Japan’s economy expanded at a slower pace than reported in Q4 (October-December). The degradation was mainly caused by weaker consumption. GDP (Gross Domestic Product) expanded by 2.2% in the fourth quarter; however, economists forecasted 2.8% growth.
At the same time, government officials and analysts shared their concerns about U.S. President Donald Trump’s tariff policies impacting the growth rate. Japan’s companies also show concerns about the impact of Trump’s policy.
The revised GDP numbers translate into a quarter-to-quarter growth of 0.6%, which is lower than the 0.7% growth issued last month.
Reuters reported that the Bank of Japan will likely keep the policy rates unchanged in the upcoming policy meeting that takes place on March 18-19. In January 2025, the BOJ raised short-term interest to their highest in the last 17 years.
Kazutaka Maeda, an economist from Meiji Yasuda Research Institute, stated, “If you look at GDP on its own, I don’t think it will prevent the Bank of Japan from raising interest rates.”
