Japan's GDP growth lower than initially estimated


Japan has revised down its Q4 GDP growth calculation to 0.2% from an initial 0.3%, with the economy held back by weaker-than-estimated capex and consumer spending.

Annualized GDP was +0.7% vs +1%. (PR)

The current-account deficit increased to a record ¥1.59T ($15.4B) in January from ¥638.6B in December. (PR)

"Capital spending remains weak and exports are not coming back to strengthen the recovery, and without support in these areas, Japan's economy is going to contract significantly in the second quarter," says economist Yoshimasa Maruyama. "The negative effect from the (upcoming) sales tax rise could be worse than the BOJ and government expect."

The Nikkei is -0.9%, while the USJ-JPY is -0.1% to ¥103.12.

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Comments (3)
  • Philip Marlowe
    , contributor
    Comments (1547) | Send Message
     
    They should just scrap the sales tax rise. If the economy is not growing much now that people are supposed to be buying stuff like crazy in order to avoid the impending sales tax, it will really crash when the tax is established.

     

    Anyways, a VAT tax is very bad for a modern consumer economy and it will be really bad to a country in a precarious position like japan.
    10 Mar 2014, 02:42 AM Reply Like
  • JohnMazz
    , contributor
    Comments (6) | Send Message
     
    They're not raising the sales tax because they want to. They have to show the bond market that they are serious about getting their debt under control otherwise interest rates will rise and that will be game over. Short JGB's here. Yeah, I know it's the "widow maker " trade but really, how much lower could interest rates go from here ? It the bond market comes unglued it could be a big payoff.
    19 Mar 2014, 03:45 AM Reply Like
  • User 353732
    , contributor
    Comments (5152) | Send Message
     
    Every year Japan predicts an end to stagnation and a revival of growth and every year the growth projections are lowered.
    Japan is now in a multi generational demographic, economic, technological and geo strategic decline. Good policies can make this decline graceful and gradual: current policies will only accelerate the descent.
    10 Mar 2014, 07:34 AM Reply Like
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