\u00a0<\/p>\n
The growth follows a contraction of 0.7% \u2013 revised downwards from an earlier reading of minus 0.6% \u2013 in the previous quarter.<\/p>\n
Growth in private consumption and private residential and corporate investments contributed to the expansion, according to the cabinet office data.<\/p>\n
In calendar 2025, Japan\u2019s economy grew 1.1%, after a 0.2% contraction in 2024, the data from the cabinet office showed.<\/p>\n
On an annualized basis, GDP expanded by 0.2% in the three months through December, significantly weaker than the median economist estimate of 1.6% growth<\/p>\n
Takaichi became Japan\u2019s first woman prime minister in October and called snap elections for February 8.\u00a0The vote saw her Liberal Democratic Party (LDP) win a historic two-thirds majority in the lower house<\/a>.<\/p>\n \u00a0<\/p>\n Meeting with BOJ chief<\/p>\n On Monday, she had her first meeting with Bank of Japan governor, Kazuo Ueda, since the election and may have discussed the central bank\u2019s rate-hike plans.<\/p>\n There has been speculation that the central bank could raise interest rates as soon as March or April, because of the rising cost of living, stemming partly from the weak yen.<\/p>\n Ueda said later that he and the PM had a \u201cgeneral exchange of views on economic and financial developments\u201d and that the prime minister did not make any specific monetary policy requests.<\/p>\n Asked if he was able to gain consent from the premier on the BOJ\u2019s rate-hike stance, Ueda said: \u201cThere\u2019s nothing in particular I can reveal on details of what was discussed.\u201d<\/p>\n In November, Takaichi\u2019s government pushed through a 21.3-trillion-yen ($139-billion) stimulus package aimed at boosting growth. It involved energy subsidies, cash handouts and investment incentives in key fields such as semiconductors and artificial intelligence.<\/p>\n It also included funds for expanded spending on defence, as China increases military activities in the wider region.<\/p>\n Takaichi\u2019s big election win has heightened speculation that the PM might renew her calls for the BOJ to keep interest rates low.<\/p>\n \u00a0<\/p>\n Yen\u2019s rebound<\/p>\n Some analysts have said the yen\u2019s recent rebound may change the government\u2019s view on the desirable pace of future rate hikes. After sliding close to the key 160 mark in January, the yen gained nearly 3% last week, which was its largest rise since late 2024. On Monday, the dollar was at 152.66 yen.<\/p>\n Investors, meanwhile, have been worried about Takaichi\u2019s spending plans. That\u2019s because\u00a0Japan\u2019s debts are more than twice the size of the country\u2019s economy \u2013 the highest ratio among advanced economies.<\/p>\n Last month, yields on long-term Japanese bonds hit record highs after Takaichi pledged temporarily to exempt food from a consumption tax to ease the pain of inflation on households.<\/p>\n \u201cThe minuscule rebound in activity last quarter may embolden PM Takaichi to press ahead with even more fiscal loosening,\u201d Marcel Thieliant at Capital Economics said on Monday.<\/p>\n The weak growth \u201cimplies that the large supplementary budget passed at the end of November provided no boost to public spending last quarter just yet,\u201d Thieliant said in a note.<\/p>\n \u201cIn fact, sluggish economic activity increases the chances that Takaichi will not only press ahead with suspending the sales tax on food but enact a supplementary budget during the first half of the fiscal year that starts in April already, rather than wait until the end of this year,\u201d he added.<\/p>\n But the country\u2019s weak growth is not expected to deter the Bank of Japan from hiking interest rates later this year, economists say.<\/p>\n \u00a0<\/p>\n AFP with additional input and editing by Jim Pollard<\/p>\n \u00a0<\/p>\n ALSO SEE: \u00a0<\/p>\n \t\t\t\t
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