January - March quarter economic growth data from Japan

Coming up at 2350GMT

I posted the consensus expectations earlier:

GDP (seasonally adjusted) for Q1,

  • preliminary, q/q: expected 0.0%, prior 0.4%

GDP Annualized (seasonally adjusted) for Q1,

  • preliminary y/y: expected -0.1%, prior 1.6%

GDP Nominal (seasonally adjusted) for Q1,

  • preliminary q/q: expected 0.1%, prior 0.3%

GDP Deflator y/y for Q1, preliminary:

  • expected 0.3%, prior 0.1%
  • deflator is an inflation indicator

GDP Consumer Spending y/y for Q1,

  • preliminary q/q, expected is 0.0%, prior was 0.5%

GDP Business Spending y/y for Q1,

  • preliminary q/q: expected 0.4%, prior was 1.0%

Previews (bolding mine)

via Nomura:

We estimate Q1 (January-March) real GDP figures will show a decline of 0.6% q-o-q annualized (-0.1% q-o-q), which would be the first such decline since October-December 2015 (nine quarters).

  • We think domestic demand was weak overall in January-March.
  • We expect overseas demand, which has been fuelling real GDP growth, to slow for now.

Based on Ministry of Finance trade statistics and the BOJ's export and import price data, we estimate January-March 2018 real exports grew by 0.3% q-o-q, which is considerably weaker than the 2.5% q-o-q growth in October-December 2017 (adjustments for seasonal factors and prices are by Nomura).

  • Economic conditions overseas appear to have slowed overall in January-March, with PMI indicators in China and Europe falling off from the January peak and the March PMI in the US below February levels. We think these conditions contributed to a slowdown in Japan's real exports.

We estimate real consumer spending fell quarter-on-quarter.

  • The Ministry of Internal Affairs and Communications' Family Income and Expenditure Survey suggested that real consumer spending was strong in January and February, but the Ministry of Economy, Trade & Industry's Current Survey of Commerce showed a large drop of 1.6% q-o-q in January-March for real retail sales (adjustments for prices by Nomura).
  • In addition, the Cabinet Office's Economy Watchers Survey and consumer confidence index both indicated a deterioration in consumer sentiment.
  • We think adverse weather conditions led to sharp price increases for fresh food, depressing consumer sentiment and having a negative impact on consumer spending.

We think real housing investment and real public spending also continued to weigh on real GDP, but that real capex in the private sector remained on a modest growth trajectory.

  • In the BOJ Tankan (March 2018), the outlook for FY17 capex plans (including software but excluding land) remained high, supporting the view that corporate capex appetite was favourable.

We think real GDP growth was negative for the first time in nearly two years, but we see as our main scenario that the drop in real GDP will be limited to January-March 2018. Starting in April-June, we expect expansionist fiscal policies in the US to support US domestic demand, which should underpin the global economy. We expect the Japanese economy to resume growth in April-June, in line with these developments.

Via Daiwa:

preliminary national accounts for Q1

  • estimate a drop in real GDP of 0.1%Q/Q (-0.4%Q/Q annualised).

As well as a drop in private consumption,

  • net exports appear to have very marginally subtracted from GDP growth.
  • Very weak housing starts suggest that another negative contribution to growth can be expected from residential investment.
  • But business capex appears to grown for the sixth successive quarter.

So, whether real GDP avoids its first quarterly contraction since Q415 could depend on developments in public spending and inventories.

we caution that these first estimates are based on incomplete data - especially on capex and inventories - so subsequent revisions could meaningfully alter the picture from whatever is published in the coming week. And even a weak result is likely to be regarded by the BoJ as largely temporary.

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For the yen .... sheesh ... I expect not too much immediate impact, Japanese data tends to not do so .... perhaps the results are already, ummmm, priced in (ifyouknowhatImean)