Japan's first-quarter economic growth was faster than the government initially reported after figures showed businesses spent more than estimated.
Gross domestic product expanded an annualized 4 percent in the three months ended March 31, the Cabinet Office said today in Tokyo, quicker than the 3.3 percent estimated last month. The median estimate of 22 economists surveyed by Bloomberg News was for 3.8 percent growth.
Figures since the first quarter suggest growth has slowed as rising oil and raw materials costs erode profits. Japan's soaring import bill caused the current account to narrow more than economists estimated in April and producer prices to climb at the fastest pace in 27 years in May, reports showed today.
"The economy's going to have problems from now on,'' said Mamoru Yamazaki, chief Japan economist at RBS Securities Japan Ltd. in Tokyo. "Japan will teeter on the verge of a recession this year because of the rise in oil and material costs along with the U.S. slowdown.''
The yen traded at 107.32 per dollar as of 9:17 a.m. in Tokyo compared with 107.42 before the reports were published.
Japan expanded 1 percent from the fourth quarter, today's figures showed, more than the 0.8 percent reported last month.
Business Spending
Business spending increased 0.2 percent, compared with a 0.9 percent decline initially estimated, reflecting figures published by the Finance Ministry last week that showed companies increased capital spending by 1.3 percent in the quarter. The ministry's report accounts for about 60 percent of the business investment component of revised GDP.
The same survey showed corporate profits fell 17.5 percent from a year earlier, the steepest decline since the most recent recession in 2001. Reports for April showed household spending fell the most in 19 months, factory production dropped and unemployment climbed.
"The economy may already be in a downturn,'' said Kenichi Kawasaki, an economist at Lehman Brothers Inc. in Tokyo. "Falling profits are likely to stifle corporate appetite for capital spending. Exports are likely to start softening.''
The Cabinet Office this week said the world's second- largest economy has probably peaked, and companies including Advantest Corp. and Nissan Motor Co. expect conditions to worsen. The risk of a shrinking economy will keep the Bank of Japan from raising its key interest rate from 0.5 percent until next year, according to economists surveyed.
Advantest, Nissan
Advantest, the world's biggest maker of memory-chip testers, may report lower earnings this fiscal year as chipmakers scale back investment in factories. "Our business is very slow,'' President Toshio Maruyama said last week.
Nissan, Japan's third-largest carmaker, last month forecast the biggest drop in profit in nine years because of a stronger yen and weaker demand in the U.S., its most profitable market.
"Take a look at all the headwinds we're facing in 2008,'' Nissan's Chief Executive Officer Carlos Ghosn said last week. "We're not being pessimistic, we're being prudent.''
All eight Japanese passenger carmakers have said operating profit will fall this fiscal year.
Sales to Asia and commodity-exporting regions such as the Middle East have been keeping the economy afloat as the U.S. slows. Exports, the main driver of Japan's growth in the past three quarters, have expanded each month since November 2003.
"Japan is obviously at risk of a lagged impact from the U.S. hitting Europe and Asia a bit more,'' said Jan Lambregts, head of Asia research at Rabobank International in Hong Kong. ``If that happens you'll get slower growth in the second half of the year, but you'll still get trend growth overall.''
Japan's economy has grown an average of about 2 percent in each year of the current expansion, which began in February 2002.
Gross domestic product expanded an annualized 4 percent in the three months ended March 31, the Cabinet Office said today in Tokyo, quicker than the 3.3 percent estimated last month. The median estimate of 22 economists surveyed by Bloomberg News was for 3.8 percent growth.
Figures since the first quarter suggest growth has slowed as rising oil and raw materials costs erode profits. Japan's soaring import bill caused the current account to narrow more than economists estimated in April and producer prices to climb at the fastest pace in 27 years in May, reports showed today.
"The economy's going to have problems from now on,'' said Mamoru Yamazaki, chief Japan economist at RBS Securities Japan Ltd. in Tokyo. "Japan will teeter on the verge of a recession this year because of the rise in oil and material costs along with the U.S. slowdown.''
The yen traded at 107.32 per dollar as of 9:17 a.m. in Tokyo compared with 107.42 before the reports were published.
Japan expanded 1 percent from the fourth quarter, today's figures showed, more than the 0.8 percent reported last month.
Business Spending
Business spending increased 0.2 percent, compared with a 0.9 percent decline initially estimated, reflecting figures published by the Finance Ministry last week that showed companies increased capital spending by 1.3 percent in the quarter. The ministry's report accounts for about 60 percent of the business investment component of revised GDP.
The same survey showed corporate profits fell 17.5 percent from a year earlier, the steepest decline since the most recent recession in 2001. Reports for April showed household spending fell the most in 19 months, factory production dropped and unemployment climbed.
"The economy may already be in a downturn,'' said Kenichi Kawasaki, an economist at Lehman Brothers Inc. in Tokyo. "Falling profits are likely to stifle corporate appetite for capital spending. Exports are likely to start softening.''
The Cabinet Office this week said the world's second- largest economy has probably peaked, and companies including Advantest Corp. and Nissan Motor Co. expect conditions to worsen. The risk of a shrinking economy will keep the Bank of Japan from raising its key interest rate from 0.5 percent until next year, according to economists surveyed.
Advantest, Nissan
Advantest, the world's biggest maker of memory-chip testers, may report lower earnings this fiscal year as chipmakers scale back investment in factories. "Our business is very slow,'' President Toshio Maruyama said last week.
Nissan, Japan's third-largest carmaker, last month forecast the biggest drop in profit in nine years because of a stronger yen and weaker demand in the U.S., its most profitable market.
"Take a look at all the headwinds we're facing in 2008,'' Nissan's Chief Executive Officer Carlos Ghosn said last week. "We're not being pessimistic, we're being prudent.''
All eight Japanese passenger carmakers have said operating profit will fall this fiscal year.
Sales to Asia and commodity-exporting regions such as the Middle East have been keeping the economy afloat as the U.S. slows. Exports, the main driver of Japan's growth in the past three quarters, have expanded each month since November 2003.
"Japan is obviously at risk of a lagged impact from the U.S. hitting Europe and Asia a bit more,'' said Jan Lambregts, head of Asia research at Rabobank International in Hong Kong. ``If that happens you'll get slower growth in the second half of the year, but you'll still get trend growth overall.''
Japan's economy has grown an average of about 2 percent in each year of the current expansion, which began in February 2002.
Posts
1 comment:
Japans economy is a total complete basket case.
Post a Comment