4:30 PM Tokyo – December quarter economic growth in Japan was 0.3% from the previous quarter and the economy expanded at annual pace of 1%. The yen gained. The sharply lower growth was worrisome to economists as the nation faces higher sales tax from April 1.
Investors lifted market indexes and the latest economic growth data was sharply lower than estimated by private economists.
The Japanese economy grew at slower than expected annual growth rate of 1% as the weak yen lifted energy import costs.
The Japan’s Cabinet Office today reported gross domestic product in the fourth quarter rose to 0.3% from the last quarter and on an annualized basis, GDP expanded to 1%.
Capital spending rose in last two years. Business investment jumped 1.3% from a quarter earlier.
The weak economic growth stoked fears that the impending sales tax increase in April may knock off growth spurts in the economy as families struggle with rising food and energy costs and wage increases have lagged the broader prices increase in the economy.
Japanese exporters have benefited from the weaker yen in the last two years following the Prime Minister Abe’s policies but corporations have not offered higher bonuses or revised wages higher.
The Nikkei 225 Stock Average increased 80.08 or 0.6% to 14,393.11 and the Topix index rose 8.23 to 1,192.
The yen strengthened to 101.76 against the U.S. dollar.
Stocks in Review
Toyota Motor Corp
fell 20 yen to 5,793 yen. Honda Motor Co
gained 34 yen to 3,747 yen. Nissan Motor Co Ltd
rose 15 yen to 919 yen.
added 15 yen to 1,718 yen.
increased 20 yen to 7,514 yen. Fast Retailing Co
jumped 150 yen to 34,750 yen.
plunged 9.5% to 1,499 yen after the e-commerce retailer agreed to acquire Cyprus-based Viber Media, the internet phone application provider for $900 million.
The company will merge its wholly-owned consolidated subsidiary Rakuten Travel, Inc. from April 1.
The company reported sales in the fiscal year ending in December climbed 30% to 518.6 billion yen from 400.4 billion yen a year ago.
Net income in the year doubled to 43.5 billion yen compared to 21.1 billion yen and diluted earnings per share increased to 32.41 yen from 15.56 yen a year earlier.
Suntory Beverage & Food Limited
jumped 2.7% to 3,470 yen after the Japan-based beverages and food maker reported net sales in the year ending in December soared 10.2% to 2.04 trillion yen from 1.85 trillion yen a year earlier.
Net income in the year surged 17% to 120.5 billion yen compared to 103.1 billion yen and basic earnings per share jumped to 286.67 yen from 53.74 yen a year ago.