion followed two straight quarters of contraction caused by an increase in the sales tax last April.

Bank of Japan Governor Haruhiko Kuroda is counting on a pickup in growth to reduce slack in the economy and increase inflationary pressure. While he says the tumble in oil prices will benefit the country in the longer term, cheaper energy is threatening to trigger a decline in consumer prices in coming months that challenges his 2 percent inflation target.

Private capital expenditure dropped 0.1 percent from the previous quarter, after a preliminary reading of a 0.1 percent gain. Consumer spending rose 0.5 percent. Preliminary data had shown an increase of 0.3 percent.

The yen advanced 0.1 percent to 120.74 per dollar at 8:58 a.m. in Tokyo.

Source : Bloomberg