Commuters walk at Shibuya Crossing, Tokyo
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Japan averted a technical recession as revised official data on Monday showed the economy returned to growth in the October-December period last year.
Japan's gross domestic product rose 0.4% year over year in the fourth quarter. Preliminary data for last month showed GDP contracted by 0.4%. This came after a revised 3.3% decline in the July-September period.
The Japanese economy also grew by 0.1% in the fourth quarter compared to the previous three months, compared with preliminary data that showed a decline of 0.1%. The economy shrank 0.8% in the third quarter compared to the previous three months.
A second straight quarter of GDP decline may have muddled the case for interest rate normalization for Bank of Japan Governor Kazuo Ueda.
Hopes of an upward revision were boosted after Treasury data released last Monday showed capital spending rose 16.4% in the fourth quarter from a year earlier and 10.4% on a seasonally adjusted quarterly basis.
However, high inflation has curbed domestic demand and private consumption, underlining the fragility of growth in the country. Reuters reported, citing three people familiar with the matter, that the Bank of Japan was likely to downgrade its assessment of consumption and factory output at its next monetary policy committee meeting on March 18 and 19.
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