Japan’s economy rebounded at a weaker pace than first thought in the second quarter as companies cut investment and stockpiles amid a slow recovery from the worst recession in decades, the government said yesterday.
The world’s second-largest economy grew 0.6 percent in April-June from the previous quarter, worse than an initial estimate of 0.9 percent, data showed. Annualized growth was revised down to 2.3 percent from 3.7 percent.
But it was still the first expansion in five quarters — ending a year-long recession — and analysts said the downgrade was largely because of cuts by companies to their stockpiles of unsold goods, which bode well for the future.
Outgoing Economic and Fiscal Policy Minister Yoshimasa Hayashi said the decline in stockpiles was a positive development.
“From a broad prospective, it is a positive development that progress is being made in inventory adjustments,” Hayashi said.
Japan’s economy started shrinking in the second quarter of last year amid global economic slowdown and suffered annualized contractions of more than 12 percent for two consecutive quarters up to March.
Hideyuki Araki, an economist at Resona Research Institute, said companies were still struggling with excess capacity.
“Production is recovering on the back of improving exports but the future still looks uncertain,” with deflation squeezing corporate profits, he said.
Firms’ investment in factories and equipment is unlikely to show a strong upturn anytime soon unless overall demand recovers, he said.
Corporate inventory cuts reduced second-quarter growth by 0.8 percentage points, while lower capital spending lopped off 0.7 points, the data showed.
Private-sector capital investment shrank a revised 4.8 percent from the previous quarter, worse than previously thought.
Business leaders are cautious about the policies of the incoming government, led by the Democratic Party of Japan (DPJ), which are to be launched next week.
“Since the DPJ advocates deeper cuts in greenhouse gas emissions, higher minimum wages and other policies [which can affect business activities], companies want to see what steps it will actually take,” Araki said.
The DPJ, which won a recent landslide election victory, has promised to boost household incomes with measures including cash allowances for families, a higher minimum wage and better worker protection.
DEFENSE: The first set of three NASAMS that were previously purchased is expected to be delivered by the end of this year and deployed near the capital, sources said Taiwan plans to procure 28 more sets of M-142 High Mobility Artillery Rocket Systems (HIMARS), as well as nine additional sets of National Advanced Surface-to-Air Missile Systems (NASAMS), military sources said yesterday. Taiwan had previously purchased 29 HIMARS launchers from the US and received the first 11 last year. Once the planned purchases are completed and delivered, Taiwan would have 57 sets of HIMARS. The army has also increased the number of MGM-140 Army Tactical Missile Systems (ATACMS) purchased from 64 to 84, the sources added. Each HIMARS launch pod can carry six Guided Multiple Launch Rocket Systems, capable of
TRAJECTORY: The severe tropical storm is predicted to be closest to Taiwan on Wednesday and Thursday, and would influence the nation to varying degrees, a forecaster said The Central Weather Administration (CWA) yesterday said it would likely issue a sea warning for Tropical Storm Podul tomorrow morning and a land warning that evening at the earliest. CWA forecaster Lin Ting-yi (林定宜) said the severe tropical storm is predicted to be closest to Taiwan on Wednesday and Thursday. As of 2pm yesterday, the storm was moving west at 21kph and packing sustained winds of 108kph and gusts of up to 136.8kph, the CWA said. Lin said that the tropical storm was about 1,710km east of Oluanpi (鵝鑾鼻), Taiwan’s southernmost tip, with two possible trajectories over the next one
Tropical Storm Podul strengthened into a typhoon at 8pm yesterday, the Central Weather Administration (CWA) said, with a sea warning to be issued late last night or early this morning. As of 8pm, the typhoon was 1,020km east of Oluanpi (鵝鑾鼻), Taiwan’s southernmost tip, moving west at 23kph. The storm carried maximum sustained winds of 119kph and gusts reaching 155kph, the CWA said. Based on the tropical storm’s trajectory, a land warning could be issued any time from midday today, it added. CWA forecaster Chang Chun-yao (張竣堯) said Podul is a fast-moving storm that is forecast to bring its heaviest rainfall and strongest
CRITICISM: It is deeply regrettable that China, which is pursuing nuclear weapons, has suppressed Taiwan, which is pursuing peace, a government official said Representative to Japan Lee Yi-yang (李逸洋) yesterday accused Beijing of interference after Taiwan’s official delegation to the Nagasaki Peace Memorial Ceremony in Japan was assigned seating in the “international non-governmental organizations [NGO]” area. “Taiwan is by no means an international NGO, but a sovereign nation that is active on the international stage,” Lee said. Lee and Chen Ming-chun (陳銘俊), head of the Taipei Economic and Cultural Office (TECO) in Fukuoka, attended the ceremony in Nagasaki yesterday, which marked the 80th anniversary of the atomic bombing of the city. That followed Lee’s attendance at the Hiroshima Peace Memorial Ceremony on Wednesday
RSS