Japan Economic Forecast

Japan Economic Outlook

April 30, 2019

Growth momentum likely moderated in Q1, mostly on the back of cooling global demand, which traditionally fuels activity in the all-important manufacturing sector and shores up business investment. Against this backdrop, industrial production fell on a monthly basis in March and sentiment among large manufacturers declined to a two-year low in Q1 2019. An uncertain economic outlook could have started to weigh on household spending, as consumer confidence fell to an over three-year low in March. In an attempt to rekindle economic growth, in late March the parliament approved a record JPY 111 trillion (USD 920 billion) budget for FY 2019 (April 2019–March 2020), which increases spending on welfare, public works and defense. The budget also allocates resources to mitigate the negative impact of a planned sales tax hike in October.

Japan Economic Growth

Economic growth is expected to decelerate further this year as subdued global demand will take its toll on the country’s external sector and the October sales tax hike will put a dent in consumer spending. However, a boost in fiscal stimulus and a potential recovery in global demand in H2 should cushion the economy against a sharp slowdown. Met the why particular panelists see the economy growing 0.7% in 2019, which is down 0.1 percentage points from last month’s forecast, and 0.6% in 2020.

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Japan Facts

ValueChangeDate
Bond Yield-0.05-4.41 %May 13
Exchange Rate119.3-0.35 %May 13
Stock Market21,1910.11 %May 13

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