Japan Jan.-March GDP contraction revised up to annualized real 0.2%
Ideas
Japan's economy always seems to be in a stagnant mode, as it might grow some for a few quarters and then it will decrease for a quarter.
Consumption or consumer spending has been the weak link in the four GDP links of consumer spending, business investment/spending, government spending and then exports-imports.
You would think that the exports of Japanese cars would be the main growth engine for the Japanese economy, but even the export of Japanese cars can't seem to stimulate enough growth in the Japanese economy recently.
Consumer sentiment or household sentiment is a major variable but for Japan it seems to be very low as continued inflation in Japan has all but deflated consumer sentiment except for the buying of just the needed essentials.
The GDP stat while a very important stat related to economic growth is not everything as likely most citizens of a country don't pay attention to it or don't even know what it means.
They do pay attention to their weekly or monthly wage and how much prices are going up or down related to their wage.
It's not that citizens are ignorant or not intelligent it's just they are too busy trying to survive and pay their bills and are not really into economic data.
Private consumption of consumer spending might have grown 0.1 percent but that really is not that much of a real change to get excited about.
Dining out and game software might have increased but again its not enough to say much about the growth of the Japanese economy.
The increase or decrease of inventories in an economy needs to be watched very carefully and too much of an increase or too little of a decrease could be an indication of deeper challenges.
If inventories increase too much or remain above a certain level it could be an indication of demand is not good and or estimation of demand what not correct.
If inventories are too low the opposite could be said that demand it more than expected and or estimation of demand was off.
Capital investments are related to business sentiment and if business sentiment is down or businesses don't think an economy is going to improve in the coming months, then businesses are not going to invest.
Consumer sentiment and business sentiment seem to parallel each other as they increase or decrease in parallel fashion.
Exports used to be the main economic driver of the Japanese economy as the Japanese economy of late hasn't been able to rely on consumer spending or even business investment spending to grow the economy.
So yes, it seems the Japanese economy has lost its luster or maybe has lost it vision for the future as there seems to be no rising star to help grow the Japanese economy.
The US tariffs and Japanese cars really hasn't taken affect that much yet, due to the fact that US inventories of Japanese car has remained somewhat strong with inventories of two or three months worth of cars.
But then again its quit possible US car dealers might have begun to increase the prices of Japanese cars in anticipation of tariffs hitting their stock of cars.
Private consumption or consumer spending has always been the weak link in the Japanese economy and with the continued increase in inflation its not going to improve much.
Corporate investment is always dependent on what businesses see or feel about the economy in the coming months and now with the US tariff situation still unclear business investment is on hold until they know that is going to happen.
Again, the Japanese economy seems to have lost its vision or luster as there doesn't seem to be anything that can drive the Japanese economy like Japanese cars used to do or even semiconductors or even shipbuilding decades ago.
Nominal GDP is just the GDP with inflation included so you can see how much inflation has increased which also shows how much Japanese household consumer purchasing power has decreased from quarter to quarter.
Have a nice day!
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