Econintersect: Japan recorded its third quarter of negative GDP growth in a 
row for the fourth quarter of 2012. The decline, 0.1% quarter-over-quarter or 0.4% annualized, was a surprise. The consensus expectation had been for an increase of 0.4% (1.6% annualized). The quarter was dragged down by falling exports and a slump in private investment. Consumption improved from the previous quarter.
The GDP announcement did not phase Japanese markets. From the Financial Times:
Investors took the downbeat GDP data in their stride. The stock market began its afternoon session 0.5 per cent up on the day, with gains led by technology stocks and industrials. The yen held steady at about 93.30 to the dollar, while the benchmark 10-year government bond yield stayed within the range it has occupied for the first two weeks of this month, at 0.76 per cent.
Optimism was generally felt in comments reported in the press. The stimulus programs of new Prime Minister Shinzo Abe are being counted on to boost economic activity on the coming quarters. From Bloomberg:
“These are pre-Abe numbers,” said Takuji Okubo, chief economist at Japan Macro Advisors who formerly worked at Goldman Sachs Group Inc. “He was only prime minister for about the last week of the quarter. We will see a fairly big pick up this year, led by exports recovering on the weaker yen.”
Japan has had three recessions in the last six years. Counting isolated quarters of decline the country has spent 13 of the last 24 quarters in contraction.
Click on graph for larger picture.
The GDP change numbers above are quarter-to-quarter. The annualized rate for the last three quarters is -2.1%. The year-over-year growth is just barely positive at 0.2%.
Sources:
- Real GDP (Japan Cabinet Office, 14 February 2013)
- GDP data reveal Japan mired in recession (Jonathan Soble, Financial Times, 14 February 2013)
- Japan GDP Decline Strengthens Abe’s Case for Stimulus: Economy (Keiko Ujikane, Bloomberg, 14 February 2013))
- Japan GDP Growth Rate (Trading Economics, 14 February 2013)
