"What's driving growth is rush demand before the tax hike and capex gains"
- Hiroshi Shiraishi, senior economist at BNP Paribas Securities
Japan's economic growth is projected to accelerate at the end of last year as consumers increased spending ahead of a planned sales tax hike, while analysts believe officials may have to consider to inject fresh stimulus to brighten the economic outlook. Anemic exports and wages growth have slashed some of the economic gains of the year 2013, while recent turmoil in emerging markets have also added to concerns that Japanese shipments may fail to gather pace.
Economists assume that Japan's economy grew 0.7% in the October-December period from 0.3% seen in the previous quarter, marking the fifth straight quarter of growth. The Cabinet Office will release official data on Monday.
Bank of Japan Governor Haruhiko Kuroda said that he will not hesitate to adjust the quantitative easing programme if upside or downside risks to the nation's economy and prices appear. Meanwhile, the International Monetary Fund believes that Japan's central bank has no need to ease monetary policy further as inflation is approaching the 2% target. However, the BoJ should take necessary steps in case inflation increase stalls.
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