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MNI BRIEF: BOJ: Output Gap Narrows To -1.21 PPS In Q1

(MNI) Tokyo
TOKYO (MNI)

Japan's output gap is seen at -1.21 percentage points in the January-March period, narrowing from -1.47 pp in Q4, for the eighth consecutive quarterly negative gap, the Bank of Japan estimated on Tuesday.

The narrowing negative output gap indicated that upward pressure on consumer prices and inflation expectations will strengthen, albeit with a lag of a few quarters. The BOJ"s estimate of the output gap, based on capital and labour stocks, is similar than the Cabinet Office's last estimate of -3.7 pp in Q1, which uses second preliminary Q1 GDP data showing a -0.1% fall q/q, or an annualized rate of -0.5%.

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Japan's output gap is seen at -1.21 percentage points in the January-March period, narrowing from -1.47 pp in Q4, for the eighth consecutive quarterly negative gap, the Bank of Japan estimated on Tuesday.

The narrowing negative output gap indicated that upward pressure on consumer prices and inflation expectations will strengthen, albeit with a lag of a few quarters. The BOJ"s estimate of the output gap, based on capital and labour stocks, is similar than the Cabinet Office's last estimate of -3.7 pp in Q1, which uses second preliminary Q1 GDP data showing a -0.1% fall q/q, or an annualized rate of -0.5%.

Keep reading...Show less