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    Japan's GDP growth slowed to 1.4% in Q2 from 5.5% in Q1, below expectations of 2.3% due to a synchronized global slowdown weighing on exports and industrial production. Nominal GDP contracted by 0.6%, illustrating underlying weakness beyond deflationary effects. With reconstruction demand providing less support, the economy is expected to slow further in the coming quarters and possibly recess by Q4 as the triple threat of slowing growth in China, Europe, and the US takes a greater toll. The Bank of Japan will likely continue aggressive monetary easing.

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    Japan's GDP growth slowed to 1.4% in Q2 from 5.5% in Q1, below expectations of 2.3% due to a synchronized global slowdown weighing on exports and industrial production. Nominal GDP contracted by 0.6%, illustrating underlying weakness beyond deflationary effects. With reconstruction demand providing less support, the economy is expected to slow further in the coming quarters and possibly recess by Q4 as the triple threat of slowing growth in China, Europe, and the US takes a greater toll. The Bank of Japan will likely continue aggressive monetary easing.

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    21 views2 pages

    Data Scan: Japan Q2 GDP

    Uploaded by

    api-162199694
    Japan's GDP growth slowed to 1.4% in Q2 from 5.5% in Q1, below expectations of 2.3% due to a synchronized global slowdown weighing on exports and industrial production. Nominal GDP contracted by 0.6%, illustrating underlying weakness beyond deflationary effects. With reconstruction demand providing less support, the economy is expected to slow further in the coming quarters and possibly recess by Q4 as the triple threat of slowing growth in China, Europe, and the US takes a greater toll. The Bank of Japan will likely continue aggressive monetary easing.

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    Data Scan

    August 13, 2012

    Japan Q2 GDP
    More pronounced slowdown from Q3
    Last: 5.5%saar Expected: 2.3%saar Actual: 1.4%saar Assessment: Synchronized global slowdown weighing on Japan. Still much worse to come.

    Asias major trading economies were weaker than expected in Q2 with IP and exports falling well short of the mark. Japan, not surprisingly, is the latest casualty of that dynamic. The economy grew by 1.4%saar in Q2 (the consensus looked for a 2.3%saar outturn) following an upward revision to Q1 growth which printed firmly at 5.5%saar. Plagued by persistent deflation, which perversely inflates the real GDP arithmetic, the nominal GDP figures are illustrative of weakness. Nominal GDP contracted by 0.6%saar in the quarter. With the tail-end of reconstruction demand still providing a hefty support to growth, all is not well in the land of the setting sun. Given what we call the triple-threat slowdown occurring coincidentally in China, Europe and the US, we believe this current down-cycle in the economy will only become more pronounced as reconstruction demand wanes from Q3. Ultimately, Japan will recess, most probably from Q4. For the BoJ, endless and inescapable easing is the only option.
    The beginning of a more profound slowdown. Japanese IP and GDP with our forecasts for Q3.

    Source: Asia Sentry Advisory Pty Ltd and Bloomberg

    Monday August 13, 2012.

    P a g e |1

    Asia Sentry Advisory Pty Ltd Suite 9, Level 40, Northpoint Tower 100 Miller Street, North Sydney, NSW, 2060, Australia. Ph: +61 2 9931 7820 Fx: +61 2 9931 6888 M: +61 401 548 820 www.asiasentry.com gbmaguire@bloomberg.net glenn@asiasentry.com

    Asia Sentry Advisory Pty Ltd is a boutique economic consultancy established to meet the growing demands of clients seeking greater exposure to the most dynamic economic region in the post-crisis global economy, Asia. Asia Sentry Advisory marries keen judgment with a rigorous model-based approach and a deeply intuitive understanding of Asia that can only come from on-the-ground experience to deliver market out-performing analysis and forecasts.
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