Japan economy shrinks in second quarter in setback for 'Abenomics'

[JSCh]

Japan economy shrinks in second quarter in setback for 'Abenomics'
TOKYO | By Leika Kihara and Tetsushi Kajimoto
Reuters/Thomas Peter

Japan's economy shrank at an annualized pace of 1.6 percent in April-June as exports slumped and consumers cut back spending, adding pressure on Prime Minister Shinzo Abe to step up his policy drive to lift the economy out of decades of deflation.

China's economic slowdown and its impact on its Asian neighbors has also heightened the chance that any rebound in growth in July-September will be modest, analysts say.

The gloomy data adds to signs that Japan's economy is at a standstill and heightens pressure on policymakers to offer additional monetary or fiscal stimulus later this year.

The contraction in gross domestic product (GDP) compared with a median market forecast of a 1.9 percent fall and followed a revised expansion of 4.5 percent in the first quarter, Cabinet Office data showed on Monday.

"If weak private consumption persists, that would be a further blow to Abe's administration, which is facing falling support rates ahead of next year's Upper House election," said Hiromichi Shirakawa, chief Japan economist at Credit Suisse.

Con't->Japan economy shrinks in second quarter in setback for 'Abenomics'| Reuters

 

[EAsian]

Made in Japan has been replaced by made in China and made in korea fastly.I am afraid that the pain Japanese people have suffered in these 2 decades will continue in the coming decades.

 

[TaiShang]

Japan economy shrinks 1.6% in Q2 in setback for 'Abenomics'

People select kitchenware at a shopping mall in Tokyo on July 31, 2015. (AFP PHOTO / Toru YAMANAKA)

TOKYO - Japan's economy shrank at an annualised pace of 1.6 percent in April-June as exports slumped and consumers cut back spending, a bad omen for Prime Minister Shinzo Abe's policy drive to lift the economy out of decades of deflation.

China's economic slowdown and its impact on its Asian neighbours have also heightened the chance that any rebound in growth in July-September will be modest, analysts say.

The gloomy data adds to signs that Japan's economy is at a standstill and may rekindle market expectations that the Bank of Japan will expand monetary stimulus later this year.

The contraction in gross domestic product (GDP) compared with a median market forecast of a 1.9 percent fall and followed a revised expansion of 4.5 percent in the first quarter, Cabinet Office data showed on Monday.

"Private consumption declined a lot, capital spending was poor and inventories piled up. The situation seemed far worse than the GDP figures showed," said Takeshi Minami, chief economist at Norinchukin Research Institute.

Private consumption, which makes up roughly 60 percent of economic activity, fell 0.8 percent in April-June from the previous quarter, double the pace expected by analysts.

It was the first decline since April-June 2014, when an increase in the sales tax hike hit consumption, as households spent less on air conditioners, clothing and personal computers, said a government official briefing reporters on the data.

Overseas demand shaved 0.3 percentage point off growth as exports to Asia and the United States slumped, the data showed.

Economics Minister Akira Amari put on a brave face, blaming the contraction on temporary factors like bad weather that kept consumers at home.

"Income conditions continue to improve as a trend so private consumption is expected to recover gradually," he said in a statement after the data release.

Many analysts say weak second-quarter GDP data alone won't trigger an immediate monetary easing.

But economists have already sharply cut their growth forecasts for the current fiscal year and expect the BOJ to do so too when it reviews its long-term projections in October.

"If the economy in July-September turns out to be weak, there is a chance the BOJ will implement more easing," said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.

Japan's economy suffered a mild recession last year as consumption took a hit from a sales tax hike in April 2014. Growth rebounded this year, only to slow again as exports and consumption remained disappointingly weak.

***

I guess the remaining option for Japan is to decouple from US' militarization efforts in East Asia, stop tryting to rally regional countries against China, solve the political issues with China and aim for bringing the annual trade to over 500billion USD by the end of this decade.

 

[Economic superpower]

Bad relations with China is destroying the Japanese economy.

 

[Economic superpower]

Made in Japan has been replaced by made in China and made in korea fastly.I am afraid that the pain Japanese people have suffered in these 2 decades will continue in the coming decades.

Japan's problems won't just continue, it will get worse. Their economy is a complete disaster and their corporations are going bankrupt.

Japan is finished.

 

[Jlaw]

part of the euqation that made Japan strong was its technical know-how back in the 70s-80s. At the time, few countries can produce cars and civilian electronics as well and as efficiently as Japan.
Now China, Korea, Taiwan can out produce Japanese with equal quality in electronics.

 

[Bussard Ramjet]

For the people here almost gleeing.

Japan is a developed country, with per capita income of 40k dollars, with a demographic set up that doesn't promote development.

No doubt, China and Korea are catching up. But, today still, at the very high end of many industries there are present many very respected Japanese firms.

So there is still some time for China to catch up to Japan, in terms of the sophistication of the economy and skill base of people.

 

[Keel]

For the people here almost gleeing.

You and people in your camp have been winning a lottery everyday upon the negative news on our "stock market" " RMB devaluation" and the perennial curse of "China collapse"

There is nothing wrong for our folks expressing their view points based on their observation

Are you Japanese? Why are you so concerned about the Japanese while so much hate against China?
We didnt commit war crimes on india while india had your notorious WW2 judge who defied justice

What is there left for india to earn credit points from Japan?

 

[Jlaw]

You and people in your camp have been winning a lottery everyday upon the negative news on our "stock market" " RMB devaluation" and the perennial curse of "China collapse"

There is nothing wrong for our folks expressing their view points based on their observation

Are you Japanese? Why are you so concerned about the Japanese while so much hate against China?
We didnt commit war crimes on india while india had your notorious WW2 judge who defied justice

What is there left for india to earn credit points from Japan?

Just another Indian troll.

 

[Tom99]

The Japanese shrinking economy not only affect the people of Japan but also countries in NE asia, like China and South Korea. These 3 said countries trades heavily with each other and when ones goes down it will pull others down with it too. This is the reason why these three NEasian countries must work together to improve their economy when possible. There are other countries would like to see Japan, SK and China argue and fight each rather than cooperating together. Divide and Conquer, they said.

 

[hans]

Be noted that China, Korea have very similar industry like Japan..
Automotive, electronics, etc..
Once China and Korea replace Japan products in the market, there will be not only an increase in China and Korea side, but also a deduction of Japan side.
Around 10 years ago, Japan`s average salary is 10 times of Chinese salary in USD..
But now it is only three times of China salary.
China increase while Japan salary actually decrease in USD.

For the people here almost gleeing.
Japan is a developed country, with per capita income of 40k dollars, with a demographic set up that doesn't promote development.

No doubt, China and Korea are catching up. But, today still, at the very high end of many industries there are present many very respected Japanese firms.

So there is still some time for China to catch up to Japan, in terms of the sophistication of the economy and skill base of people.

 

[senheiser]

Abe is the worst president of Japan

Be noted that China, Korea have very similar industry like Japan..
Automotive, electronics, etc..
Once China and Korea replace Japan products in the market, there will be not only an increase in China and Korea side, but also a deduction of Japan side.
Around 10 years ago, Japan`s average salary is 10 times of Chinese salary in USD..
But now it is only three times of China salary.
China increase while Japan salary actually decrease in USD.

But Japan is still very creative for making Content like Manga, Videogames, Movies, Anime etc. Its very sad how their president is bowing down to americans thinking Japan is a western country.

 

[Economic superpower]

Abe is the worst president of Japan


But Japan is still very creative for making Content like Manga, Videogames, Movies, Anime etc. Its very sad how their president is bowing down to americans thinking Japan is a western country.

Japanese have always loved being a slave to a foreign power. They willingly do it. Other countries fight to be independent, but Japs prefer a subservient role.

But Japan is weakening with each passing year. Every year China gets stronger, Japan gets weaker. Because Japan knows its no longer the number 1 power in Asia, its decided to go rogue. That's why they chose a fascist thug as their leader to help Japan go rogue.

 

[EAsian]

The Japanese shrinking economy not only affect the people of Japan but also countries in NE asia, like China and South Korea. These 3 said countries trades heavily with each other and when ones goes down it will pull others down with it too. This is the reason why these three NEasian countries must work together to improve their economy when possible. There are other countries would like to see Japan, SK and China argue and fight each rather than cooperating together. Divide and Conquer, they said.

I don't agree with you at all.Competitions are always good.And there is no friendship between China，Japan and Korea.

 

[hans]

Abe cannot change the situation of too much competition from China and Korea
Also these industries cannot save Japan economy..
Automotive, electronics, etc are key industries to Japan economy
But all these are facing competition and make it lower profit..

Abe is the worst president of Japan
But Japan is still very creative for making Content like Manga, Videogames, Movies, Anime etc. Its very sad how their president is bowing down to americans thinking Japan is a western country.