Ja­pan's GDP re­vised up to an­nu­al­ized 1.1pc con­trac­tion

The Pak Banker - - MARKETS/SPORTS -

The na­tion's econ­omy shrank less than ear­lier es­ti­mated dur­ing Oc­to­berDe­cem­ber last year, mainly re­flect­ing an up­ward re­vi­sion to pri­vate in­ven­tory growth, the govern­ment said Tues­day.

The coun­try's gross do­mes­tic prod­uct con­tracted a re­vised 0.3 per­cent from the pre­vi­ous quar­ter in price-ad­justed real terms for an an­nu­al­ized drop of 1.1 per­cent, the Cab­i­net Of­fice said in a re­vised GDP re­port.

The fig­ures for the third quar­ter of fis­cal 2015 were bet­ter than the fall of 0.4 per­cent and an an­nu­al­ized 1.4 per­cent shown in the govern­ment agency's pre­lim­i­nary re­port re­leased last month.

Still, the Ja­panese econ­omy con­tracted for the first time in two quar­ters due to a slump in con­sumer spend­ing.

The weak­ness poses a chal­lenge to Prime Min­is­ter Shinzo Abe, who is try­ing to re­flate the econ­omy with his Abe­nomics eco­nomic pol­icy.

In nom­i­nal terms, the econ­omy shrank 0.2 per­cent, or an an­nu­al­ized 0.9 per­cent, also bet­ter than the pre­lim­i­nary read­ings of 0.3 per­cent and 1.2 per­cent falls. "Some weak­ness can be seen in con­sump­tion," Eco­nomic and Fis­cal Pol­icy Min­is­ter Nobuteru Ishi­hara said. How­ever, Ishi­hara stressed that "there is no change in my view that the Ja­panese econ­omy's fun­da­men­tals re­main fa­vor­able."

Mean­while, Koya Miya­mae, se­nior econ­o­mist at SMBC Nikko Se­cu­ri­ties Inc., said in a re­search note that he may have to change his view that GDP will ex­pand in Jan­uary-March this year.

In real terms, Oc­to­ber- De­cem­ber cap­i­tal ex­pen­di­tures ex­panded 1.5 per­cent, up from the pre­lim­i­nary 1.4 per­cent rise thanks to in­creased in­vest­ments in the real in­dus­tries.

By con­trast, pri­vate con­sump­tion was re­vised down to a 0.9 per­cent de­crease from a 0.8 per­cent fall. Pub­lic in­vest­ment de­clined 3.4 per­cent, larger than the 2.7 per­cent drop in the pre­lim­i­nary re­port.

The re­vised re­port also showed that a pri­vate-sec­tor in­ven­tory change pushed down the over­all real GDP growth by 0.04 per­cent­age point, smaller than the 0.1-point neg­a­tive con­tri­bu­tion in the pre­lim­i­nary re­port.

Ex­ports fell 0.8 per­cent, bet­ter than 0.9 per­cent, while the fall in im­ports was un­changed at 1.4 per­cent. The pos­i­tive con­tri­bu­tion of ex­ter­nal de­mand, or net ex­ports, to over­all GDP growth was also un­changed at 0.1 point. Do­mes­tic de­mand made a 0.4-point neg­a­tive con­tri­bu­tion, an im­prove­ment from the pre­lim­i­nary neg­a­tive con­tri­bu­tion of 0.5 point.

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