Japan’s economy expands 0.7% in fourth quarter, beating expectations

GDP grew 0.7% quarter on quarter, more than the 0.3% rise expected by economists polled by Reuters. It had expanded by a revised 0.4% in the previous quarter.

On an annualized basis, GDP grew 2.8%, exceeding the Reuters estimate of 1%.

The GDP data on Monday comes against the backdrop of Japan’s central bank raising rates to 0.5%, their highest level since October 2008, and offers it more room to stick with monetary tightening.

Japan’s household spending in December also supported the case for monetary tightening, rising 2.7% year on year in real terms, massively beating expectations from economists polled by Reuters and marking its first rise since July 2024.

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