Japan’s economy grew at a much slower rate than previously thought in the third quarter, fresh data showed yesterday, as the country’s fragile recovery from recession was hit by a soaring yen.
The world’s No. 2 economy expanded at an annualized pace of just 1.3 percent in the July to September period, sharply down from an estimate of 4.8 percent, the Cabinet Office said.
It meant the country — which early this year emerged from its worst post-war recession — saw growth of just 0.3 percent in the three months, compared with the initial estimate of 1.2 percent, it said.
PHOTO: REUTERS
The main reason was that capital investment, the amount companies spend on new assets, was revised down to reveal a contraction of 2.8 percent from an original estimate of 1.6 percent growth, the Cabinet Office said.
A key to the fall is the yen’s appreciation against the US dollar, which hit exporters’ income.
Japanese Prime Minister Yukio Hatoyama admitted the difficulty of navigating Asia’s biggest economy out of deep stagnation and stressed the benefits of a new government stimulus package he announced on Tuesday.
“As the Japanese people are already feeling, the economy is not necessarily doing fine,” he told reporters. “I would like to take appropriate economic policies going forward.”
His government announced a stimulus worth up to US$274 billion, with US$80 billion in direct spending, including on green programs, assistance for small business, job security and aid for local communities.
Last week the Bank of Japan said it would pump more than US$100 billion into financial markets through cheap short-term loans.
The lower growth figures on Tuesday were worse than analysts had expected. Private economists had on average predicted the revised data would show annualized growth of 2.7 percent.
Improving overseas markets have helped gradually raise exports and production, which collapsed during the global downturn that from last year slashed demand for Japanese cars, electronics and other goods.
But weak domestic demand, the strong yen and deflation still weigh heavily on Japan’s recovery.
“The domestic economic sentiment has been terrible,” said Masamichi Adachi, senior economist at JP Morgan in Tokyo. “The three reasons for the terrible sentiment are the yen’s rise, deflation and mistrust in the government’s policies.”
The yen hit a 14-year high of around 84 to the dollar last month, which made Japanese firms’ products more expensive and reduced their overseas earnings. The dollar was trading in the ¥88 range in Tokyo yesterday.
Prices have also been falling, and the government last month said Japan is in deflation.
NATIONAL SECURITY: The Chinese influencer shared multiple videos on social media in which she claimed Taiwan is a part of China and supported its annexation Freedom of speech does not allow comments by Chinese residents in Taiwan that compromise national security or social stability, the nation’s top officials said yesterday, after the National Immigration Agency (NIA) revoked the residency permit of a Chinese influencer who published videos advocating China annexing Taiwan by force. Taiwan welcomes all foreigners to settle here and make families so long as they “love the land and people of Taiwan,” Premier Cho Jung-tai (卓榮泰) told lawmakers during a plenary session at the Legislative Yuan in Taipei. The public power of the government must be asserted when necessary and the Ministry of
Taiwan’s Lee Chia-hao (李佳豪) on Sunday won a silver medal at the All England Open Badminton Championships in Birmingham, England, a career best. Lee, 25, took silver in the final of the men’s singles against world No. 1 Shi Yuqi (石宇奇) of China, who won 21-17, 21-19 in a tough match that lasted 51 minutes. After the match, the Taiwanese player, who ranks No. 22 in the world, said it felt unreal to be challenging an opponent of Shi’s caliber. “I had to be in peak form, and constantly switch my rhythm and tactics in order to score points effectively,” he said. Lee got
EMBRACING TAIWAN: US lawmakers have introduced an act aiming to replace the use of ‘Chinese Taipei’ with ‘Taiwan’ across all Washington’s federal agencies A group of US House of Representatives lawmakers has introduced legislation to replace the term “Chinese Taipei” with “Taiwan” across all federal agencies. US Representative Byron Donalds announced the introduction of the “America supports Taiwan act,” which would mandate federal agencies adopt “Taiwan” in place of “Chinese Taipei,” a news release on his page on the US House of Representatives’ Web site said. US representatives Mike Collins, Barry Moore and Tom Tiffany are cosponsors of the legislation, US political newspaper The Hill reported yesterday. “The legislation is a push to normalize the position of Taiwan as an autonomous country, although the official US
CHANGE OF TONE: G7 foreign ministers dropped past reassurances that there is no change in the position of the G7 members on Taiwan, including ‘one China’ policies G7 foreign ministers on Friday took a tough stance on China, stepping up their language on Taiwan and omitting some conciliatory references from past statements, including to “one China” policies. A statement by ministers meeting in Canada mirrored last month’s Japan-US statement in condemning “coercion” toward Taiwan. Compared with a G7 foreign ministers’ statement in November last year, the statement added members’ concerns over China’s nuclear buildup, although it omitted references to their concerns about Beijing’s human rights abuses in Xinjiang, Tibet and Hong Kong. Also missing were references stressing the desire for “constructive and stable relations with China” and
RSS