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REPEAT: MNI: BOJ: Japan Q4 Output Gap +1.50 Point; 1.14% in Q3

     TOKYO (MNI) - The Bank of Japan said Wednesday it estimates that the
positive output gap resulting from tighter supply and firmer demand widened to
1.50 percentage points in the October-December quarter of 2017 from 1.14% points
in July-September.
     It was the fifth straight quarter of the gap being in positive territory
and much wider than 1.05% points in April-June 2017, 0.67% points in
January-March and 0.26% points in October-December 2016.
     The improvement in the output gap is expected to increase upward pressure
on consumer prices and inflation expectations with a lag of a few quarters.
     The BOJ's estimate of the output gap, which is based on capital and labor
stocks, was wider than the Cabinet Office's latest estimate at 0.7 percentage
points, a figure based on revised Q4 GDP growth of 0.4% on quarter, or an
annualized +1.6%.
     The BOJ also said Wednesday that Japan's potential growth rate for the
October-December 2017 was estimated to be 0.88%, up slightly from 0.84% for the
April-September period. It was within the bank's latest estimate in a range of
0.5% to 1.0% released in the January Outlook Report.
     The Cabinet Office estimates Japan's potential growth rate to be about 1.1%
in the October-December quarter, unchanged from the previous three months.
--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com

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