Japan enters technical recession in Q3


FXStreet (Bali) - Japan Q3 GDP (preliminary) came at -0.2% QoQ vs -0.1% expected, with the GDP annualized (seasonally adjusted), preliminary for the YoY, was -0.8% vs -0.2% expected and -1.2% last.

GDP Nominal (seasonally adjusted), preliminary q/q: 0.0% vs -0.2% expected and +0.1% last. GDP Deflator YoY, preliminary, came at 2.0% vs 1.7% expected ad 1.5% last. With regards to GDP consumer spending YoY, preliminary, came at +0.5% vs +0.4% expected and -0.7% last. Lastly, the GDP business spending YoY, preliminary QoQ, saw -1.3%.

Robin Harding wrote an interesting piece for the FT pre-data, noting: "Japan keeps entering “recessions” because its population is falling and so the economy has little potential to grow. The Bank of Japan puts trend growth at 0.5 per cent or less, compared with the US Federal Reserve’s estimate of 2 per cent for America."

Harding adds: "In fact, Japan barely needs even a nudge. The average revision to its initial estimates of growth is more than 0.5 percentage points, so the statistics will frequently show recession when the country is actually growing normally, and normal growth when it is actually in recession. Add in some sampling error, plus a bit of unseasonal weather, and a recession every year or two is pretty much guaranteed."

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