2023-08-15 10:17:07
Headwinds looming
Trade data showed that exports remained resilient during the second quarter, driven by auto shipments to the US and Europe. It is unclear if this increase will continue, as economists see headwinds looming in the US, China and Europe.
The increased number of tourist arrivals, whose contribution is also calculated in the net export component of GDP, provided a significant economic boost following the authorities lifted border restrictions at the end of April.
The number of foreign visitors has recovered to more than 70 percent of pre-pandemic levels as in June, according to the Japan National Tourism Organization.
Tourism data for Japan in July is expected to be released tomorrow, Wednesday.
Tourist spending is expected to provide a bigger boost in August, following China last week lifted its ban on group travel. Chinese tourists accounted for more than a third of the total expenditures, which exceeded 1 trillion yen in 2019.
In June, Japan achieved a trade surplus for the first time in two years
“When compared to the January-March period, the marked improvement in consumption driven by increased activity has weakened,” said Harumi Taguchi, an economist at S&P Global Market Intelligence. “Increasingly higher prices are driving consumers to Postponing the purchase of goods.
Capital spending by firms was flat, once morest expectations for a 0.4% increase, while private consumption (household sector), which accounts for more than 50% of GDP, fell abruptly by 0.5%.
GDP details:
Private consumption declined by 0.5%, compared to estimates of 0%. Corporate spending (investment sector) stood at 0%, compared to an estimate of 0.4%. Net exports contributed by 1.8 percentage points, compared to estimates of 0.9 percentage points. Private stocks declined by 0.2 percentage points, compared to expectations of -0.3 points.
These signs of domestic weakness may dampen market speculation that the Bank of Japan (BOJ) will use the strong growth rate as an excuse to discuss whether to consider moving away from massive stimulus, while Governor Kazuo Ueda pointed to uncertainty in overseas markets, in comments he made. made recently.
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