Japan GDP tops forecasts in Q4

Bloomberg

Japan’s economy expanded more than first estimated in the fourth quarter, driven partly by stronger business investment. Yet more recent gauges of factory output and exports point to a gloomier outlook for this year.
Gross domestic product grew at an annualised pace of 1.9% in the three months through December. That compared with an initial reading of 1.4% and a 1.7% estimate by economists. The rebound was still smaller in scale than the previous quarter’s disaster-hit 2.4% contraction.
Japan’s economy needed all the momentum it could get heading into 2019 given that early data for current quarter suggest growth will be hit hard by the slowdown in China, the US-China trade war and a softening tech cycle. An upward revision in GDP growth had been expected by economists given stronger-than-expected capital expenditure figures for quarter released last week.

The recent pattern of expansion and contraction in the economy is not the stable growth path Prime Minister Shinzo Abe would like to see in the run-up to a demand-sapping sales-tax hike later this year.
An upward revision in GDP growth had been expected by economists given stronger-than-expected capital expenditure figures for the quarter released last week. But those figures also showed very little quarterly growth in business spending outside the manufacturing sector.
Inventories also dragged much less on growth. The figures didn’t prompt a rethink among economists who are increasingly concerned about the current quarter and the possibility of the economy contracting or even worse, slipping into a recession ahead.
Part of the upward revision was due to a change in estimated inventories, while private consumption rose less than first estimated. “Taken together— and in the context of weakening global growth and the lingering threat of US protectionism to Japan’s auto industry — it’s hard to be too upbeat on these data,” say Bloomberg economists.