Japan’s economy contracted for a second straight quarter in July-September, revised government data showed yesterday, indicating that weak global demand nudged the export-reliant economy into a mild recession.
Analysts expect another quarter of contraction in the final three months of this year due to sluggish exports to China, keeping the Bank of Japan under pressure to loosen monetary policy as early as this month.
“There have been some positive indicators out in October but there is still a good chance that Japan’s economy will suffer another contraction in the October-December quarter,” said Takeshi Minami, chief economist at Norinchukin Research Institute in Tokyo.
“The Bank of Japan may ease policy this month, as suggested in remarks by Deputy Governor Kiyohiko Nishimura last week. The bias is for further easing, so even if the central bank stands pat this month it will likely act in January,” he said.
Japan’s GDP shrank 0.9 percent in July-September from the previous quarter, revised government figures showed, unchanged from preliminary data reported last month. That compared with economists’ median forecast for a 0.8 percent contraction.
The figure translates into an annualized contraction of 3.5 percent in real, price-adjusted terms, which is also unchanged from the preliminary data issued last month.
The government revised GDP figures for April-June to show a small contraction of 0.03 percent, indicating that the economy contracted for two straight quarters and meeting the technical definition of a recession. The previous figure had shown growth of 0.1 percent.
Capital expenditure fell a revised 3 percent in the third quarter, compared with a 2.8 percent decline expected by economists and a preliminary reading of a 3.2 percent decline.
Separate data showed Japan’s current account surplus fell 29.4 percent in October from a year earlier, compared with the median estimate for a 59.2 percent annual decline, largely due to shrinking exports and increasing costs of fuel oil imports.
The nation’s consumer confidence and service sector business sentiment showed mixed results last month.
The survey’s sentiment index for general households, which includes views on incomes and jobs, fell for the third month in a row.
This prompted the government to cut its assessment on consumer confidence, saying there were signs of weakness.
Meanwhile, Japan’s service sector sentiment index, a survey of workers such as taxi drivers, hotel workers and restaurant staff, slightly improved for the first time in four months, but the government kept its view on the index that the economy remained weak.
Nishimura said last week the central bank will debate whether further stimulus is needed to support the economy, offering the strongest signal to date that it may loosen policy again at its next rate review on Dec. 19 and Dec. 20 in the face of growing political pressure.
The London Metal Exchange (LME) discovered bags of stones instead of the nickel that underpinned a handful of its contracts at a warehouse in Rotterdam, the Netherlands, in a revelation that would deliver another blow to confidence in the embattled exchange. The amount of metal represents just 0.14 percent of live nickel inventories on the LME, worth about US$1.3 million at current prices, so the immediate effect on the metals markets is limited. However, the shock announcement has much wider implications. In an industry riddled with scandals, the LME’s contracts are viewed as unquestionably safe. The news that even a few of
Oil on Friday posted its worst weekly loss since the early months of the COVID-19 pandemic as banking turmoil poisoned investor sentiment. West Texas Intermediate for April delivery dropped 2.36 percent to US$66.74 per barrel, falling 12.96 percent for the week, the largest drop in almost three years. Brent crude for May delivery fell 2.32 percent to US$72.97, posting a weekly loss of 11.85 percent. The failure of Silicon Valley Bank and troubles at Credit Suisse Group AG drove investors from risk assets, with oil-options covering accelerating the sell-off. “Crude action this week reminded many of how quickly the commodity can be decimated by
Singapore pushed New York off the top spot for the strongest growth in residential rents in the final quarter of last year, fueled by a supply crunch and strong demand. The city-state saw annual rents jump 28 percent in the quarter from a year earlier, Knight Frank said in a report. New York followed with 19 percent growth, while London and Toronto took the third and fourth spots, a survey of prime residential rents across 10 cities showed. Singapore’s soaring rents — driven partly due to a lack of supply of new housing during the COVID-19 pandemic — have been a source of
US-based mobile chip designer Qualcomm Inc yesterday opened a manufacturing engineering and testing center in Hsinchu, expanding its presence in Taiwan. Qualcomm also expects to accelerate its purchases in Taiwan, which already rose to NT$240 billion (US$7.9 billion) last year, up from NT$90 billion five years earlier, and should hit NT$300 billion next year. The center is to provide services for the supply chain in the semiconductor industry, Roawen Chen (陳若文), senior vice president and chief supply chain and operations officer of Qualcomm, said at the facility’s inauguration ceremony. It is Qualcomm’s largest and most advanced engineering testing center outside of the company’s