Japanese 4th quarter GDP revised lower but machinery orders rise in January

Japan's economy shrank a little more than previously estimated in the fourth quarter. Bloomberg reports today:

Japan’s economy contracted more than the government initially estimated in the fourth quarter, because of a downward revision to capital investment and consumer spending.

Gross domestic product shrank at an annualized 1.3 percent rate in the three months ended Dec. 31, more than the 1.1 percent contraction reported last month, the Cabinet Office said today in Tokyo. The median forecast of 26 economists surveyed by Bloomberg News was for a 1.2 percent contraction.

Data for recent months have been positive though. For example, Reuters reported on Wednesday that Japan's machinery orders rose in January.

Japan's core machinery orders rose more than expected in January, marking their second straight month of gains as rising exports and robust profits encourage companies to lift spending on plant and equipment...

Core machinery orders, a highly volatile data series regarded as a leading indicator of capital spending, rose 4.2 percent in January from the previous month, Cabinet Office data showed on Wednesday.

There were also positive data out from Germany on Wednesday. Bloomberg reports:

Industrial production in Germany, Europe’s largest economy, rose in January as construction activity rebounded from its winter hiatus.

Output increased 1.8 percent from December, when it slipped a revised 0.6 percent, the Economy Ministry in Berlin said today. Economists had forecast a 1.7 percent gain, the median of 35 estimates in a Bloomberg News survey showed. In the year, production rose 12.5 percent when adjusted for working days.

The almost-continuous flow of positive economic data around the world is pushing central banks into tightening monetary policy, not least in Asia. From Bloomberg on Wednesday:

Asian central banks stepped up their battle against inflation as Thailand and Vietnam raised interest rates, seeking to defuse price pressures before the global jump in oil costs reverberates through the region.

The Bank of Thailand increased the one-day bond repurchase rate by a quarter of a percentage point to 2.50 percent, it said in Bangkok today...

“We still see the need to continue rate normalization,” Bank of Thailand Assistant Governor Paiboon Kittisrikangwan said today, pointing out that deposit rates are still below inflation levels...

The Bank of Thailand’s rate increase was predicted by 17 out of 20 economists surveyed by Bloomberg News, with three seeing no change. Vietnam’s central bank raised the refinancing rate, one of the main policy tools identified by the State Bank of Vietnam last week, to 12 percent yesterday, boosting borrowing costs for the third time in as many weeks. The bank also lifted the discount rate to 12 percent from 7 percent.