Japan Economic Outlook
December 20, 2018The economy fared worse than initially reported in the third quarter as strong typhoons and a powerful earthquake severely disrupted economic activity. The economy is, however, expected to return to growth in the fourth quarter as supply chains recover from the natural disasters. The manufacturing PMI averaged slightly higher in Q4 than in Q3, while confidence among large manufacturing firms steadied at relatively high levels in the same period. Moreover, the Tankan survey—an economic survey of Japanese businesses conducted by the Bank of Japan (BoJ)—showed that large firms are planning to noticeably increase capital spending in the fiscal year ending in March 2019. On 14 December, the government unveiled a tax reform package for FY 2019 aimed at alleviating the negative consequences of a consumption tax hike scheduled for October 2019. Four days later, the government presented the budget for FY 2019, which will top JPY 100 trillion (USD 890 billion) for the first time, highlighting the government’s difficulties to rein in public spending
Japan Economic GrowthFundamentals should remain robust next year thanks to ultra-loose monetary policy, a tight labor market and construction works related to the 2020 Tokyo Olympics. A scheduled tax hike and rising trade protectionism will weigh on growth, however. FocusEconomics panelists see the economy growing 1.0% in 2019, which is down 0.1 percentage points from last month’s forecast, and 0.6% in 2020.
Japan Economy Data
5 years of Japan economic forecasts for more than 30 economic indicators.
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|Bond Yield||0.01||-4.41 %||Jan 16|
|Exchange Rate||109.1||-0.35 %||Jan 16|
|Stock Market||20,443||0.40 %||Jan 16|
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Japan Economic News
January 18, 2019
The core consumer price index fell 0.1% in month-on-month seasonally-adjusted terms in December, contrasting November’s flat reading. Core inflation fell from November’s 0.9% to 0.7% in December, the lowest reading in seven months.
January 18, 2019
Industrial production fell 1.0% on a month-on-month and seasonally-adjusted basis in November (previously reported: -1.1% month-on-month), contrasting October’s 2.9% expansion. On an annual basis, industrial output rose 1.5% in November, following the 4.2% increase logged in October.
January 16, 2019
Core machinery orders, a leading indicator for capital spending over a three- to six-month period, stalled in November, suggesting that firms may trim capital expenditure in the coming months.
January 8, 2019
Consumer sentiment fell from 42.9 in November to 42.7 in December, marking the lowest reading since December 2016.
December 21, 2018
The core consumer price index was stable in month-on-month seasonally-adjusted terms in November, down from October’s 0.2% increase. Core inflation inched down to 0.9% in November compared to October’s 1.0%, missing analysts’ expectations of 1.0%.