MNI BRIEF: Q3 Output Gap Hits 18th Negative Result - BOJ
MNI (TOKYO) - The Bank of Japan estimated the country's output gap at -0.53% in Q3, its 18th consecutive negative result following -0.58% in Q2, indicating upward pressure on prices continued with a time lag, data released by the BOJ showed on Wednesday.
The BOJ's estimate of the output gap, based on capital and labour stocks, is smaller than the Cabinet Office's last estimate of -0.4% in Q3 (vs. -0.6% in Q2), which is based on revised second preliminary Q3 GDP data showing a 0.3% q/q rise, or an annualised rate of 1.2%.
The BOJ’s Outlook Report in October said that the output gap, which captures the utilisation of labour and capital, has followed an improving trend, albeit with fluctuations. The output gap is likely to widen moderately to within positive territory toward the end of the projection period.
The BOJ also said that Japan's potential growth rate for the April-September period 2024 was estimated at 0.58%, up from 0.53% for the October 2023-March 2024 period.
The Cabinet Office estimates Japan's potential growth rate to be about +0.5% in the July-September period, up from 0.4% for the April-June quarter.