Japan’s Economic Rebound From Natural Disasters Fails to Impress
Published Feb 13, 2019 08:23PM ET
Japan’s Economic Rebound From Natural Disasters Fails to Impress
(Bloomberg) -- Japan’s economy rebounded modestly in the final three months of 2018, as domestic demand drove growth while weakness in exports fueled concerns about a slowdown in China and elsewhere.
Gross domestic product expanded an annualized 1.4 percent in the three months through December, according to a Cabinet Office report Thursday, matching economists’ estimates. That followed the biggest contraction since 2014 during a natural disaster-hit third quarter.
Key Insights
- A rebound in Japan offers policy makers some respite amid fears about global growth as China’s economy slows and the trade war between Washington and Beijing rumbles on. Still, the expansion failed to impress compared against a quarter badly affected by typhoons and an earthquake.
- The increase in exports was weaker in scale than the previous quarter’s fall, suggesting that China’s slowdown is weighing on trade, as noted by economy minister Toshimitsu Motegi. Given a bigger jump in imports, net exports shaved 0.3 percentage point from quarterly growth, matching the biggest slice it has taken in the last five years.
- "Exports were supposed to show a big jump after the previous fall but they just limped along. If you average all the data out, Japan’s economy is clearly slowing," said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.
- The rebound won’t change the Bank of Japan’s resolve to continue with its current stimulus, given sagging inflation and uncertainties surrounding the global economy.
- Prime Minister Shinzo Abe’s administration is looking for the economy to show solid momentum ahead of a potentially growth-sapping sales tax increase in October 2019.
Get more
- Exports rose 0.9 percent from the previous quarter, compared with a 1.4 percent drop in July-September.
- Business investment climbed 2.4 percent from the previous quarter. Economists’ median forecast was for a gain of 1.8 percent.
- Private consumption increased 0.6 percent from the previous quarter. The median estimate was for a 0.7 percent gain.
Get The News You Want
Written By: Bloomberg
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.