15 Feb 2016
Japan Q4 GDP misses expectations, further pressure on BoJ to act
Japan Q4 GDP came in at -0.4% q/q vs -0.2% expected, while GDP annualized sood at -1.4% y/y vs -0.8% expected and +1.0% last. As per GDP nominal (seasonally adjusted), it came in at -0.3%% q/q vs -0.1% expected and +0.4% last.
The GDP deflator was 1.5% y/y vs 1.6% expected and 1.8% last, with GDP consumer spending at -0.8% y/y vs -0.6% expected and 0.4% prior. Lastly, GDP business spending came at 1.4% y/y vs -0.2% expected and +0.6% last.
Prior to the publication of the Japanese data, James Smith, Economist at ING, suggested that the Japanese economic contraction in the fourth quarter was driven mainly by a weather-induced fall in consumption.
"Although consumer confidence has been relatively robust, mild weather is likely to have weighed on sales of certain goods (e.g clothing). Going forward, the outlook for consumption looks better, with lower energy prices and a slower pace of food inflation likely to provide a boost", Smith said.
According to James, the disappointing data "will place further pressure on the Bank of Japan to act again. With the Yen appreciating more and more by the day and the prospect of further ECB easing at its next meeting, we think there is an increasingly strong chance that the BoJ will cut rates further at its meeting on March 15th.”
The GDP deflator was 1.5% y/y vs 1.6% expected and 1.8% last, with GDP consumer spending at -0.8% y/y vs -0.6% expected and 0.4% prior. Lastly, GDP business spending came at 1.4% y/y vs -0.2% expected and +0.6% last.
Prior to the publication of the Japanese data, James Smith, Economist at ING, suggested that the Japanese economic contraction in the fourth quarter was driven mainly by a weather-induced fall in consumption.
"Although consumer confidence has been relatively robust, mild weather is likely to have weighed on sales of certain goods (e.g clothing). Going forward, the outlook for consumption looks better, with lower energy prices and a slower pace of food inflation likely to provide a boost", Smith said.
According to James, the disappointing data "will place further pressure on the Bank of Japan to act again. With the Yen appreciating more and more by the day and the prospect of further ECB easing at its next meeting, we think there is an increasingly strong chance that the BoJ will cut rates further at its meeting on March 15th.”