The Cabinet Office announced Feb. 14 that Japan's gross domestic product for the October-December period decreased 0.1 percent (0.4 percent annualized) in real terms from the previous quarter — for the third straight quarterly fall.
Although the pace of decline slowed from the July-September period — when GDP dropped 1.0 percent from the previous quarter — nominal GDP in the October-December period fell 0.4 percent (1.8 percent annualized) from the previous quarter, indicating that the long-running grip of deflation remains strong. Movement of nominal GDP is said to better reflect people's feel about economic conditions than real GDP.
Apparently thanks to the aggressive economic policy of the Abe administration, the yen has weakened and stock prices have gone up. This shows that expectations for the Japanese economy are increasing. The important thing is to ensure that the nation's real economy grows in a sustainable manner. The government and the Bank of Japan should take timely fiscal, monetary and growth measures as needed.