(Bloomberg) — Japan's economy may have avoided a technical recession at the end of 2023 after all, as latest capital investment data suggests an upward revision in gross domestic product is imminent, economists said.
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A surge in corporate spending in the fourth quarter led some economists to revise their estimates for GDP to show positive growth, a reversal from preliminary data that showed the economy grew at an annual rate in the final three months of last year of 0.4%, the second consecutive quarter of declines.
The revised data, due March 11, will incorporate capital spending figures released on Monday, which showed capital spending on non-software goods rose 8% in the three months to December compared with the previous period.
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The result added to bets that the Bank of Japan will end its negative interest rates as early as this month. Overnight swap trading showed a 50% chance of this happening when the Policy Board concludes its next meeting on the 19th, up from 31% at the end of Friday.
“We will see positive value in the revised data,” Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities Inc., wrote in a note on Monday. “Consumer spending remains weak, but an increase in capital investment to compensate for labor shortages is clearly a positive factor for the economic outlook.”
Most economists expect the BOJ to implement Japan's first interest rate hike since 2007 by April.
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