Japan Growth Miss Spurs Policy Focus

• Overnight activity was quiet, with participation thinned by the US public holiday, ongoing Lunar New Year closures in China and reduced trading hours across parts of Asia.
• Japan’s early read on fourth-quarter growth showed only a slight expansion of 0.1% q/q, a turnaround from the prior quarter’s contraction but still short of expectations for a stronger recovery.
• The softer outcome adds weight to the view that policy support may need to broaden, consistent with PM Takaichi’s proposals such as food tax relief, and nudged expectations for further BoJ rate increases marginally lower.
• Locally, yields drifted lower alongside the muted offshore tone, leaving the Australian 10-year bond at 4.71%. Focus now shifts to the release of the RBA February meeting minutes for additional guidance on policy thinking.