Japan’s latest recession turns out not to have been a recession at all.
The government yesterday said that the economy grew at a relatively robust pace last quarter, reversing a more pessimistic estimate it published three weeks ago.
Output in Japan, Asia’s second-largest economy, expanded at an annualized rate of 1 percent in the three months through September, according to the revised assessment by the Japanese Cabinet Office.
Photo: Reuters
The office had originally said the economy contracted by 0.8 percent.
The latest report, which reflected more buoyant data on business investment and a rosier view of consumer spending, painted a broadly positive picture of the economy’s recent performance. Estimates for previous quarters were also lifted, showing stronger gains and less severe reversals.
The report could relieve the pressure on Japan’s central bank to do more to support growth. Some economists had been predicting that the bank would soon be forced to expand a stimulus program under which it injects trillions of yen into the economy by buying up government bonds.
The strategy is meant to lower borrowing costs and encourage consumers and businesses to spend, but the apparent recession, and an accompanying decline in consumer prices, had raised questions about its effectiveness.
The report could also cheer Japanese Prime Minister Shinzo Abe, who gained office three years ago on a pledge to ramp up growth. So far his “Abenomics” program, in which the central bank’s stimulus efforts have played a crucial role, has lifted the stock market and helped multinational companies by lowering the yen’s exchange rate. However, it has been less successful in passing the gains on to average workers.
Sharp revisions to Japanese GDP numbers are not unusual, although the change announced yesterday was larger than some in the past. The government’s first estimates are announced before data on certain kinds of economic activity are fully available — notably changes in corporate investment and inventories.
In an economy such as Japan’s where trend growth is only slightly above zero, revisions can more easily make the difference between an increase in output and a decline.
The latest numbers are to be subject to further review in the future, although revisions tend to grow smaller as time passes.
The Japanese stock market opened higher after the report was announced, but quickly gave up those gains, possibly reflecting lower expectations for fresh central bank stimulus. In late morning trading yesterday, the Nikkei 225 average was down about 0.2 percent.
In the biggest change from the initial estimate last month, businesses appeared more confident in their production plans. According to the revised GDP data, spending on new factories and equipment by businesses rose at an annualized rate of 0.6 percent last quarter, compared with an initial estimate of a 1.3 percent decline.
Household spending increased 0.5 percent, slightly more than the first estimate of 0.4 percent, and businesses reduced their inventories less aggressively than initially believed.
Through the first three quarters of the year, the economy grew at an average rate of about 1.6 percent, according to the latest data — roughly twice its typical pace of growth over the past two decades. However, the performance was volatile: Output contracted 0.5 percent in the second quarter after surging 4.4 percent in the first.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”