Japan: GDP to have turned negative – Standard Chartered


Japan is scheduled to release preliminary Q4 GDP data on 17 February, trade data for January and core machine orders for December on 19 February and CPI inflation for January and the All Industry Activity Index for December on 21 February. Economists at Standard Chartered Bank share their forecast.

Key quotes

“We expect growth to have turned negative (-0.9% q/q) on a seasonally adjusted basis in Q4, reversing from four consecutive quarters of positive growth. (...) We expect growth to have dropped 3.5% on an annualised basis.” 

“We expect the trade deficit to have widened to JPY 1,674bn from JPY 154.6bn as the decline in imports was likely far lower than in exports.”

“Headline inflation likely eased to 0.7% y/y from 0.8% y/y in December as oil prices eased in January after having increased in December. We think weak domestic consumption after the tax hike weighed on CPI inflation. Core CPI inflation likely stayed at the same level as December, at 0.9%. The All Industry Activity index – a key measure of Japan’s overall levels of production activity in the industrial sector – likely rose 1.2% m/m in December on expectations of a better external environment.”