Japan economic trends point to slowdown or recession
Subject The macroeconomic outlook for Japan. Significance For the first time in six and a half years, businesses are pessimistic about the economic outlook, according to the results of a Nikkei-Markit survey of manufacturing purchasing managers released today. This comes just days after Japan’s first-quarter 2019 real GDP data surprised forecasters with a solid 2.1% growth over the previous quarter (seasonally adjusted, annual rate). Nominal growth was an even more surprising 3.3%. Impacts Even a recession is unlikely to deter a tax rise; the government would increase the immediate stimulus accompanying the rise. New US tariffs on China will mean lower exports from China to the United States, in turn reducing Chinese demand for Japanese components. Growth of jobs and labour income could boost consumer sentiment eventually, reversing an 18-month slide in confidence and consumption.