Japan's economy rebounded in the third quarter, growing at an annual pace of 2.6 percent, the government said yesterday, but the outlook for the world's second-largest economy is clouded by worries about a slowdown in the US.
Separately, the Bank of Japan left its key interest rate unchanged at 0.5 percent amid deepening concerns that problems in the US housing market will drag on growth in the US, a vital export market for Japanese companies.
"Looking ahead, there is great concern over whether or not the decline in the US economy will worsen," Economy Minister Hiroko Ota said, adding that the yen's recent strength against the dollar, which erodes exporter earnings, was worrying.
"One important point to look at is how long the yen's current strength will continue," she said. "If that is sustained, there will be an impact on corporate earnings."
The dollar fell below ?110 on Monday for the first time in a year and a half and was trading at ?110.15 yesterday afternoon.
Overall, the GDP report was fairly positive, economists said, indicating that Japan had withstood the impact of the subprime mortgage crisis in the US, at least so far.
Growth bounced back from the previous quarter, when the economy shrank at an annual rate of 1.2 percent, and most areas of the economy -- except housing -- seemed to be doing well.
Business investment rose a preliminary 1.7 percent in the July-September quarter, rebounding from a 2.1 percent decline in the previous quarter as companies bought more general industrial machinery, according to the Cabinet Office.
Solid sales in the travel industry contributed to a 0.3 percent gain in consumer spending, which accounts for more than half of Japan's GDP.
Exports rose 2.9 percent, up for the 10th straight quarter and much faster than a revised 0.9 percent gain in the April-June quarter as Asian nations bought more Japanese goods such as cars and motorcycles.
"Exports were the main factor behind the rise, led by strong growth in shipments to China," said Taro Saito, a senior economist at the NLI Research Institute.
However, the GDP report is by nature a backward-looking report and Saito cautioned that a slowdown in the US would likely limit exports in the future.
The biggest drag on growth was housing investment, which plunged 7.8 percent -- the largest drop since an 11.1 percent tumble in the April-June 1997 quarter -- to mark the third-straight quarterly decline.
Though its contribution to the GDP is small at only 3 percent, the ongoing drop is worrying as it could hurt factory output and business investment by cooling demand for construction materials and durable goods such as refrigerators and TVs.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said it plans to ship its new 1 megawatt charging systems for electric trucks and buses in the first half of next year at the earliest. The new charging piles, which deliver up to 1 megawatt of charging power, are designed for heavy-duty electric vehicles, and support a maximum current of 1,500 amperes and output of 1,250 volts, Delta said in a news release. “If everything goes smoothly, we could begin shipping those new charging systems as early as in the first half of next year,” a company official said. The new
RSS