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Japan Tertiary Industry Index (MoM) came in below forecasts in December, with an actual figure of -0.4%.
The Tertiary Industry Activity Index measures the monthly changes in the levels of economic activity in Japan’s tertiary industries. It signals the current level of activity and helps in making future economic growth projections.
Analysts had expected a 0% reading on the Index in December. However, their forecasts were off the mark as the Index returned a reading of -0.4%. This is the fifth consecutive month of contraction for the Index, signifying a worrying trend for the sector.
These results come on the heels of criticism of the government’s economic policies and dismal economic growth in the fourth quarter. The Abe administration was already under fire for its weak stimulus package to promote growth and it is likely that this news will further highlight the gaps in the economy.
Many experts believe that unless Japan takes drastic measures to stimulate the secondary and tertiary industries, the economy will remain stagnant. While a government stimulus package would help the situation, there are also calls for structural reforms and increased investment in research and development in order to promote innovation.
Analysts are now speculating whether these figures will cause the Bank of Japan to adjust its monetary policy. With concerns over the health of the economy growing, the central bank is likely to make changes to its policies in order to promote growth.
Only time will tell whether these measures have the desired impact, or whether the Japanese economy continues to struggle.