Japan economy likely returned to growth in Q4, but remains fragile

Japan's economy likely swung back to growth in the October-December period, helped by a slight pickup in external demand, though analysts warned private consumption remains fragile, a Reuters poll showed on Friday. The expected return to expansion, albeit modest, would come at a time when the Bank of Japan is debating the likelihood of a near-term exit from its massive stimulus programme, and is closely monitoring upcoming wage talks and consumer spending. "The recovery is not strong enough to regain from the 0.7% decline (annualised -2.9%) in July-September," said Shinichiro Kobayashi, principal economist at Mitsubishi UFJ Research and Consulting.

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