Japan's economy on the rise for 8th straight quarter

Japan's economy on the rise for 8th straight quarter

Japan's economy on the rise for 8th straight quarter

Japan's Cabinet Office says the country's Gross Domestic Product from October to December 2017 grew 0.1 percent compared to the previous quarter based on preliminary data.

Japan's economy has now posted the longest continuous expansion since a 12-quarter stretch of growth between April-June 1986 and January-March 1989 around the height of Japan's notorious economic bubble.

The somewhat satirical tweet from AFP's Japan news editor, Richard Carter, followed the release of data Wednesday confirming the world's third-largest economy is now on its longest growth spurt since the heady days of the 1980s bubble economy.

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%).

A Cabinet Office official said increased spending on mobile phones, cars, and dining out drove gains in private consumption, which accounts for about two-thirds of GDP.

"The overall impression of the October-December performance was a weak one", Mizuho Securities senior market economist Toru Suehiro told the Nikkei.

More news: Aishwarya Rai Bachchan's stunning first look from Fanne Khan

The long run of growth is an encouraging sign for the Bank of Japan, hinting that the economy may at last be building up momentum to lift consumer prices toward its 2 percent inflation target. Public investments also contracted for the second consecutive quarter as the positive impact of projects carried over from the supplementary national budget for fiscal 2016 diminished toward the end of 2017.

Junko Nishioka, chief economist at Sumitomo Mitsui Banking Corp., also said an uptick in income suggested the Japanese economy would expand further. "Over the last two decades, GDP has never risen by more than 1 percent over the coming year when capacity shortages were as pronounced as they are now", he said.

However, with wage growth and consumption persistently lukewarm, the economy is still battling to make a clear break from deflation.

The latest growth was led by domestic demand.

Nonetheless, the lack of any inflation effect in the data and a decline in real wages for the quarter highlight the challenges still facing the BOJ's efforts to foster a virtuous cycle of growth, consumer spending and business investment - a key element of the "Abenomics" policy. That would give Kuroda more time to work toward a still distant inflation target of 2 percent at a time when worries over US inflation are rising, rattling financial markets.

Latest News