New figures show that Japan's economy grew by less than initially estimated in the fourth quarter of 2009, adding to pressure on the Bank of Japan to ease monetary policy further next week.
Reports say the BOJ is leaning towards doing exactly that at its policy meeting on March 16-17. Deputy finance minister Yoshihiko Noda said today that he wanted to attend the BOJ's meeting next week, and that he believed the BOJ has a sense of crisis.
Prime Minister Yukio Hatoyama's cabinet is calling for the BOJ to do more to support the economy as the country's large debt burden limits the government's ability to use fiscal policy to spur growth.
The economy grew 0.9% in Q4 of 2009, slower than the preliminary estimate of 1.1%, as capital spending rose by less than initially reported, data from the Cabinet Office showed.
On an annualised basis, Japan's economy expanded 3.8%, compared with the initial estimate of 4.6%.
The deflator, a statistical device used to adjust data in nominal GDP to reflect overall price levels, stood at minus 2.8%, the biggest negative reading on record, in a sign that deflation shows no signs of abating.
Deflation is damaging to economic growth because companies and consumers could delay spending as they expect goods to become ever cheaper. It can also hit borrowing as real interest rates are higher than nominal rates.
