Japan Was Likely Already in New Recession When Quake Hit, GDP Contracting Hard
Revised data now shows that the world's third-largest economy was already contracting sharply during the final quarter of last year, and was only very soft, at best, when the nightmare earthquake/tsunami/nuclear disaster hit in March.
iMarketNews.com
Japan Econ Set For 3rd Straight Qtrly Fall on Quake Impact
TOKYO (MNI) - The Japanese economy is now poised for a third consecutive contraction in the current quarter, as both the public and private sectors are struggling to repair quake-ravaged supply chain networks in northeastern Japan, analysts said.
The economy contracted 0.9% quarter-on-quarter in the January-March quarter, worsening from the downwardly revised 0.8% drop for the October-December quarter (from -0.3%), the Cabinet Office said on Thursday.
The larger-than-expected contraction for the second consecutive quarter was due to sluggish capital investment and private consumption, as well as a drop in net exports, in the aftermath of the March 11 earthquake and tsunami, the government said.
Gross domestic product dropped at an annualized pace of 3.7% in the first quarter, down from a revised -3.0% annualized drop in the fourth quarter (revised from -1.3% annualized)...
"Given the depressed consumer sentiment, private consumption is highly likely to keep falling in the April-June quarter," said Junko Nishioka, chief economist at RBS Securities, a Japanese unit of Royal Bank of Scotland.
Japan's seasonally adjusted Consumer Confidence Survey index tumbled to a two-year low as the March 11 earthquake dashed prospects for income growth, general economic well-being and job security, according to recent data from the Cabinet Office.
The closely watched index slumped to 33.1 in April from 38.6 in March, hitting the lowest level since April 2009, when it stood at 32.0.
As consumer confidence deteriorated, new vehicle sales in Japan tumbled at a record pace in April, according to data released by the Japan Automobile Dealers Association.
New vehicle sales plunged 51.0% from a year earlier to 108,824 last month, the eighth straight month of a year-on-year decline, following a 37.0% drop in March.
The previous record decline was marked in May 1974, when sales plunged 45.1% following the outbreak of the first oil crisis...