Consumption in Japan
Japan - Consumption
Q1 GDP growth revised down, although the economy still looks fairly healthy
The Japanese economy expanded at a weaker rate than previously reported in Q1, as private consumption growth was slower than in the initial estimate and inventories recorded a sizeable drop, according to revised data released on 8 June. GDP rose 1.0% in Q1 over the previous quarter in seasonally adjusted annualized terms (SAAR), which was below the 2.2% increase reported in the first release. The print undershot Q4’s result of 1.4% growth and marked the lowest print since Q4 2015. On an annual basis, economic activity rose 1.3% in Q1. The print was down from the 1.6% increase reported in the first estimate and marked a deceleration from Q4’s 1.6% rise.
The downwardly adjusted figure reflected a sharp decline in the contribution of private inventories to growth, with private inventories subtracting 0.6 percentage points from overall output in Q1. Although the expansion in private consumption was weaker than previously thought, it still marked a sizeable acceleration from Q4’s reading, when household spending nearly stalled. Consumption is being pushed up by gradually improving wage growth and record-low unemployment. Healthy demand for Japanese goods and the Central Bank’s accommodative monetary policy caused private non-residential investment to expand at a stronger rate than in the initial estimate, representing an encouraging sign for economic activity this year. The contribution from the external sector to overall growth was unchanged.
Despite the downward revision, strong investment growth and healthy dynamics in the external sector are expected to support the economy this year. Moreover, Q1’s reading represented the fifth consecutive quarterly expansion in national output, the longest such run in over a decade.
The Bank of Japan (BoJ) expects the economy to expand between 1.4% and 1.6% in fiscal year 2017, which ends in March 2018. In the subsequent fiscal year, the BoJ sees GDP growth of between 1.1% and 1.3%. FocusEconomics Consensus Forecast panelists see GDP expanding 1.2% in calendar year 2017, which is up 0.1 percentage points from last month’s projection. In 2018, the panel sees the economy growing 0.9%.
Japan - Consumption Data
|Consumption (annual variation in %)||-0.4||2.1||2.4||-0.9||-0.4|
5 years of economic forecasts for more than 30 economic indicators.
|Bond Yield||0.08||14.29 %||Jul 26|
|Exchange Rate||111.2||-0.64 %||Jul 26|
|Stock Market||20,050||0.48 %||Jul 26|
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July 24, 2017
The Nikkei Flash Manufacturing Purchasing Managers’ Index (PMI) fell from June’s revised 52.4 (previously reported: 53.1) to 52.2 in July.
July 20, 2017
The Bank of Japan (BoJ) left its monetary policy stance at its 19–20 July meeting, voting to continue with its program of Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control as long as is necessary to achieve and maintain its 2.0% inflation target.
July 20, 2017
Nominal exports valued in yen increased 9.7% from the same month last year in June, following May’s 14.9% increase.
July 10, 2017
Core machinery orders (a leading indicator of capital spending over a three- to six-month period) declined for the second consecutive month in May, casting doubts about the strength of firms’ capital spending.
July 3, 2017
According to the Bank of Japan’s quarterly Tankan business survey, sentiment among large manufacturers jumped to the highest level since Q1 2014.