Japan Escapes Recession with 0.2% Economic Growth in Fourth Quarter

Japan has technically ended its latest recession with the government's revised gross domestic product data showing an expansion by 0.2 percent in the fourth quarter on an annualised basis.

Quarter-over-quarter, Japan's economic growth was flat in the October to December quarter, following an upward revision from the preliminary estimate of 0.1 percent contraction. In the third quarter, the economy contracted by 0.1 percent.

Japan's export-oriented economy had witnessed negative economic growth for the second and third quarters of 2012 due to weak demand from its key European market, which is suffering from a financial crisis. The recession was also caused by a strong yen and a political row with China, which resulted in a boycott of Japanese products by them.

The country's new administration has been using various measures to revive the economy. The government led by Prime Minister Shinzo Abe had promised more fiscal spending and big monetary stimulus to save the economy and end growth-denting deflation.

Abe's measures have weakened the yen to 3.5-year lows against the dollar, helping its exports. However, the weaker currency made its imports costly, putting pressure on the balance of payments.

Separate data from the finance ministry showed that Japan's current account total for the month of January came in at a deficit of 364.8bn yen ($3.9bn, £2.6bn), wider than 264.1bn yen deficit in December. Economists expected a deficit of 611.5bn yen for the month.

On 7 March, the Bank of Japan held its monetary policy steady saying that the economy had stopped worsening. The decision backs economists' view that Japan will experience moderate growth in 2013 on the back of a global recovery and Abe's policies.

Other economic data released recently showed unemployment rate edging down to 4.2 percent and industrial output rising 0.1 percent in January, though the economy was stuck in deflation.