Summary

• The Japanese economy grew firmly in the first quarter, demonstrating the resilience of the economy amid global headwinds.
• Despite the recent bond market sell-off, the Bank of Japan is likely to prioritise inflation risks and deliver a 25 bp hike in June.
• Although long-term JGB yields have recently climbed, the BoJ's rate decisions should prioritise modifications to its accommodative monetary policy.

By Min Joo Kang, Senior Economist, South Korea and Japan

GDP growth beat the market consensus in first quarter

The Japanese economy grew by 0.5% quarter-on-quarter, seasonally adjusted, in the first quarter (vs. 0.4% market consensus, 0.3% ING). This data, of course, reflects a

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