Japanese markets closed lower on Monday, February 16, the opening session of the week, following disappointing economic data. Stocks in the private sector led the declines, while Chinese markets were closed for the Lunar New Year holiday.

The Japanese economy grew by approximately 0.1% in the fourth and final quarter of last year, ending in December, according to data released by the Cabinet Office this morning. This followed the first contraction in six quarters in the revised third quarter, which showed a decline of 0.6%. The figure fell short of expectations, which had projected growth of 0.4%. On an annualized basis, growth was 0.2%, following a 2.3% decline in the previous quarter. Private consumption was the main driver of this growth, offsetting weak exports and government spending.

The disappointing figures reinforced market expectations that Japanese Prime Minister Sanae Takaichi would proceed with her plans to revive the economy by increasing government spending and cutting taxes. This followed her remarks last week, after the ruling Liberal Democratic Party’s victory, in which she pledged to support economic growth through proactive fiscal policy and promised a two-year suspension of food taxes.

The Nikkei index closed at 56,806 points, down 0.24% or 135 points, while the Tokyo Stock Exchange’s Topix index fell by approximately 0.82% to close at 3,787. Resona Holdings and Olympus Corp. led the Nikkei’s losses, with declines of over 12% and 8%, respectively.