Monday December 10 2018
Japan GDP Contracts More than Anticipated
Cabinet Office | Joana Taborda | joana.taborda@tradingeconomics.com

The Japanese economy shrank 0.6 percent on quarter in the third quarter of 2018, faster than a preliminary estimate of a 0.3 percent drop and market expectations of a 0.5 percent decline. It is the steepest contraction since the second quarter of 2014, following a downwardly revised 0.7 percent expansion in the previous period. Natural disasters like flood and earthquake weighed more on personal consumption and capital investment than initially estimated.

Private consumption declined 0.2 percent, faster than a 0.1 percent fall in the preliminary estimate and capital investment shrank 2.8 percent, compared to a preliminary drop of 0.2 percent. Public investment shrank 2 percent, also faster than 1.9 percent in earlier figures. Net external demand contributed negatively (-0.1 percentage point), matching earlier estimates as exports shrank 1.8 percent and imports fell 1.4 percent.
 
On the  other hand, rises were seen in private residential investment (0.7 percent compared to a preliminary of 0.6 percent) and government spending (0.2 percent, in line with the previous release).
 
On an annualized basis, the economy shrank 2.5 percent, much worse than preliminary estimates of a 1.2 percent fall and forecasts of a 1.9 percent decline. It is the steepest contraction since the second quarter of 2014 and follows a downwardly revised 2.8 percent growth in the second quarter. Capital expenditure slumped 10.6 percent, private spending went down 0.7 percent and external demand contributed negatively (-0.3 percentage points).




Friday November 30 2018
Japan Jobless Rate Inches Higher to 2.4% in October
Statistics Japan l Rida | rida@tradingeconomics.com

The unemployment rate in Japan edged up to 2.4 percent in October of 2018 from a 4-month low of 2.3 percent in the previous month and slightly above market expectations of 2.3 percent. Meanwhile, the jobs-to-applicants ratio fell unexpectedly to 1.62 from 1.64 in September and missing estimates of 1.65.

The number of unemployed increased by 80 thousand from a month earlier to 1.68 million in October, and employment rose 230 thousand to 66.88 million. The labour force went up 330 thousand to 68.58 million and those detached from the labour force dropped 310 thousand to 42.33 million.

Youth unemployment rate, measuring job-seekers between 15 and 24 years old, was steady at 3.4 percent in October.

A year earlier, the unemployment rate was higher at 2.8 percent.




Thursday November 22 2018
Japan Inflation Rate Rises to 8-Month High in October
Statistics Japan | Rida | rida@tradingeconomics.com

Japan's consumer price inflation rose to 1.4 percent year-on-year in October 2018 from 1.2 percent in the previous month and matching market estimates. It was the highest rate since February, mainly due to a jump in prices of food.

Prices of food increased by 2.4 percent from a year earlier in October, much faster than a 1.8 percent rise in September. It was the highest food inflation in eight months mainly driven by prices of vegetables & seaweeds (14.4 percent vs 8.1 percent), of which fresh vegetables (20.4 percent vs 10.4 percent); meats (0.4 percent vs 0.3 percent); fruits (7.8 percent vs 3.5 percent) of which fresh fruits (8.3 percent vs 3.5 percent). Meanwhile, inflation was unchanged for meals outside the home (at 1 percent), and slowed for cooked food (0.7 percent vs 0.9 percent); cereals (1.6 percent vs 2 percent); fish & seafood (1.6 percent vs 1.9 percent), of which fresh fish & seafood (0.1 percent vs 0.4 percent); and dairy products & eggs (3 percent vs 3.1 percent).

Additional upward pressure came from: transportation and communication (1.9 percent vs 2.1 percent); culture and recreation (1.4 percent vs 1 percent); fuel, light & water charges (4.4 percent vs 3.7 percent), of which electricity (4.5 percent vs 3.6 percent); miscellaneous goods and services (0.8 percent vs 0.2 percent); medical care (1.1 percent vs 1 percent); clothes and footwear (0.1 percent, the same as in September); and education (0.5 percent, the same as in September). Meantime, cost continued to fall for housing (-0.2 percent vs -0.1 percent) and furniture and household utensils (-1 percent, the same as in September).

Core inflation rate, which excludes fresh food, stood at 1 percent, unchanged from the previous month and in line with expectations. It remained the highest figure since February.

On a monthly basis, consumer prices went up 0.2 percent in October, after being unchanged in September.




Monday November 19 2018
Japan Trade Balance Swings to Defict in October
Ministry of Finance l Luisa Carvalho | luisa.carvalho@tradingeconomics.com

Japan recorded a trade deficit of JPY 449 billion in October 2018 compared to a JPY 278.6 billion surplus in the same month a year ago, much worse than market expectations of a JPY 70 billion gap. Imports jumped the most since 2014, as rising energy prices boosted oil imports while exports rebounded less than expected.

Imports jumped 19.9 percent year-on-year to JPY 7.69 trillion, much faster than a 7 percent rise in September and higher than market estimates of 14.5 percent. It is the biggest annual gain in imports since January of 2014 and the highest value since March of 2014. Purchases of mineral fuels soared 36.3 percent, driven by petroleum (33.7 percent), LNG (49.3 percent) and coal (14.3 percent). Also, imports increased for: electrical machinery (10.1 percent); machinery (28.1 percent); chemicals (24.2 percent); manufactured goods (20.1 percent); transport equipment (11.7 percent%) and others (16.7 percent). Among major trading partners, purchases went up mainly from China (16.1 percent); the US (34.3 percent);, Australia (35.2 percent); the EU (10 percent); Saudi Arabia (18.4 percent) and South Korea (22 percent).

Exports increased 8.2 percent year-on-year to JPY 7.24 trillion, missing market expectations of a 9 percent surge and after an upwardly revised 1.3 percent decrease in September. Higher shipments were recorded for: transport equipment (9 percent); machinery (7.7 percent); electrical machinery (8.2 percent); manufactured goods (9.2 percent); chemicals (13.5 percent) and others (1.4 percent). Among major trading partners, sales rose to China (9 percent); the US (11.6 percent); the EU (7.7 percent); South Korea (1.7 percent); and Taiwan (6.4 percent). 

The trade surplus with the US shrank 11 percent year-on-year to JPY 573.4 billion while the trade gap with China jumped 52.1 percent to JPY 406.2 billion. 

Considering January to October 2018, Japan recorded a trade gap of JPY 401 billion, compared to a surplus of JPY 2.4 trillion in the same period of 2017.





Wednesday November 14 2018
Japan Economy Shrinks 0.3% in Q3
Cabinet Office | Rida | rida@tradingeconomics.com

The Japanese economy contracted 0.3 percent on quarter in the three months to September 2018, following an upwardly revised 0.8 percent growth in the previous period and matching market consensus, a preliminary estimate showed. Number of natural disasters weighed on personal consumption, company investment and exports.

Negative contributions to the GDP growth came from private demand (-0.2 percentage points), of which private consumption (-0.1 percentage points) and change in private inventories (-0.1 percentage points), while business investment was neutral. In addition, public demand substracted 0.1 percentage points off growth and net exports had a negative contribution of 0.1 percentage points.

Private demand declined by 0.2 percent in the September quarter, reversing a growth of 1.1 percent in the previous period, due to a drop in private consumption (-0.1 percent vs 0.7 percent in Q2) and compared to market expectations of a 0.2 percent decrease. In addition, capital expenditure fell unexpectedly by 0.2 percent, following a 3.1 percent growth in the second quarter and missing estimates of a 0.6 percent gain. It was the first decline in capital expenditure since the third quarter of 2016.

Also, public demand dropped 0.2 percent, after a 0.1 percent gain in the preceding quarter. The decline was mainly due to a faster fall in public investment (-1.9 percent vs -0.3 percent), which was the the steepest contraction in a year, while government spending growth was stable at 0.2 percent.

Exports of goods and services plummeted 1.8 percent, reversing a 0.3 percent rise in the second quarter and marking the steepest fall since the second quarter of 2015. Also, imports dropped 1.4 percent, following a growth of 1 percent in the June quarter and marking the biggest drop since the March quarter of 2016.

On an annualized basis, the economy shrank 1.2 percent, worse than market forecasts of a 1 percent contraction and following a 3 percent expansion in the June quarter. The fall in economic activity was driven by a decline in both private and public demand and a negative contribution from net external demand.



Wednesday October 31 2018
BoJ Holds Rates, Lowers Inflation Forecasts
Bank of Japan | Rida | rida@tradingeconomics.com

The Bank of Japan left its key short-term interest rate unchanged at -0.1 percent at its October meeting and kept the target for the 10-year Japanese government bond yield at around zero percent, as widely expected. The central bank also revised down inflation forecasts again, saying that the momentum toward achieving the price stability target of 2 percent is not sufficiently firm despite years of massive monetary easing.

The inflation forecast for the fiscal year ending March 2019 was lowered to 0.9 percent from 1.1 percent previously estimated. Also, the central bank now expects inflation to average 1.4 percent for fiscal 2019 (vs 1.5 percent) and 1.5 percent for fiscal 2020 (vs 1.6 percent).

With regard to the amount of JGBs to be purchased, the Bank will conduct purchases in a flexible manner so that their amount outstanding will increase at an annual pace of about 80 trillion yen. 

The BoJ also determined by an unanimous vote to purchase ETFs and Japan real estate investment trusts (J-REITs) so that their amounts outstanding will increase at an annual paces of about 6 trillion yen and about 90 billion yen, respectively. As for CP and corporate bonds, the Bank will maintain their amounts outstanding at about 2.2 trillion yen and about 3.2 trillion yen, respectively.  

Excerpts from the Outlook for Economic Activity and Prices:

Japan's economy is likely to continue its moderate expansion. In fiscal 2018, domestic demand is likely to follow an uptrend, with a virtuous cycle from income to spending being maintained in both corporate and household sectors, mainly against the background of highly accommodative financial conditions and the underpinnings through government spending. Business fixed investment is likely to continue increasing amid accommodative financial conditions, led mainly by investment intended for domestic capacity expansion in line with the economic expansion, Olympic Games-related investment, and labor-saving investment to address the labor shortage. Private consumption is also expected to follow a moderate increasing trend as emplyment and income situation continues to improve. Public investment is expected to remain at a relatively high level, mainly reflecting Olympic Games-related demand and the supplementary budgets. Exports are expected to continue their moderate increasing trend on the back of the firm growth in overseas economies.

Meanwhile, the year-on-year rate of change in the consumer price index, all items less freah food, has been posiive but has continued to show relatively weak developments compared to the economic expansion and the labor market tightening. Under these circumstances, a rise in medium to long-term inflation expectations has been lagging behind. Nonetheless, with the output gap rmeining positive, firms' stance in expected to gradually shift toward further raising wages and prices and households' tolerance of price rises will increase. 

With regard to the risks balance, risks to both economic activity and prices were skewed to the downside. On the price front, the momentum toward achieving the price stability target of 2 percent is maintained but is not yet suffficiently firm, and developments in prices continue to warrant careful attention. 





Tuesday October 30 2018
Japan Jobless Rate Falls to 4-Month Low
Statistics Japan | Rida | rida@tradingeconomics.com

The unemployment rate in Japan edged down to 2.3 percent in September of 2018 from 2.4 percent in the previous month and slightly below market expectations of 2.4 percent. It was the lowest jobless rate since May. Meanwhile, the jobs-to-applicants ratio inched higher to 1.64 from 1.63 in September and was the the highest since January 1974.

The number of unemployed declined by 70 thousand from a month earlier to 1.6 million in September, while employment increased by 30 thousand to 66.65 million. The labour force declined by 40 thousand to 68.25 million and those detached from the labour force went up 50 thousand to 42.64 million.

Youth unemployment rate, measuring job-seekers between 15 and 24 years old, dropped to 3.4 percent in September from 4.1 percent in the previous month.

A year earlier, the unemployment rate was higher at 2.8 percent.


Friday October 19 2018
Japan Inflation Rate Edges Down to 1.2% YoY
Statistics Japan | Mario | mario@tradingeconomics.com

Japan's annual inflation rate edged down to 1.2 percent in September 2018 from 1.3 percent in the previous month, mainly due to lower prices of food. Still, it is the second-highest figure in the last seven months.

In September, prices of food increased by 1.8 percent from a year earlier, easing from a 2.1 percent rise in the previous month. Cost slowed mainly for meals outside the home (1 percent from 1.1 percent in August); fish & seafood products (1.9 percent from 4.9 percent), of which fresh fish & seafood (0.4 percent from 5.8 percent); dairy products & eggs (3.1 percent from 3.3 percent) and vegetables & seaweeds (8.1 percent from 11.3 percent), of which fresh vegetables (10.4 percent from 15.4 percent).

Additionally, prices went up at a softer pace for culture and recreation (1 percent from 1.6 percent), namely recreational services (1.3 percent from 2.7 percent). On the other hand, cost advanced faster for miscellaneous goods and services (0.2 percent from 0.1 percent) and rebounded for transportation and communication (2.1 percent from 2 percent); fuel, electricity & water (3.7 percent from 3.4 percent) and clothing and footwear (0.1 percent from -0.1 percent). At the same time, inflation was steady for health (1.1 percent, the same as in August) and education (0.5 percent) while it continued to decline for housing (-0.1 percent, the same as in August) and furniture and household utensils (-0.9 percent from -1.1 percent).

The goods index rose 2.1 percent, whereas the services index edged up 0.2 percent.

Core inflation rate, which excludes fresh food, edged up to 1 percent from 0.9 percent in the previous month and in line with expectations. It marked the highest figure since February.

On a monthly basis, consumer prices remained unchanged in September, after a 0.5 percent rise in August and following four straight positive prints. 


Thursday October 18 2018
Japan Trade Surplus Narrows 78.7% YoY in September
Ministry of Finance l Rida | rida@tradingeconomics.com

Japan’s trade surplus fell sharply to JPY 140 billion in September of 201 from JPY 654 billion in the same month a year ago but beating market consensus of a deficit of JPY 50 billion.

Imports increased 7 percent year-on-year to JPY 6.59 trillion in September 2018, much slower than a 15.3 percent growth in August and way below market estimates of 13.7 percent. Purchases of mineral fuels surged 42.1 percent, boosted by petroleum (37.9 percent), LNG (42.6 percent) and coal (24.5 percent); and those of electrical machinery went up 0.7 percent, driven by telephony, telegraphy (14.7 percent). In addition, imports increased for machinery (0.2 percent); chemicals (4.2 percent), namely organic chemicals (25.5 percent); and manufactured goods (2.8 percent), of which iron & steel products (9.7 percent); non-ferrous metals (3.9 percent) and manufacture of metals (3.9 percent). In contrast, imports of others fell 5 percent, of which scientific & optical instruments (-5.8 percent); and those of transport equipment declined 2.1 percent. By country, purchases rose from China (4.2 percent); South Korea (8.8 percent); the US (3.1 percent); the EU (0.7 percent); Australia (30.5 percent); and the Middle East (35.4 pct), mainly Saudi Arabia (26.7 percent) and United Arab Emirates (47 percent). In contrast, imports dropped from Taiwan (-4.2 percent); Thailand (-1.8 percent); Malaysia (-4.6 percent); Indonesia (-3.8 percent) and Western Europe (-0.8 percent), namely Germany (-7.1 percent) and Italy (-4.4 percent).

Exports unexpectedly fell 1.2 percent year-on-year to JPY 6.73 trillion, missing consensus of a 1.9 pct rise and after a 6.6 pct gain in August. It was the first decline in outbound shipments in 22 months, amid trade war fears and after a series of natural disasters. Sales of transport equipment dropped 2.1 percent, driven by motor vehicles (-4.7 percent) and aircraft (-1.5 percent); and those of others fell 7.4 percent, due to scientific & optical instruments (-3.3 percent). Also, exports were down for electrical machinery (-2.4 percent), of which semiconductors (-1.7 percent) and IC (-3.4 percent); and manufactured goods (-2.2 percent), namely non-ferrous metals (-7.1 percent) and manufacture of metals (-2.3 percent). On the other hand, exports of machinery grew 0.1 percent, led by power generating machines (3.9 percent) and semiconductor machinery (9.6 percent); and those of chemicals rose 3.4 percent, of which organic chemicals (4.2 percent). By country, sales declined to China (-1.7 percent); South Korea (-4.6 percent); the US (-0.2 percent); Western Europe (-9.4 percent), mainly Germany (-0.5 percent) and the UK (-10.8 percent); the EU countries (-4.1 percent); the Middle East (-5.3 pct), particularly Saudi Arabia (-4.9 percent); and Australia (-8.1 percent).

Considering January to September 2018, Japan recorded a trade surplus of JPY 66 billion, far lower than a surplus of JPY 1.6 trillion in the same period the preceding year. 


Friday September 28 2018
Japan Jobless Rate Below Forecasts in August
Statistics Japan | Rida | rida@tradingeconomics.com

The unemployment rate in Japan edged down to 2.4 percent in August of 2018 from 2.5 percent in the previous month and slightly below market expectations of 2.5 percent. Meanwhile, the jobs-to-applicants ratio stood at 1.63, the same as in July and the highest since January 1974.

The number of unemployed declined by 50 thousand from a month earlier to 1.67 million in August, while employment increased by 260 thousand to 66.62 million. The labour force rose by 220 thousand to 68.29 million and those detached from the labour force went down 240 thousand to 42.59 million.

Youth unemployment rate, measuring job-seekers between 15 and 24 years old, rose to 4.1 percent in August from 3.8 percent in the previous month.

A year earlier, the unemployment rate was higher at 2.8 percent.