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Weak activity won’t forestall BoJ tightening plans

While Japan's GDP contracted for the second consecutive quarter, other data overwhelmingly point to the economy holding up rather than falling into recession. And while the third consecutive fall in consumption will raise some eyebrows at the Bank of Japan, the Bank tends to put more emphasis on its own consumption activity index, which looks less dismal. Accordingly, we doubt that the latest GDP figures will upend the BoJ's plans to end negative interest rates over the coming months.

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