Japan: First Quarter GPD:

 https://mainichi.jp/english/articles/20210518/p2g/00m/0na/028000c

Article:

TOKYO (Kyodo) -- Japan's economy in the January-March period contracted an annualized real 5.1 percent from the previous quarter, the first shrinkage in three quarters, as a second state of emergency over the coronavirus pandemic dented consumption, government data showed Tuesday.

The decrease in real gross domestic product, the total value of goods and services produced in the country adjusted for inflation, corresponds to a 1.3 percent contraction on a seasonally adjusted quarterly basis, according to the preliminary data released by the Cabinet Office.

The data also showed that GDP in fiscal 2020 through March decreased a real 4.6 percent from a year ago, down for the second straight year. It is the largest annual contraction on record since data began to be compiled in fiscal 1955.

Ideas:

Its not a surprise that Japan's GDP shrank in Q1, as the emergency measures asked citizens to refrain from going to places and restaurants and bars to close early.

While there might have been a contraction in the GPD, it appeared, from sources in Japan, that people were still out and about, but maybe not as before the pandemic.

For example, when my sources wanted to go to a Starbucks, they said all of the Starbucks in the Yokohama are were full and there were no seats.

And for example, as Landmark Tower, a shopping mall area, whenever they wanted to go to H&M clothes store, the store was not letting everyone in. Customers had to wait outside as H&M limited the number of customers into the store.

But this is a good to think about. Even though there was  4.6 percent decrease in GDP doesn't mean everything has shut down or that there is not any economic activity taking place.

There might been a 4.6 percent decrease but there was still a lot of economic activity taking place.

Article:

The previous record contraction was a 3.6 percent shrinkage in fiscal 2008 logged in the wake of the global financial crisis.

Facing a resurgence of virus infections since November, the government declared its second state of emergency in early January for the Tokyo metropolitan area, and expanded it to 11 out of Japan's 47 prefectures within a week. It was fully lifted in late March.

With requests for people to stay at home, and restaurants and bars to shorten operating hours to curb the virus spread, the measure led to a sharp drop of 1.4 percent in private consumption, which accounts for more than half of GDP in the world's third-largest economy, from October to December.

Ideas:

Yes, a 1.4 percent decline in private consumption or consumer spending is never good, but again it must be remembered, that the whole Japanese economy has not shut down. 

As stated above, from sources in Yokohama, the Yokohama station area was always full, the Starbucks were always full, and the Landmark Tower mall was always full of customers.

While there might have been as many consumers/customers as before the pandemic, there were still a lot of customers/consumers moving around, some maybe shopping and buying and some maybe just to be out and about.

Another point maybe is, as has been seen globally, people can only stay inside for so long. After that they will find ways to get out and about. Maybe not spending as much as before but they want to be out and doing things.

Maybe they aren't going to restaurants at night, like before, but they are out and about during the day.

Article:

Looking ahead, some analysts predict Japan will continue to see a contraction in the current April-June period, as another emergency issued late last month now covers Tokyo and eight prefectures amid the spread of more contagious virus variants, with the country lagging behind other major economies in its vaccine rollout.

After marking the record sharpest GDP drop in 2020's second quarter due to the nation's first virus emergency from April to May, the Japanese economy enjoyed a strong recovery until the October-December quarter as the gradual resumption of economic activity lifted consumption and exports.

Ideas:

Unfortunately the new virus variants are not good. But most likely its not going to keep everyone from going out and doing things.

For example, every time I see the YouTube related to the Tokyo Shibuya scramble crossing, it seems like everyone in Tokyo is out and about.

While they might be going to some important places or work, most are probably just out with their friends doing things including shopping or eating lunch etc.

At some point in Japan and globally people begin to just get used to idea of there being a virus but they still want to be out.

And as people read and hear more citizens are getting vaccinated that might be enough of an incentive for more people to go out and do things they did before the pandemic.

Of course the problem with that is maybe some people will let their guard down and not keep the safe procedures that are needed during the pandemic.

Article:

The latest quarterly GDP decline was worse than the average projection of an annualized 4.61 percent shrinkage by private-sector economists.

In nominal terms, or unadjusted for price changes, the economy shrank 1.6 percent, or an annualized 6.3 percent, in the reporting quarter, and 4.0 percent in fiscal 2020.

Revised GDP data for the reporting quarter and fiscal year is scheduled to be released on June 8.

Ideas:

Yes, again those above figures are not good and it clearly shows a decrease in economic activity for the period mentioned.

And just a numbers or numbers doesn't give the full picture of what is going on.

For example how many businesses went under, how many are just surviving. What sectors of industries are doing good and what sectors are not doing so good.

But from previous reports we know that the manufacturing industry including exports has improved a lot the past year.

While the services sector including hotels and the tourism industry has not done too well the past year.

But it must be remembered again, despite 1.6 decrease, it is not the entire economy, meaning the economy has not stopped. There is still a lot of economic activity taking place.

A decrease of 1.6 percent is never good, but there are always positives and negatives even when there is a 1.6 percent decline.

Have a nice day and be safe!