The recent strength of yen likely to effect the last quarter Japan GDP. The 4Q Japan’s GDP due in early Asian session which is the first economic data in this brand new week. The Cabinet Office will release preliminary Q4 GDP data for the October-December quarter at 0850 JST Monday (2350 GMT Sunday).
Q4 GDP forecasts by 10 economists ranged from -0.6% to +0.2% on quarter, or an annualized -2.5% to +0.7% reported by MNInews.
“Private-sector demand, mainly consumer spending, dropped sharply in the fourth quarter. The positive contribution of net exports seems to have continued but it is not strong enough to offset weak private demand,” said Hidenobu Tokuda, senior economist at Mizuho Research Institute.
“Exports were mostly flat while imports were down on weak domestic demand, which led to a slight gain in net exports,” Saito said.
The GDP report will show Japan’s economy is in a very dire situation,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.
“There is no driving force for the economy and that’s unlikely to stop this quarter.” Shinke, who ranked as the top Japan forecaster for the latest Bloomberg GDP survey, predicts a big contraction of 3 percent in the fourth quarter.
MNInews reported, In Q3, the economy expanded 0.3% on quarter, or an annualized +1.0%, led by capex and consumption, after shrinking 0.1%, or an annualized 0.5%, in April-June.
In Q4, net exports appear to have posted the second straight quarterly rise while private consumption and business investment likely marked the first drop in two quarters.
“GDP data swings but it’s clear Japan’s economy is struggling to pick up the pace,” said Masamichi Adachi, a senior economist at JPMorgan. “What’s worse is the recent market turmoil is making it increasingly likely that economic conditions will stay lackluster this quarter.”
“The BoJ’s recent negative rate announcement which was indirectly intended to weaken the yen highlights that Japan still has a preference for a weaker yen which is currently being challenged,” Bank of Tokyo-Mitsubishi UFJ (BTMU) currency analyst Lee Hardman said in a note on Thursday. “It is increasing the likelihood of further BoJ monetary easing at their next meeting in mid-March when rates could be cut deeper into negative territory and asset purchases increased.”