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The
Cabinet Office said Tuesday that Japan’s real gross domestic
product, which measures the sum value of a nation’s goods and
services, also was lower due to higher private inventories than
earlier reported.
It was the third straight quarter of expansion, and the
government maintains that the economy is moderately recovering.
On a quarter-to-quarter basis, seasonally adjusted real GDP grew
0.6%, revised from 0.7%. Private demand shrank 0.3%, worse than
the 0.1% given earlier. Exports grew 1.0%, instead of the
earlier 1.1%.
Unlike the U.S. and some other nations, Japan has been dogged by
deflation, and these lower prices stifle growth. But recent wage
growth has kept deflationary trends in check.
The slower growth than expected complicates policymaking for the
Bank of Japan, which has been expected to raise interest rates.
Annual negotiations between labor and management are resulting
in bigger wage increases and the central bank has said it will
raise its benchmark rate if the economy holds up and prices
continue to rise at the projected steady rate of 2%.
The government kept unchanged its finding that the Japanese
economy grew at a meager 0.1% annual rate, the fourth straight
year of expansion.
The outlook for Japan is clouded by uncertainties about the
future course for the U.S. economy and policies of U.S.
President Donald Trump, especially tariffs. Japanese companies
rely heavily on foreign trade, and tariffs on Japanese exports
as well as those of China and other neighboring Asian nations,
as well as Mexico and Canada, would reverberate across the
globe.
Trade minister Yoji Muto was visiting Washington on Monday in an
effort to avert higher tariffs on Japanese exports of steel and
aluminum, among other products.
Muto was relaying concerns to U.S. officials that higher tariffs
will hurt both Japanese and American businesses, investments and
jobs, according to the ministry.
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