Japanese Q4 2017 GDP data is due today. This is the second reading after a headline miss on the preliminary (but an encouraging showing on private consumption. The inflation figure, however ... OK, maybe lets not mention inflation)
GDP (seasonally adjusted) for Q4, final, q/q:
- expected is 0.2%, preliminary was 0.1%, prior 0.6%
GDP Annualized (seasonally adjusted) for Q4, final y/y:
- expected is 1.0%, preliminary was 0.5%, prior 2.2%
GDP Nominal (seasonally adjusted) for Q4, final q/q:
- expected is 0.1%, preliminary 0.0%, prior 0.6%
GDP Deflator y/y for Q4, final:
- expected is 0.0%, preliminary 0.0%, prior 0.0%
This is the inflation indicator from GDP. Its not very confidence inspiring for the BOJ. More work to do.
GDP Consumer Spending (aka private Consumption) y/y for Q4,
- expected is 0.5%, preliminary 0.5%, prior -0.6%
GDP Business Spending y/y for Q4,
- expected is 1.3%, preliminary 0.7%, prior 1.0%
Previews of what to expect, via:
Barclays:
- We believe Q4 real GDP growth is likely to be revised slightly upward in the second preliminary data from 0.5% q/q saar in the initial release based on the corporate survey for that period, which factors into the adjustments for capex.
Nomura:
We forecast a small upward revision for GDP overall, again indicating moderate economic expansion.
- forecast that the second preliminary estimate for real GDP growth in Q4 2017 will be 0.7% q-o-q annualized, up from 0.5% in the first set of estimates.
figures for inventory of works in progress and raw materials in the inventory investment category ... dented real GDP growth in the first set of preliminary estimates (real basis quarter- on-quarter contribution of -0.1pp).
- we expect downward revisions for inventory of works in progress and raw materials, although we expect the revisions to be small
In the first preliminary GDP estimates, private-sector capex was up 0.5% q-o-q (nominal basis; 0.7% on a real basis)
- we ... think real capex in the second preliminary GDP estimates will be revised up to 1.2%
Among other demand-side items
- we forecast an upward revision for public investment
Nomura looking ahead to 2018:
- Industrial production and retail sales value data are Japanese economic indicators for January 2018 that have already been released, and we note that the data were generally weak. The major turmoil in global financial markets from the beginning of February may well have also had a negative impact on consumer spending in Japan, and GDP growth in Q1 2018 could be somewhat low. However, we think Japanese real GDP will be solid through summer 2018 at least, driven by exports and capex on support mainly from healthy economic conditions in the US. We note that weak economic indicators for Japan in January could reflect one-time factors, such as unfavorable weather. At present, we see little need to revise our above scenario.
