TOKYO, April 5 (Reuters) - Japan's economic output ran
below full capacity for the 11th straight quarter in
October-December, central bank data showed on Wednesday,
suggesting that conditions for ending ultra-low interest rates
have yet to fall into place.
Japan's output gap, which measures the difference between an
economy's actual and potential output, stood at -0.43% in the
fourth quarter, widening from -0.08% in July-September, Bank of
Japan (BOJ) data showed.
A negative output gap occurs when actual output is less than
the economy's full capacity, and is considered a sign of weak
demand that typically puts downward pressure on inflation.
The output gap data is among factors the BOJ scrutinises in
gauging whether economic growth and domestic demand are strong
enough for Japan to sustainably hit its 2% inflation target.
Markets are rife with speculation the BOJ will phase out its
ultra-loose monetary policy when new Governor Kazuo Ueda
succeeds dovish incumbent Haruhiko Kuroda this month.
Japan's economy expanded by an annualised 0.1% in the
October-December period, only narrowly averting a recession as
capital expenditure and consumption remained weak.
While an end to COVID-19 curbs is underpinning consumption,
growing signs of slowdown in overseas demand are clouding the
outlook for Japan's export-reliant economy.
(Reporting by Leika Kihara; Editing by Jacqueline Wong)
Messaging: leika.kihara.reuters.com@reuters.net))
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