Japan's economy unexpectedly slips into recession, hurt by weak domestic demand

Provisional GDP contracted 0.4% in the fourth quarter compared with a year ago, after contracting 2.9% in the July-September period. This was below the median estimate for 1.4% growth.

Japan GDP also contracted 0.1% in the fourth quarter from the previous quarter, after shrinking 0.4% in the third quarter from the second. This was weaker than expectations for 0.3% expansion.

Japan’s economy unexpectedly contracted again in the October-December period, as high inflation crimped domestic demand and private consumption.

A second-straight quarter-on-quarter GDP decline also means Japan has dipped into a technical recession, complicating the case for interest rate normalization for Bank of Japan Governor and fiscal policy support for Japanese Prime Minister.

Provisional gross domestic product contracted 0.4% in the fourth quarter compared with a year ago, after contracting 2.9% in the July-September period. This was below the median estimate for 1.4% growth. The GDP deflator in the fourth quarter stood at 3.8% on an annualized basis.

The Japanese economy also contracted 0.1% in the fourth quarter from the previous quarter, after shrinking 0.4% in the third quarter from the second. This was weaker than expectations for 0.3% expansion.

Private consumption declined 0.2% in the fourth quarter from the previous quarter, in contrast to the median estimate for a 0.1% expansion.

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