Japan's economy still anaemic though Q4 contraction less than first estimated

Japan’s economy contracted less than initially estimated in the final quarter of last year.

It shrank at an annualised rate of 1.1 percent between October and December. The preliminary estimate had been 1.4 percent.

However private consumption remained weak, underlining the challenges facing the government in restoring growth.

This keeps the Bank of Japan under pressure to further expand monetary stimulus and has increased speculation that the government may delay an increase in sales tax from eight to 10 percent scheduled for April next year.

While many analysts expect growth to have rebounded modestly in the current quarter, the bleak outlook for global demand has led some to predict another contraction that will push Japan back into technical recession – defined as two straight quarters of shrinking growth.

Economist are split on whether growth could rebound modestly in the current quarter.

The bleak outlook for global demand has led some to predict another contraction that will push Japan back into technical recession – defined as two straight quarters of shrinking growth.

Separate data showed consumer confidence fell for a second straight month in February to hit a one-year low