Japan’s GDP contracted 1.1 percent annually in the fourth quarter of last year, providing further evidence that the world’s third-largest economy is failing to gain traction despite unprecedented efforts by the central bank to spur growth.
The revised figures released yesterday compared with a 1.4 percent year-on-year expansion in the July-to-September quarter. They showed a modest improvement over the previous estimate of a 1.4 percent contraction in the October-to-December quarter.
However, data suggest Japan’s growth has remained tepid early this year, raising the likelihood of further government action to help boost growth. That could include further moves by the Bank of Japan to encourage lending, extra government spending and possibly a second delay in a sales tax hike scheduled for April next year.
Photo: Reuters
“Companies have not been as downbeat about production in the month ahead since the 2008 recession. What’s more, consumer spending fell further in January as indicated by dips in ‘core’ household spending and retail sales,” Capital Economics analsyst Marcel Thieliant said in a commentary.
In quarterly terms, the economy shrank 0.3 percent in the last quarter compared with a preliminary estimate of a 0.4 percent contraction. Business investment climbed 1.5 percent, helping to offset a decline in spending on housing. Overall public investment dropped 3.4 percent.
Japan’s economy grew 0.5 percent last year after flat-lining in 2014
Economists are divided on whether the Bank of Japan, which holds a policy meeting next week, will expand asset purchases that are pumping trillions of yen into the economy to help combat deflation.
Last month, the central bank began charging a fee on some commercial banks’ deposits, imposing a negative interest rate policy that has driven bond yields and interest rates on mortgages and savings deposits lower.
Stuck with diminishing returns on their savings and unhappy with a newly implemented official identification system known as “My Number,” many Japanese households are investing overseas or just stashing cash at home: Sales of safes have soared so quickly that retailers said manufacturers cannot keep up with demand.
Bank of Japan Governor Haruhiko Kuroda defended the central bank’s strategy in a speech on Monday.
Companies and consumers would eventually begin spending more, enabling Japan to reach a 2 percent inflation target and vanquish deflation, he said.
“Japan’s economy has improved significantly from three years ago,” Kuroda said, noting low unemployment and record-high corporate profits — mainly due to a weakening of Japan’s currency resulting from the Bank of Japan’s monetary easing.
However, he acknowledged lackluster growth in corporate investment and wages.
Since banks’ profit margins are being squeezed, “there is a strong concern that the introduction of a negative interest rate will make the situation even worse,” Kuroda said, adding that an end to deflation would lead to higher interest rates in the long run.
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
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],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained