Gold bars to be exempt from tariffs, White House clarifies
Investing.com -- Japan's economy saw an annualized growth of 3% in February compared to the previous month, as companies hastened to export goods overseas before the implementation of U.S. tariffs, according to an estimate released by the Japan Center for Economic Research. The real gross domestic product (GDP) for February 2025 was 573.3312 trillion yen in seasonally adjusted annualized terms, marking a 3% increase from the prior month.
Both domestic and foreign demand significantly contributed to the positive growth in February. The growth rate for the January-March 2025 period, if it remains at the same level as in January and February, is estimated to be +2.2% on an annualized basis compared to the October-December 2024 period.
The main expenditure items for February include civilian demand, public demand, and external demand. Civilian demand, combined with changes in private inventories, contributed +1.2 percentage points to the real GDP growth rate. Private housing investment was down 0.2% from the previous month, private final consumption expenditure was up 1.5%, and private corporate capital investment was up 2.8%.
Public demand's contribution to the growth rate was +0.0 percentage points. Despite public fixed capital formation being down 0.0% from the previous month, government final consumption expenditure was up 0.2%. The contribution of domestic demand, including domestic private demand and public demand, to the growth rate was +1.3 percentage points.
External demand, calculated as exports minus imports, contributed +1.7 percentage points to real GDP growth. Exports were up 7.5% from the previous month, while imports were down 0.8%.
The average forecast for real GDP growth rate for the January-March quarter of 2025 has been revised downward to 0.08% from the previous survey in March. It is expected to recover to 0.79% in the April-June quarter, but will remain in the 0% range until the January-March quarter of 2027.
Regarding the Bank of Japan's monetary policy, the most common response was that the policy interest rate at the end of June 2025 would be "0.5-0.6%," and at the end of December it would be "0.7-0.8%." For the U.S. policy interest rate, the most common response at the end of June 2025 was "4.0-4.25%," while the most common response at the end of December was "3.75-4.0%."
When asked how much the Trump administration's tougher tariffs would push down Japan's real GDP in fiscal 2025, the most common answer was "0.4% to less than 0.6%." For US real GDP, the most common answer was "0.4% to less than 0.6%."
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