Japan’s GDP grew at an annualised rate of one per cent in the final quarter of 2016, falling slightly short of analysts’ expectations.
Growth between the third and fourth quarters fell to 0.2 per cent, the slowest pace in the year and down from the 0.6 per cent growth rate achieved in the first three months of 2016.
Investment in Japanese businesses and a boost from government spending are said to have added 0.6 percentage points and 0.3 percentage points to the overall figure respectively.
A Reuters poll of economists had anticipated growth of 1.1 per cent for the fourth quarter, but data suggested consumption had remained stagnant, with the country heavily reliant on foreign earnings.
Despite the slightly lower-than-expected results, analysts have suggested that today’s preliminary data from the Japanese government shows that Shinzo Abe’s economic reform programme, known as “Abenomics”, is helping to boost demand. Japan’s economy grew by 1.2 per cent in 2015.
Japan’s current account surplus reached a nine year high last year, up by 25 per cent the year before, indicating strong performance from the overseas operations of Japanese companies.
The yen has fallen in value against the dollar since Donald Trump’s election victory in November last year, leading Trump to accuse Shinzo Abe and his officials of deliberately manipulating the yen to weaken it against the dollar, a claim the Japanese government strongly denies.
Abe presented Donald Trump with a package of measures to help US-Japanese trade during his visit to the White House last week. Their meeting has been widely interpreted as a warming in relations and a return to more traditional US diplomacy, with none of the rhetoric of Trump’s campaign surfacing during the two-day visit.
The yen initially tracked down against the dollar on Monday, trading at ¥114.1.