Japan averts recession but Q4 GDP rebound much weaker than expected

Private consumption, which accounts for more than half of Japan's GDP, rose 0.5% in the fourth quarter, matching a median market forecast.External demand added 0.3 percentage point to growth, against a 0.4 point contribution projected by analysts.

"We can expect consumption to pick up as service spending stabilises. But it's difficult to project a strong recovery partly due to pressure from rising inflation," he said. Policymakers hope a rebound in domestic consumption, driven by savings accumulated during the pandemic, will last long enough for wages to pick up and cushion the blow on households from rising food and fuel costs.

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