"[The revised growth figures are] underwhelming at best. The reality is that the Japanese have not been able to lift inflationary expectations at any degree and they will be held victim to declining commodity prices, which will determine where inflation goes long-term."
-Paul Krake, founder of View from the Peak: Macro Strategies
While Japan managed to recover from recession, it grew lass than previously estimated in the final quarter of 2014. Annualized economy growth for the three months through December was downgraded to 1.5% from a preliminary figure of 2.2%, revised the Cabinet Office data showed. Measured on a quarterly basis, the world's third biggest economy expanded at a 0.4% pace, compared with a preliminary reading of a 0.6% gain. The Japanese economy slipped into technical recession in the third quarter of 2014 after contracting 1.9% and following a revised 7.1% decline in the second quarter. Even though GDP appeared to be weaker than expected, a return to growth is a sigh of relief to Japanese policy makers, particularly after the effect of a sales tax hike in April 2015 was more devastating than anticipated, severely impacting demand and crippling investment.
In addition to that, Japan logged a current account surplus for the seventh consecutive month in January. According to the Ministry of Finance Japan's the current account surplus shrank to 61.4 billion yen in January from 187.2 billion yen a month earlier. On a seasonally adjusted basis, current account rose to 1.06 trillion yen, compared with 0.85 trillion yen in the preceding month whose figure was revised down from 0.98 trillion yen.
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