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Reuters
02-05-2025
- Business
- Reuters
Japan Q1 GDP likely contracted on soft domestic demand, import surge
TOKYO, May 2 (Reuters) - Japan's economy probably contracted for the first time in a year in the first quarter, weighed down by softer domestic demand and imports outperforming exports, a Reuters poll showed, as U.S. President Donald Trump's trade policies dim the growth outlook. Real gross domestic product (GDP) is forecast to have contracted an annualised 0.2% in January-March, according to a median forecast of 15 economists. That would mark a significant cool down from the previous quarter's 2.2% expansion and would be the first contraction since the first quarter last year. On a quarter-on-quarter basis before annualisation, the first-quarter growth rate was projected at -0.1%, compared with growth of 0.6% in the fourth quarter. Private consumption, which accounts for more than half Japan's economic output, likely inched up 0.1% in the first quarter. Analysts say higher food costs are partly the reason consumers are holding back on spending. "The employment and income situation remains favourable, but consumer sentiment is weakening due to factors such as rising prices and increased thriftiness," said Shinichiro Kobayashi, principal economist at Mitsubishi UFJ Research and Consulting. Capital expenditure was seen up 0.8%, attributed to upbeat corporate performances. External demand, or net exports, which means shipments minus imports, likely shaved 0.6 percentage off GDP growth. Exports were expected to have increased for the fourth consecutive quarter as businesses rushed to ship cars overseas before tariffs took effect. However, Kobayashi said imports probably increased more than exports, resulting in a net negative. The GDP data will be announced on May 16 at 8:50 a.m.(2350 GMT on May 15). The Bank of Japan on Thursday decided to keep interest rates steady and cut its growth forecasts, suggesting that uncertainty over U.S. tariffs and the hit to exports could keep policy in a holding pattern for some time. Rising trade tensions from Trump's sweeping tariffs have sent shockwaves through markets and led to a sharp downgrade in the International Monetary Fund's global growth forecasts.
Yahoo
02-05-2025
- Business
- Yahoo
Japan Q1 GDP likely contracted on soft domestic demand, import surge: Reuters poll
By Satoshi Sugiyama TOKYO (Reuters) - Japan's economy probably contracted for the first time in a year in the first quarter, weighed down by softer domestic demand and imports outperforming exports, a Reuters poll showed, as U.S. President Donald Trump's trade policies dim the growth outlook. Real gross domestic product (GDP) is forecast to have contracted an annualised 0.2% in January-March, according to a median forecast of 15 economists. That would mark a significant cool down from the previous quarter's 2.2% expansion and would be the first contraction since the first quarter last year. On a quarter-on-quarter basis before annualisation, the first-quarter growth rate was projected at -0.1%, compared with growth of 0.6% in the fourth quarter. Private consumption, which accounts for more than half Japan's economic output, likely inched up 0.1% in the first quarter. Analysts say higher food costs are partly the reason consumers are holding back on spending. "The employment and income situation remains favourable, but consumer sentiment is weakening due to factors such as rising prices and increased thriftiness," said Shinichiro Kobayashi, principal economist at Mitsubishi UFJ Research and Consulting. Capital expenditure was seen up 0.8%, attributed to upbeat corporate performances. External demand, or net exports, which means shipments minus imports, likely shaved 0.6 percentage off GDP growth. Exports were expected to have increased for the fourth consecutive quarter as businesses rushed to ship cars overseas before tariffs took effect. However, Kobayashi said imports probably increased more than exports, resulting in a net negative. The GDP data will be announced on May 16 at 8:50 a.m.(2350 GMT on May 15). The Bank of Japan on Thursday decided to keep interest rates steady and cut its growth forecasts, suggesting that uncertainty over U.S. tariffs and the hit to exports could keep policy in a holding pattern for some time. Rising trade tensions from Trump's sweeping tariffs have sent shockwaves through markets and led to a sharp downgrade in the International Monetary Fund's global growth forecasts. Sign in to access your portfolio
Japan Times
04-04-2025
- Business
- Japan Times
Japan's household spending drops for first time in three months
Japan's households cut back on spending as inflation remained elevated, in a sign of vulnerability in a key pocket of the economy before sweeping U.S. tariffs hit the country. Household outlays, adjusted for inflation, declined 0.5% in February from a year earlier, the internal affairs ministry reported Friday. The result compared with the median economist estimate of a 0.8% decline. The drop was led by falling outlays on clothes and footwear, housing and food. Consumer spending, accounting for more than a half of the economy, is a key component of gross domestic product that is monitored closely by Bank of Japan Gov. Kazuo Ueda as he mulls the bank's policy path. Inflation has stayed at or above the BOJ's price target for almost three years, sapping spending power, and the latest tariffs from the United States are now expected to weaken the economy further. "We expect personal consumption will be negative compared to the previous quarter in the GDP for the January-March period,' said Shinichiro Kobayashi, chief economist at Mitsubishi UFJ Research and Consulting. "Consumers may not feel a direct impact from U.S. tariffs, but with the stock market falling so much, consumer sentiment is bound to worsen.' The data comes after U.S. President Donald Trump announced across-the-board 24% levies on imports from Japan, which may face a double blow from the measures. The duties will have an immediate impact on the nation's exports. There is also the likely effect on the U.S. economy that could further undermine demand for Japanese goods. Economists say the U.S. will probably see growth slow to an anemic pace even as inflation stays high. Policymakers are watching closely to see if the tariffs trigger a severe downturn in Japan, with some predicting a hit of more than 0.5 percentage point to growth. New 25% car tariffs also took effect Thursday. Until now, data were relatively robust. Japan's overall price growth slowed less than expected to 3.7% in February, driven by food inflation. The price of rice rose 81% from a year earlier, drawing attention from lawmakers concerned about rising household frustration over the cost of living crunch. Base pay for workers increased 3.1% in January, the fastest pace in 32 years although real income dropped. In the latest month, among the few areas that saw increased outlays were utilities, for which expenditures rose 8.7% in real terms versus a year earlier. Prime Minister Shigeru Ishiba's government managed to pass the national budget for this year earlier this week, just before the new fiscal year started. In doing so, he pledged to mitigate the impact from inflation on households. Partly due to elevated costs of living, Ishiba's popularity has sagged. The premier will face a key test in national elections likely to be held in July. The government is considering putting together an extra budget to soften the blow from the U.S. tariffs, the Asahi newspaper reported Friday. Consumer spending, adjusted for inflation, stayed below prepandemic levels last year in Japan's GDP data. Economists expect overall annualized economic growth to be contained at 0.4% this quarter, partly due to lackluster spending momentum, according to a survey last month.
Yahoo
21-02-2025
- Business
- Yahoo
Tokyo inflation likely eased in Feb on govt steps amid inflation pressure: Reuters Poll
TOKYO (Reuters) - Consumer inflation in Tokyo likely slowed down in February as the government reinstated steps to ease the burden from energy bills as higher living costs haunt persistent inflation presser, a Reuters poll showed on Friday. The core consumer price index (CPI) in Tokyo, a leading indicator of nationwide price trends, was seen rising 2.3% year-on-year this month, slowing down from a 2.5% gain in January, the median forecast of 16 economists found. "While food prices continue to rise, the pace of increase in core CPI is expected to slow due to lower electricity and gas prices led by the resumption of government support," said Shunpei Fujita, economist at Mitsubishi UFJ Research and Consulting. Data on Friday showed Japan's nationwide core consumer price index rose 3.2% in January from the previous year to hit a 19-month high, reinforcing expectations the central bank will continue to raise interest rates from still-low levels. For nearly three years, inflation has exceeded the central bank's target of 2%, underlining rising inflationary pressure. In January, the BOJ raised its short-term interest rate to 0.5% from 0.25%, the highest in 17 years, reflecting its conviction that rising wages will keep inflation stable at its 2% target. Governor Kazuo Ueda has signalled his readiness to keep raising rates if price outlook continues to improve. The internal affairs ministry will release Tokyo CPI data at 8:30 a.m. on February 28 (2330 GMT February 27). Japan's industrial output will likely show a 1.2% fall in January from the previous month, down for a third month, reflecting sluggish activity in the global manufacturing sector, according to the poll. Retail sales are expected to have increased 4% in January from a year ago, the strongest pace of gain since February last year, helped by solid auto sales, the poll showed. The trade ministry will publish factory output and retail sales at 8:50 a.m. on February 28 (2350 GMT February 27). Sign in to access your portfolio
Reuters
21-02-2025
- Business
- Reuters
Tokyo inflation likely eased in Feb on govt steps amid inflation pressure
TOKYO, Feb 21 (Reuters) - Consumer inflation in Tokyo likely slowed down in February as the government reinstated steps to ease the burden from energy bills as higher living costs haunt persistent inflation presser, a Reuters poll showed on Friday. The core consumer price index (CPI) in Tokyo, a leading indicator of nationwide price trends, was seen rising 2.3% year-on-year this month, slowing down from a 2.5% gain in January, the median forecast of 16 economists found. "While food prices continue to rise, the pace of increase in core CPI is expected to slow due to lower electricity and gas prices led by the resumption of government support," said Shunpei Fujita, economist at Mitsubishi UFJ Research and Consulting. Data on Friday showed Japan's nationwide core consumer price index rose 3.2% in January from the previous year to hit a 19-month high, reinforcing expectations the central bank will continue to raise interest rates from still-low levels. For nearly three years, inflation has exceeded the central bank's target of 2%, underlining rising inflationary pressure. In January, the BOJ raised its short-term interest rate to 0.5% from 0.25%, the highest in 17 years, reflecting its conviction that rising wages will keep inflation stable at its 2% target. Governor Kazuo Ueda has signalled his readiness to keep raising rates if price outlook continues to improve. The internal affairs ministry will release Tokyo CPI data at 8:30 a.m. on February 28 (2330 GMT February 27). Japan's industrial output will likely show a 1.2% fall in January from the previous month, down for a third month, reflecting sluggish activity in the global manufacturing sector, according to the poll. Retail sales are expected to have increased 4% in January from a year ago, the strongest pace of gain since February last year, helped by solid auto sales, the poll showed. The trade ministry will publish factory output and retail sales at 8:50 a.m. on February 28 (2350 GMT February 27).
