japan economy shrinks during fourth quarter
Last Updated : GMT 06:49:16
Arab Today, arab today
Arab Today, arab today
Last Updated : GMT 06:49:16
Arab Today, arab today

In body blow for 'Abenomics'

Japan economy shrinks during fourth quarter

Arab Today, arab today

Arab Today, arab today Japan economy shrinks during fourth quarter

Weak consumer spending weighed on Japan's economy
Tokyo - Arab Today

 Japan's economy contracted in the last quarter of 2015, official data showed Monday, dealing another blow to Prime Minister Shinzo Abe's faltering bid to boost growth.

The figures will fan talk of fresh Bank of Japan measures, after policymakers shocked markets last month with an unprecedented negative interest rate policy -- widely seen as a desperate move to kickstart the world's number three economy.

Weak demand for big-ticket items like cars and home appliances held back the vast economy which shrank 0.4 percent in October-December -- or an annualised 1.4 percent drop.
That was Japan's second quarterly contraction in 2015, although GDP edge up a tepid 0.4 percent for the whole year, underscoring Tokyo's challenge in slaying deflation and cementing a sustained recovery.

Tokyo brushed off the weak numbers, saying that "the fundamentals (of the economy) remain good", but analysts countered that Abe's growth plan was stumbling.

The premier's bid to revive Japan's once-soaring economy, dubbed Abenomics, has also been shaken by a bloodbath on equity markets since the start of the year and a resurgent yen that threatened to dent companies' profits.

"The latest data show that it is difficult to say that the Abe government has achieved of its goal of a 'virtuous cycle' of rising incomes, wages, and investment," said Tobias Harris, political risk analyst at US-based consultancy Teneo.

"Japan has remained too dependent on export-led growth, which has suffered in light of China’s slowdown and the effects it has had on the global economy.
Japan's factory output has suffered as worries persist about global growth, with revised data Monday showing industrial production contracted 1.7 percent in December, worse than a preliminary 1.4 percent drop.

However Tokyo's Nikkei 225 stock index soared more than seven percent Monday, boosted by bargain-buying and a weaker yen following last week's 11 percent drop.

- 'Not carved in stone' -

The yen, which surged four percent last week against the dollar, turned lower Monday on talk about the BoJ unveiling fresh monetary easing measures as well as speculation about Tokyo intervening in currency markets to stem the unit's rise.
The wild volatility on world markets and sharp swings in the yen since the start of 2016 prompted Abe on Friday to hold an emergency meeting with Japan's central bank chief Haruhiko Kuroda.

The BoJ shocked investors by announcing the negative rate policy last month, a plan that aims to prod banks into lending by charging them for storing excess reserves with it.

But as his growth programme wobbles and the BoJ struggles to hit an ambitious two-percent inflation target, Abe must decide whether to follow through with another sales tax hike next year.

The rise is seen as key to containing a spiralling national debt, but it could further dent spending.

"It is not carved in stone, if the real problems are going on he can push it out," said Nicholas Smith, Japan strategist at brokerage CLSA, referring to the planned tax rise.

"With what's going on in the market, this is a temptation."

Abe's growth plan -- big government spending, central bank monetary easing and reforms to the highly regulated economy -- appeared to bear fruit at first.

The yen weakened sharply, which boosted Japanese exporters' profits and sparked a huge stock market rally.

But sustained growth has been elusive and Abe's efforts to overhaul the economy have been widely criticised as half-hearted.

Tokyo will be watching labour talks this spring closely for signs that firms are ready to put more cash into employees' pockets, which would offer hope for a pick-up in consumer spending.

"The government plans to raise the consumption tax in 2017, so we will probably see an increase in spending later this year ahead of the hike," said Taro Saito, senior economist at NLI Research Institute.

"But I don't think we should expect the fundamentals of the Japanese economy to recover easily."
Source :AFP

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

japan economy shrinks during fourth quarter japan economy shrinks during fourth quarter

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

japan economy shrinks during fourth quarter japan economy shrinks during fourth quarter

 



GMT 10:06 2012 Saturday ,28 July

Querrey advances at ATP LA Open

GMT 21:15 2017 Thursday ,01 June

Trump condemns deadly Kabul explosion

GMT 02:15 2017 Thursday ,24 August

Is your country on the Qatar free entry list of 80?

GMT 19:48 2016 Monday ,03 October

Controversial boxing champ Tyson Fury retires

GMT 08:20 2015 Tuesday ,08 December

PC market woes show no sign of easing

GMT 17:27 2017 Tuesday ,25 April

20 Yemeni soldiers killed, injured in explosion

GMT 11:52 2017 Saturday ,30 December

OIC condemns Mar Mina Church attack

GMT 00:03 2017 Saturday ,25 March

Arab Meeting to Examine Anti-Corruption Methods

GMT 13:12 2017 Thursday ,20 April

Deputy premier meets Arab League chief

GMT 14:13 2014 Friday ,10 January

Opel Astra GTC

GMT 18:27 2016 Tuesday ,02 August

Turkish Foreign Minister arrives in Islamabad

GMT 11:27 2016 Tuesday ,13 December

Saudi woman arrested for challenging social norms
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday