• Japan economy contracts 0.3% in Q4 – revised data

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    TOKYO: Japan’s economy contracted less than initially thought in the last quarter of 2015, revised data showed on Tuesday, as corporate spending picked up, although the outlook for this year remained bleak.

    The Cabinet Office said gross domestic product shrank 0.3 percent in October-December period, not quite as bad as an original estimate of a 0.4-percent contraction.

    The new figures mean that the world’s number three economy expanded 0.5 percent through 2015, against an earlier 0.4 percent estimate.

    But the modest changes offer little in the way of hope for Prime Minister Shinzo Abe’s faltering bid to put Japan on a firm recovery path.

    The weak data also boost the chances of more easing measures from the Bank of Japan to prop up the economy. The central bank holds a policy meeting next week.

    “With the early indications for [the first quarter]not looking promising, we retain our view that the Bank of Japan will announce more easing next week,” said Marcel Thieliant from research house Capital Economics.

    The latest GDP figures point to an uptick in business spending and exports, but spending by shoppers at home remains weak with firms reluctant to boost salaries.

    The lack of spending is a big hurdle for Tokyo’s growth bid and the central bank’s efforts to stoke lasting inflation.

    “Wage growth is still feeble, while food prices are going up, so households are cautious,” said Junichi Makino, chief economist at SMBC Nikko Securities.

    “We cannot take a positive view [on the revised data]. . . There is no change to our outlook that the economy is stagnant.”

    AFP

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