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MNI BRIEF:BOJ Q1 Output Gap Hits 16th Negative Reading In Row

(MNI) TOKYO

Japan's output gap was estimated at -0.66% in Q1, the 16th straight negative reading following -0.03% in Q4 of 2023, indicating upward pressure on prices is slowing with a time lag, BOJ data showed on Wednesday.

The BOJ's estimate of the output gap, based on capital and labour stock, is smaller than the Cabinet Office's latest estimate of -1.1% in Q1 (vs. -0.4% in Q4), which is based on revised Q1 GDP data which showed a 0.7% fall q/q, or an annualized rate of -2.9%.

The central bank said Japan's potential growth rate for the October 2023 to March 2024 period was forecasted at 0.64%, up from 0.59% for the April-September 2023 period.

The Cabinet Office estimates Japan's potential growth rate to be about 0.6% for the January-March period, unchanged from the Q4 2023.

MNI Tokyo Bureau | +81 90-2175-0040 | hiroshi.inoue@marketnews.com
MNI Tokyo Bureau | +81 90-2175-0040 | hiroshi.inoue@marketnews.com

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