Arab Today, arab today japan economys two quarters contraction a blow for abenomics
Last Updated : GMT 21:15:51
Arab Today, arab today
Arab Today, arab today

Japan economy's two quarters contraction a blow for Abenomics

Arab Today, arab today

Arab Today, arab today Japan economy's two quarters contraction a blow for Abenomics

Weak consumption and slow exports
Tokyo - AFP

Japan's economy contracted 0.4 percent in the April-June quarter, official data showed Monday, underscoring how Tokyo's "Abenomics" growth programme has yet to gain traction.

Weak domestic consumption and slow exports weighed on the world's third largest economy, which shrank an annualised 1.6 percent, after posting growth in the previous two quarters, according to the Cabinet Office.

Still, the data came in slightly better than the market's expectations for a fall of 0.5 percent, or a 1.8 percent annualised drop.

Private consumption, which accounts for about 60 percent of Japan's GDP, fell 0.8 percent, as exports dropped 4.4 percent.

"The sharp plunge from the previous quarter's surprise growth was partly due to disappointing demand for Japanese products in the US, Chinese and other resource-exporting markets," SMBC Nikko Securities said in a commentary.

"Sluggish wage growth and bad weather drove down consumption at home," it added.

The downturn follows a stronger-than-expected expansion in the first quarter driven by a pickup in capital spending, but as more tepid second-quarter data rolled in some economists warned that the recovery would be short-lived.

An inventory buildup at Japanese firms was taking a toll on industrial production, analysts had warned.

Japan's revised 1.1 percent expansion in January-March was sharply up from an initial estimate of 0.6 percent growth.

The upbeat data had offered some good news for Prime Minister Shinzo Abe's more than two-year-old policy blitz, dubbed Abenomics, aimed at kickstarting anaemic growth and conquering years of deflation.

The programme called for big government spending, massive central bank monetary easing and reforms to a highly regulated economy. The pace of reforms, particularly shaking up a protected agricultural sector, has lagged, however.

Household spending has struggled to recover following a sales tax rise last year, as the Bank of Japan struggles to push up prices, partly weighed by tumbling oil prices.

- China concern -

The drop has forced BoJ chief Haruhiko Kuroda to push back a timeline for hitting a 2.0 percent inflation target -- a cornerstone of Abenomics -- although he insists that healthy price rises are around the corner.

Earlier this month, Kuroda said he would consider expanding the bank's record 80 trillion yen ($640 billion) annual asset-buying scheme -- similar to the US Federal Reserve's quantitative easing -- if weak oil prices keep holding back near-zero inflation.

In July, Japan's central bank cut its annual growth and inflation forecasts for the fiscal year to March 2016, but held off further monetary easing that many analysts expect will come later this year.

The BoJ now expects Japan's economy to expand 1.7 percent in the fiscal year while inflation would come in at 0.7 percent.

That was down from an earlier estimate of 2.0 percent and 0.8 percent, respectively.

Despite wage rises at some big firms and a tight labour market, convincing people to splash out on consumer goods has been a struggle after last year's levy rise, aimed at helping pay down a massive national debt.

The higher taxes hammered consumer spending and pushed the economy into a brief recession. Japan limped out of the red in the last three months of 2014.

Despite a recovery in the US, the slowdown in China, a major market for Japanese exporters, has raised a red flag.

Following a month-long rout on Chinese stock markets, authorities devalued the yuan several times last week, roiling global equity markets and sparking fears of a currency war in which countries compete to boost exports by cutting the value of their currency.

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*

Arab Today, arab today japan economys two quarters contraction a blow for abenomics Arab Today, arab today japan economys two quarters contraction a blow for abenomics

 



Arab Today, arab today
Arab Today, arab today Saudis await visitors but will they come?

GMT 11:54 2017 Thursday ,23 February

Saudis await visitors but will they come?
Arab Today, arab today Sarah Belamesh designs antiques of "ceramic"

GMT 19:45 2017 Monday ,20 February

Sarah Belamesh designs antiques of "ceramic"
Arab Today, arab today Blind sheikh buried in Egypt

GMT 06:32 2017 Thursday ,23 February

Blind sheikh buried in Egypt
Arab Today, arab today Media host Mona Iraqi stresses her show's success

GMT 15:32 2017 Wednesday ,22 February

Media host Mona Iraqi stresses her show's success
View News in Arabic - Business: اقتصاد دولي
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today To hold social dialogue over secondary school

GMT 07:43 2017 Wednesday ,22 February

To hold social dialogue over secondary school
Arab Today, arab today UK appoints 1st Scotland Yard chief in 188 years

GMT 05:14 2017 Thursday ,23 February

UK appoints 1st Scotland Yard chief in 188 years
Arab Today, arab today Ex-yoga missionary unleashes rage

GMT 12:16 2017 Thursday ,23 February

Ex-yoga missionary unleashes rage
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Tesla back into red but revenue grows

GMT 07:27 2017 Thursday ,23 February

Tesla back into red but revenue grows
Arab Today, arab today Nissan enhances sales in most markets

GMT 14:08 2017 Monday ,20 February

Nissan enhances sales in most markets
Arab Today, arab today Salma Rashid happy for 'A Whisper of Love'

GMT 05:19 2017 Tuesday ,21 February

Salma Rashid happy for 'A Whisper of Love'
Arab Today, arab today Milan laughs while Rome cries

GMT 10:28 2017 Wednesday ,22 February

Milan laughs while Rome cries

GMT 06:41 2017 Monday ,20 February

Janat pleased for issuing 'Good Morning'

GMT 12:35 2017 Tuesday ,21 February

63-Year-Old Woman Delivers Baby

GMT 14:29 2017 Monday ,20 February

Prepares to present her new collection

GMT 15:53 2017 Tuesday ,21 February

Small ponds have outsized impact

GMT 23:29 2017 Thursday ,16 February

Home built on sand castles-style costs $8m

GMT 07:51 2017 Wednesday ,22 February

Mom's immune system accepts babies

GMT 17:46 2017 Saturday ,18 February

Tourist guide reveals methods of tourist attractions

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 19:10 2017 Friday ,17 February

Hats, scarves add beauty to women
Arab Today, arab today
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
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday