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Yahoo
9 hours ago
- Business
- Yahoo
Japan's Q1 GDP contraction narrows on consumption improvement, revised figure shows
By Satoshi Sugiyama TOKYO (Reuters) -Japan's economy contracted in the January-March quarter at a slower pace than initially estimated, government data showed on Monday, with consumption figures revised upwards at a time when uncertainty surrounding U.S. tariffs is clouding the outlook. Gross domestic product shrank an annualised 0.2% in the three months through March 31, showed revised data from the Cabinet Office, rather than 0.7% announced on May 16 which matched economists' median forecast. Versus the previous quarter, the revision translates as flat in price-adjusted terms compared with an initially estimated 0.2% contraction. The revision does little to allay analyst concern that economic growth was losing momentum even before U.S. President Donald Trump implemented his so-called reciprocal tariffs on April 2. "It wasn't a revision that changed our view on the overall economy," said economist Uichiro Nozaki at Nomura Securities. Private consumption, which accounts for more than half of Japan's economy, grew 0.1%, versus flat in the initial reading. The capital expenditure component of GDP, a barometer of private demand-led strength, expanded 1.1% in the first quarter, revised from 1.4%. Economists had estimated 1.3%. An upward revision in private inventory contributed to reducing the degree of contraction in the overall figure, the government said. External demand, or exports minus imports, knocked 0.8 percentage point off growth, as in the initial reading. Conversely, domestic demand contributed 0.8 percentage point. Japan faces a 24% U.S. tariff from July unless it can negotiate a lower rate. With automobile-related companies comprising Japan's biggest industry, the government is also seeking an exemption for Japan's automakers from a 25% tariff. "In terms of the April-June quarter and beyond, there are a number of concerns, such as worries about exports and weak domestic demand," said economist Kazutaka Maeda at Meiji Yasuda Research Institute. "It is unclear how the tariff negotiations will turn out, but given the scale of the automotive industry, it will be difficult for the U.S. to back down easily, meaning the talks will be quite difficult." Policymakers and analysts are concerned that trade tension unleashed by U.S. tariffs may complicate the Bank of Japan's efforts to normalise monetary policy. The central bank is set to hold a two-day policy meeting early next week. Monday's revised data is not likely to have much influence on the meeting outcome, said Nomura's Nozaki. The BOJ is more concerned about tariff negotiations and their impact on exports and the overall economy once they are concluded. "For the BOJ, the basic approach to assessing the economy will be to monitor both the immediate data and the status of negotiations" to make policy decisions, Nozaki said. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNA
11 hours ago
- Business
- CNA
Japan's Q1 GDP contraction narrows on consumption improvement, revised figure shows
TOKYO :Japan's economy contracted in the January-March quarter at a slower pace than initially estimated, government data showed on Monday, with consumption figures revised upwards even as uncertainty on U.S. tariffs clouds the outlook. Gross domestic product shrank an annualised 0.2 per cent in the three months to March, the Cabinet Office's revised data showed, slower than the 0.7 per cent contraction in the initial estimate and economists' median forecast. The revised quarter-on-quarter number translates as flat in price-adjusted terms, compared with a 0.2 per cent shrinkage issued on May 16. Monday's revised data reinforced analysts' concern that the economy was losing steam even before U.S. President Donald Trump's so-called reciprocal tariffs in April 2. Private consumption, which accounts for more than half of the Japanese economy, inched up 0.1 per cent, versus flat in the preliminary reading. The capital expenditure component of GDP, a barometer of private demand-led strength, rose 1.1 per cent in the first quarter, revised down from 1.4 per cent in the initial estimate. Economists had estimated a 1.3 per cent rise. External demand, or exports minus imports, knocked 0.8 per centage point off growth, the same as the initial reading. On the other hand, domestic demand contributed 0.8 per centage point. Japan faces a 24 per cent U.S. tariff starting in July unless it can negotiate a lower rate. It is also scrambling to find ways to persuade Washington to exempt its automakers from 25 per cent tariffs on automobiles, Japan's biggest industry. Policymakers and analysts are concerned global trade tension unleashed by U.S. tariffs may complicate the Bank of Japan's efforts to normalise monetary policy. The BOJ is set to hold a two-day policy meeting early next week.
Reuters
11 hours ago
- Business
- Reuters
Japan's Q1 GDP contraction narrows on consumption improvement, revised figure shows
TOKYO, June 9 (Reuters) - Japan's economy contracted in the January-March quarter at a slower pace than initially estimated, government data showed on Monday, with consumption figures revised upwards even as uncertainty on U.S. tariffs clouds the outlook. Gross domestic product shrank an annualised 0.2% in the three months to March, the Cabinet Office's revised data showed, slower than the 0.7% contraction in the initial estimate and economists' median forecast. The revised quarter-on-quarter number translates as flat in price-adjusted terms, compared with a 0.2% shrinkage issued on May 16. Monday's revised data reinforced analysts' concern that the economy was losing steam even before U.S. President Donald Trump's so-called reciprocal tariffs in April 2. Private consumption, which accounts for more than half of the Japanese economy, inched up 0.1%, versus flat in the preliminary reading. The capital expenditure component of GDP, a barometer of private demand-led strength, rose 1.1% in the first quarter, revised down from 1.4% in the initial estimate. Economists had estimated a 1.3% rise. External demand, or exports minus imports, knocked 0.8 percentage point off growth, the same as the initial reading. On the other hand, domestic demand contributed 0.8 percentage point. Japan faces a 24% U.S. tariff starting in July unless it can negotiate a lower rate. It is also scrambling to find ways to persuade Washington to exempt its automakers from 25% tariffs on automobiles, Japan's biggest industry. Policymakers and analysts are concerned global trade tension unleashed by U.S. tariffs may complicate the Bank of Japan's efforts to normalise monetary policy. The BOJ is set to hold a two-day policy meeting early next week.
NHK
16-05-2025
- Business
- NHK
Japan's economy contracts for the first time in four quarters
Japan's economy shrank for the first time in four quarters in the January-to-March period. Private consumption was virtually unchanged for the first three months of the year. The Cabinet Office released preliminary gross domestic product figures for the first three months of this year on Friday. They show the economy contracted by an annualized 0.7 percent in real terms compared with the previous quarter. The last time GDP shrank was in the January-March period of 2024 as production suspensions following rigged certification tests among automakers took a toll. Private consumption, which accounts for more than half of Japan's GDP, grew just 0.04 percent due to the impact of higher prices. Corporate capital investment rose 1.4 percent thanks to robust spending on software and semiconductor-related equipment, marking a fourth straight quarter of growth. Exports fell 0.6 percent, while imports climbed 2.9 percent.
