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NIKKEI225 Gets a Boost from Better than Forecast GDP Data

Gino Bruno D'Alessio•Monday, February 17, 2025•2 min read
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GDP data for the 4th quarter of 2024 showed the economy expanded faster than expected. Leaving the BoJ on track to raise rates.

nikkei225 gest some relief from better than expected gdp data

This morning the NIKKEI225 reversed Friday’s decline posting a small gain of 0.15% after today’s GDP beat. The index remains in a wide trading range due mostly to uncertainty about BoJ hiking.

Positive GDP Data not Enough to Boost a Rally in NIKKEI225

The Q4 2024 GDP forecast was for a rise of 1.0% YoY, today’s data beat that prediction by a multiple of close to 3.

Private consumption, which accounts for more than 50% of economic activity rose by 0.1%. That seems a small number, but the forecast was for a decline of 0.3%.

Capital spending, which reversed the previous quarter’s decline, rose by 0.5% but missed forecast for an increase of 1.0%.

Economists highlight that continued price increases for food and energy may dampen consumer sentiment and reduce upcoming GDP data expansion.

NIKKEI225 Live Chart

NIKKEI225

 

BoJ on Route to More Hikes in 2025

GDP growth is one of the key factors in the BoJ’s policy decision making. A rapidly expanding economy will inevitably create price pressure, and hiking rates is how the central bank would respond.

The Japanese economy is also heavily reliant on exports and the USA is its largest trade partner. The USA accounts for 20% of all Japanese exports, and the threat of trade tariffs is a considerable concern.

However, the prevalent view from economists is that the current GDP growth and price pressures support the BoJ view that further hikes are due in 2025.

The nominal GDP for 2024 topped $4 trillion for the first time, just below the nominal GDP of Germany, keeping the country in 4th place of the world’s largest economies.

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ABOUT THE AUTHOR See More
Gino Bruno D'Alessio
Gino D’Alessio is a professional Forex trader with 20+ years of experience in the financial markets as a broker-dealer. Having worked in New York and London, Gino is regularly featured on Seeking Alpha. He completed the CAIA program in 2015, which also gave great insight into global macro factors. His main focus is FX majors, indices and commodities.
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