MNI BRIEF: Japan Q4 GDP Posts Second Straight Contraction

Japan's economy contracted 0.1% q/q, or 0.4% annualised, over Q4 2023, the second straight quarterly decline, due to weak private consumption and capital investment, preliminary GDP data released by the Cabinet Office showed Thursday.

The fall follows a revised Q3 GDP decline of 0.8%, or -3.3% annualised. The Q4 growth was weaker than the MNI median forecast of a 0.3% q/q rise, or 1.4% annualised.

Private consumption, which accounts for about 60% of Japan's GDP, fell 0.2% q/q in Q4 for the third straight drop, after a revised 0.3% fall in Q3. Business investment fell 0.1% q/q in Q4 also for the third straight drop following a revised 0.6% fall in Q3. The median forecast was for a 0.2% rise.

Net exports of goods and services made a 0.2 percentage point contribution to total domestic output after pushing Q3 GDP growth down 0.0 pp. Exports rose 2.6% q/q after rising 0.9% q/q in Q3. Imports rose 1.7% after increasing 1.0% the prior quarter.

Private-sector inventories contributed a negative 0.0 pp following -0.5 pp in Q3, while public investment fell 0.7% q/q, contributing -0.0 pp to GDP.

MNI reported this week any shift to BOJ policy in April will hinge on Tokyo CPI results due April 26. (See MNI POLICY: BOJ April Action Will Hinge On CPI Result)