Japan economy expands annualised 2.1% in Q1, above forecasts
Japan's economy grew at an annualised 2.1% in the first quarter, exceeding the 1.5% market consensus. Domestic consumption and capital expenditure both contributed to the expansion. The release adds a new layer to the debate around the Bank of Japan's policy stance.
Japan's economy grew at an annualised 2.1% in the first quarter, beating the 1.5% market consensus. According to Investing.com, the quarter-on-quarter print came in at 0.5%, marking a clean rebound from the previous quarter's 0.2% contraction. Household consumption and capital expenditure were the strongest drivers.
In the breakdown, private consumption rose 0.6% on the quarter and capex climbed 1.4%. Net exports added just 0.1 percentage point to growth, with a relatively weak yen and the Iran war's impact on shipping costs both weighing. Government energy support measures helped soften domestic prices.
The release added a new dimension to the Bank of Japan policy debate. Some analysts argue the BoJ will keep its bond tapering schedule on track; others say pressure from Prime Minister Takaichi's economic advisers could slow it. The yen showed a limited reaction against the dollar after the release.
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