Asia

Thursday, February 13, 2020 - 22:05

MNI POLICY: BOJ Maeda Sees Big Contraction in Japan 4Q GDP


TOKYO (MNI) - Japan's gross domestic product for the October-December period might have contracted sharply on the back of the slowdown in overseas economies, natural disasters and the post tax hike impact, according to a senior Bank of Japan official.

Speaking on Friday, Eiji Maeda, the executive director in charge of monetary policy at the BOJ told lawmakers, "There is the possibility that Japan's economy had contracted sharply for the fourth quarter.

"But looking ahead, downside risks (to economic activity and prices) will likely weaken and a moderate economic recovery will continue and prices will rise amid solid capital investment and government spending."

Maeda said the BOJ needs to pay attention to the impact of the coronavirus on foreign tourism in Japan and on production as the BOJ continues to support the economy through accommodative policy.

He added that Japanese companies are suffering from labor shortages, but the labor shortage is not restricted to Japan's economy.

The Cabinet Office will release preliminary GDP for the October-December period on Monday. Private economists expected the GDP to have contracted due to weak domestic demand.

The MNI median forecast is -1.0% q/q, or an annualized -3.8%, which is the first contraction in five quarters.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com
--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

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