Japan: Recession!

November 17th, 2014
in News, econ_news, syndication

Econintersect:  Japan has entered its second recession in three years, its fourth in the last six years and its fifth of the 21st century.  GDP contracted by 0.4% in the third breaking-news-130px7quarter (-1.6% annual rate), following a decline of 1.9% in the preceding quarter (-7.3% annual rate).  Reuters had reported an expectation for a gain of 0.5% (2.1% annual rate).  The Tokyo stock market reacted with a big sell-off, the Nikkei 225 Index down 3% at last report.  It is considered likely that there will be a "snap" election called which could cost Prime Minister Shinzo Abe some support in parliament.  Some suggest that Abe may actually have a stronger hand to be more aggressively with fiscal easing because of the setback.  That will depend on how much support his party loses in the elections.

Follow up:

The following three graphics from Trading Economics (two annotated by Econintersect) show three time-period views of japan's GDP data. The latest two quarters of contraction are the first two following the increase of Japan's consumption tax from 5% to 8% on 01 April this year.  Econintersect suggests that one can make strong monetary expansion moves but take the expansion away with ill-advised fiscal policy.  See GEI News report on that conflict from July 2013.

japan-gdp-growth-3Q-2014

japan-gdp-growth-2000-2014-annotated

Looking at annual data (calendar years) Japan experienced two+ years of expansion after reaching recovery from the 14-year depression (1996-2010) but has been contracting again 2014.  Only a strong fourth quarter can avoid at least a hiatus in the expansion started in 2011.  Some analysts are expecting a stronger fourth quarter, but are these the same ones who expected the third to be positive?

japan-gdp-1990-2014-annotated

Sources:
















Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.












 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved