Japan’s 4th-quarter GDP revised up



Japan’s economy grew more than earlier estimated in the fourth quarter as capital expenditure grew at its fastest in almost three years, welcome news for policymakers as they begin to discuss how to wind down years of massive stimulus.

The economy grew an annualised 1.2% in October-December, less than the median estimate for 1.6% annualised growth but more than the preliminary reading of a 1.0% annualised expansion.

The figure translates into quarter-on-quarter growth of 0.3%, versus a preliminary reading of 0.2% growth and the median estimate for 0.4% growth.

A stronger pace of growth will be a boon to the government as policymakers have been counting on an increase in business investment to drive future expansion and increase low productivity.

However, growth is still not robust enough to generate sustained inflation that the Bank of Japan wants, and the risk of rising protectionism could discourage Japanese exporters from raising wages, seen as key to boosting consumption and economic activity at home.

“The economy will remain in recovery mode, because we are seeing the benefits of capital expenditure from manufacturers and the construction sector,” said Shuji Tonouchi, senior market economist at Mitsubishi UFJ Morgan Stanley Securities.

“I am a little worried about the strength of consumer spending. I am still not sure how protectionism will materialise, but this is also a potential risk.”

Private consumption registered no growth in October-December, the same as preliminary data. Sluggish household spending has kept the country in prolonged deflation and been a key challenge for the BOJ in meeting its 2% price goal via its massive bond buying programme.

Households cut spending for the 11th straight month in January even as the job market tightened further, separate data showed earlier this month. Private consumption accounts for around 60% of GDP.

The capital expenditure component of GDP rose 2.0% from the previous quarter, which was more than the forecast for 1.7% growth, and faster than the preliminary 0.9%.

The revised data showed capital expenditure grew at the fastest since a 2.3% quarterly rise in January-March 2014.

Increased investment from the real estate sector, construction companies, food processing companies and electronics makers drove gains in capex, a Cabinet Office official told Reuters.

Some economists expect capital expenditure to increase further as companies will soon have to start investing in more efficient equipment to deal with a shrinking pool of workers as the population ages.

However, U.S. economic policy poses a risk, because companies could suddenly turn cautious on capex if U.S. President Donald Trump adopts protectionist trade policies.

There are also concerns that protectionism could hurt Japan’s exports.

After capital expenditure, net exports were the second-biggest driver of growth in the fourth quarter, revised data showed.

However, the plus 0.2 percentage point contribution from net exports was unchanged from preliminary figures, which raises questions about the strength of external demand.

(c) Copyright Thomson Reuters 2017.



Published on Mar 7, 2017

Jihadi Justin Trudeau has moved the M103 2nd reading from April to March 21, 2017 so that he can bring Islamofascism to Canada as quickly as possible.

Are you all going to stand for this?

Here is Iqra Khalid’s TERROR Motion M103


Systemic racism and religious discrimination

Text of the Motion:

That, in the opinion of the House, the government should: (a) recognize the need to quell the increasing public climate of hate and fear; (b) condemn Islamophobia and all forms of systemic racism and religious discrimination and take note of House of Commons’ petition e-411 and the issues raised by it; and (c) request that the Standing Committee on Canadian Heritage undertake a study on how the government could (i) develop a whole-of-government approach to reducing or eliminating systemic racism and religious discrimination including Islamophobia, in Canada, while ensuring a community-centered focus with a holistic response through evidence-based policy-making, (ii) collect data to contextualize hate crime reports and to conduct needs assessments for impacted communities, and that the Committee should present its findings and recommendations to the House no later than 240 calendar days from the adoption of this motion, provided that in its report, the Committee should make recommendations that the government may use to better reflect the enshrined rights and freedoms in the Constitution Acts, including the Canadian Charter of Rights and Freedoms.

Kevin J. Johnston
Journalist & Social Commentator