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Japan Narrowly Averts Recession As GDP Revised Up

Japan has narrowly skirted the technical definition of an economic recession after the country’s fourth quarter 2023 gross domestic product (GDP) figure was revised upwards.

Revised data showed that the economy expanded at an annualized rate of 0.4% in the October through December quarter, up from an initial estimate of a 0.4% contraction.

The upward revision to positive growth in Q4 2023 means that Japan has averted a recession that is typically defined as two consecutive quarters of economic contraction.

However, the upwardly revised GDP figure was still below economists' consensus forecast of 1.1% growth in Q4 2023, according to a poll by the Reuters news agency.

The upward GDP revision comes amid growing expectations that the Bank of Japan could end its negative interest rate policy later in March, especially with inflation moving back towards the central bank's 2% annualized inflation target.

The Japanese central bank has long said that strong wage growth is required before it changes its monetary policy.

The Bank of Japan is scheduled to hold its next interest rate setting meeting on March 19.