Japan Economic Outlook
April 30, 2019Growth momentum likely moderated in Q1, mostly on the back of cooling global demand, which traditionally fuels activity in the all-important manufacturing sector and shores up business investment. Against this backdrop, industrial production fell on a monthly basis in March and sentiment among large manufacturers declined to a two-year low in Q1 2019. An uncertain economic outlook could have started to weigh on household spending, as consumer confidence fell to an over three-year low in March. In an attempt to rekindle economic growth, in late March the parliament approved a record JPY 101 trillion (USD 920 billion) budget for FY 2019 (April 2019–March 2020), which increases spending on welfare, public works and defense. The budget also allocates resources to mitigate the negative impact of a planned sales tax hike in October.
Japan Economic GrowthEconomic growth is expected to decelerate further this year as subdued global demand will take its toll on the country’s external sector and the October sales tax hike will put a dent in consumer spending. However, a boost in fiscal stimulus and a potential recovery in global demand in H2 should cushion the economy against a sharp slowdown. FocusEconomics panelists see the economy growing 0.7% in 2019, which is down 0.1 percentage points from last month’s forecast, and 0.6% in 2020.
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|Bond Yield||-0.05||-4.41 %||May 13|
|Exchange Rate||109.3||-0.35 %||May 13|
|Stock Market||21,191||0.40 %||May 13|
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Japan Economic News
May 23, 2019
The Nikkei flash manufacturing Purchasing Managers’ Index (PMI) fell from April’s 50.2 (previously reported: 49.5) to 49.6 in May.
May 22, 2019
Nominal yen-denominated merchandise exports fell 2.4% year-on-year in April, matching March’s result.
May 22, 2019
Core machinery orders, a leading indicator for capital spending over a three- to six-month period, posted the strongest increase in five months in March, offering hopes that capital expending could revive in the months ahead.
May 20, 2019
The economy expanded for the second consecutive period in the first quarter of 2019, defying market expectations and supporting Prime Minister Shinzo Abe’s plan to hike the sales tax in October this year.
May 9, 2019
Consumer sentiment declined from 40.5 in March to 40.4 in April.