Abenomics Suffers a Blow

Japan’s economic recovery suffered a blow at the end of last year and the current account deficit ballooned to a record in January, raising fears of a stumble in the world’s third-largest economy as activity wilts ahead of a sales tax increase in April.

In the fourth quarter of last year, Japan’s economy grew at an annual rate of just 0.7 percent, revised figures show, slower than the initial estimate of 1.0 percent on weaker business investment and consumption. The slowdown from a revised 0.9 percent pace in the previous three months bolsters expectations that the Bank of Japan may ease monetary policy further in coming months to safeguard a fragile recovery.

In a further negative sign for the export-reliant economy, the current account deficit widened to a record 1.589 trillion yen ($15.38 billion), easily exceeding a median estimate for a 1.4 trillion yen deficit as shipments failed to substantially pick up despite a weaker yen.

Reuters

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.