Japan’s economy grew faster than expected in the third quarter, with its gross domestic product expanding at an annualized rate of 1.2% from the previous quarter. The data exceeded a preliminary estimate of 0.9%, largely due to improved net exports, capital expenditures, and inventory levels.
The stronger-than-expected growth supports the Bank of Japan’s view that the economy will continue to expand moderately. BOJ Governor Kazuo Ueda is expected to closely examine economic data before making his decision on policy rates in December.
Economists are divided on whether the growth indicates sustainable expansion or if it was partly driven by one-off tax cuts. Some, such as Yuichi Kodama of Meiji Yasuda Research Institute, believe there’s a 50% chance of another interest rate hike in December, while others argue that the recent yen appreciation suggests waiting until January might be more prudent.
Taro Kimura of Bloomberg Economics notes that the GDP report reinforces the idea that the economy is becoming “sturdy enough to withstand a further reduction in stimulus.” However, inflation remains above the central bank’s target for over 30 months, leaving some economists skeptical about the sustainability of current growth trends.
Source: https://finance.yahoo.com/news/japan-growth-gets-revised-boj-000718887.html