Japan's economy contracts less than expected, but US tariffs loom large over BOJ policy
Japan 's economy contracted in the first quarter of the year by less than initially estimated on better inventory and consumption figures, while still backing caution by the Bank of Japan (BOJ) as it weighs its policy path amid heightened uncertainty.
Advertisement
Gross domestic product shrank at an annualised pace of 0.2 per cent in the three months through March, the Cabinet Office said on Monday, compared with a 0.7 per cent retreat in preliminary data. Economists had expected that initial figure to stand.
Personal consumption rose 0.1 per cent, while business spending gained 1.1 per cent. Inventories contributed 0.6 percentage points to growth, while net exports posted a drag of 0.8 percentage points.
The revised figures confirmed that the world's fourth-largest economy contracted even before
US President
Donald Trump added to the headwinds facing the economy by expanding his tariff measures in April. For the BOJ, the data are still likely to support a wait-and-see approach for now, particularly after it slashed its growth forecast for this year at the last policy meeting.
People cross a street in Tokyo's Shinjuku business and shopping district. Japan's economy recorded its first economic contraction in four quarters. Photo: EPA-EFE
BOJ officials were very cautious about the impact of tariffs, which Governor Kazuo Ueda described as having 'extremely high' uncertainties. He warned last week that tariffs could affect Japan's economy through multiple channels, pledging to evaluate economic and price developments through a broad array of indicators.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
South China Morning Post
an hour ago
- South China Morning Post
TikTok secures new UK office, to add 500 jobs, as US fate remains uncertain
TikTok , the short video app owned by Beijing-based ByteDance , is expanding in the United Kingdom, adding a new office and more than 500 jobs, while its fate in the US remains uncertain as a June 19 sell-or-ban deadline approaches. The new 135,000 sq ft office in Barbican, London, is set to open early next year, according to a statement published on TikTok's website on Monday. The additional jobs will grow its UK workforce to 3,000 this year, the company said. In addition to its existing 88,500 sq ft Farringdon head office, TikTok's total UK property investments would amount to around £140 million (US$190 million). The company also claimed its service had contributed £1.6 billion to the UK economy, with some 1.5 million businesses operating on TikTok, supporting 32,000 jobs. TikTok said it 'carefully evaluates where it chooses to invest and expand its operations' and has a 'deep commitment to the UK'. The move comes as its average monthly active users in the country surpassed 30 million in the first quarter, making it TikTok's largest market in Europe. TikTok has been expanding overseas amid turmoil in its largest market, the US, where it has 170 million users. The administration of US President Donald Trump has since January delayed enforcing a law that requires ByteDance to divest the app or face a ban from US app stores and cloud providers. After previously extending the enforcement deadline in April, Trump said last month during an NBC interview that he would be willing to extend it again this month.
South China Morning Post
an hour ago
- South China Morning Post
Pop Mart's Labubu becomes bait for China's Ping An Bank to lure young customers
Hoping the world's trendiest monster will scare up some new customers, China's Ping An Bank is rewarding those who open new accounts with a Pop Mart Lababu doll amid fierce competition for young customers among Chinese retail banks. New clients who open a savings account and deposit more than 50,000 yuan (US$6,954) for at least three months could receive a blind box from the first or second series of the Chinese toy retailer's popular collectibles, according to media reports. Customers who also apply for a credit card could receive a blind box from the third series. With its pointy ears, sharp teeth and mischievous grin, Labubu has attained viral popularity among young consumers worldwide and driven a heady rise in Pop Mart's revenue and share price . The plush figures – often sold in opaque boxes so that buyers cannot know exactly which one they are getting – typically retail for around 99 yuan on the mainland, but they sell for considerably more in other regions, such as the US and Middle East . Prices can soar on the secondary market due to high demand and limited supply. Ping An Bank's campaign with the sought-after figure quickly drew attention and went viral on RedNote, an Instagram-style platform popular for lifestyle tips. In a post on Monday that garnered more than 1,100 likes overnight, a Sichuan province-based user called Ouqixilanhua claimed to have rushed to a local branch after learning of the giveaway. 'I opened a [bank] account and made a deposit right away,' the user said. 'Money has to be saved somewhere, and I couldn't pass up a free collectible.' Shen Meng, a director at Beijing-based investment bank Chanson & Company, said Chinese retail banks were struggling to attract and retain young customers amid low interest rates, while the number of retail banks 'far exceeded' what the market needed. The total number of retail banking customers was on the decline as the country's population was dropping and ageing, with overall income levels slipping and unemployment running high among young people, Shen added.
South China Morning Post
3 hours ago
- South China Morning Post
Hong Kong leader rejects taxi licence buy-back amid ‘irreversible' ride-hailing trend
Hong Kong's leader has rejected a proposal from the taxi industry for the government to repurchase licences that have depreciated in recent years due to competition from online ride-hailing services, claiming that the licences had always given cabbies exclusive rights. Advertisement Chief Executive John Lee Ka-chiu on Tuesday also said online ride-hailing was an 'irreversible trend', as he pledged to provide a regulatory framework for such platforms as soon as possible while urging taxi drivers to improve their services amid public criticism. Some leaders within the taxi trade had recently called on the government to repurchase licences for HK$5 million (US$637,100) each. They contended that its value had consistently depreciated with the rise of online ride-hailing platforms like Uber. The value of a licence has plummeted from a historic high of HK$7 million to below HK$3 million in recent months, resulting in significant financial losses for owners. 'We must be very cautious when it comes to using public funds,' Lee said when asked if he would consider the suggestion. Advertisement Lee argued that the licenses had given the sector an 'exclusive privilege' to operate the vehicles, such as using the taxi ranks, picking up passengers in designated restricted areas and getting customers from the street. 'These usages of the taxis, which are granted for a long time under the exclusive privileges of the license, have led to a direct profit on these licenses. It has also allowed taxis to gain profits under this form of operation for a long time,' he said.
