Global| Feb 18 2004Japan GDP Surges 1.7% in Q4
Summary
Japanese GDP jumped 1.7% in Q4, equal to 7.0% at an annual rate. Consensus forecasts had called for 4.3% annualized growth. Business investment led the surge, up 5.1% (quarterly rate), contributing almost half of the quarter's total [...]
Japanese GDP jumped 1.7% in Q4, equal to 7.0% at an annual rate. Consensus forecasts had called for 4.3% annualized growth.
Business investment led the surge, up 5.1% (quarterly rate), contributing almost half of the quarter's total GDP gain. Exports were also strong, expanding by 4.2%.
Prices in Japan continue to fall sharply, down 2.6% year-over-year. Export prices declined 6.2% and those for nonresidential investment by 6.0% (price deflators are not seasonally adjusted). The strong yen accounts for at least some of the price deflation. Additionally, expectations are widespread that the strong yen will eventually hurt exports, weakening the economy anew. Thus, investors and commentators greeted today's vigorous GDP results with skepticism. The trend shown in the table below suggests that recent economic strength may be a lagged response to the yen weakness that prevailed until the middle of last year. However, as can be seen in the graph, over longer spans the relationship between the currency and growth appears not to be particularly reliable.
| Percent Change in Japan GDP | 4th Qtr 2003 | 3rd Qtr 2003 | 2nd Qtr 2003 | Y/Y | 2003 | 2002 | 2001 |
|---|---|---|---|---|---|---|---|
| GDP in 1995 Prices | 1.7 | 0.6 | 0.8 | 3.6 | 2.7 | -0.4 | 0.4 |
| Private Consumption* | 0.9 | 0.5 | 0.3 | 2.1 | 0.9 | 0.6 | 1.6 |
| Private Nonresidential Investment | 5.1 | -0.2 | 4.4 | 12.4 | 8.8 | -7.1 | 1.1 |
| Private Residential Investment | -1.0 | 2.9 | -0.1 | 1.0 | -0.6 | -4.1 | -5.4 |
| Exports: Goods/Services | 4.2 | 3.2 | 1.6 | 10.9 | 9.9 | 8.0 | -6.1 |
| Imports: Goods/Services | 1.4 | 2.6 | -1.2 | 3.7 | 4.7 | 2.0 | 0.1 |
| GDP in Current Prices | 0.7 | 0.3 | 0.6 | 1.2 | 0.2 | -1.4 | -1.0 |
| Deflator (Year/Year) | -2.6 | -2.1 | -2.0 | -2.6 | -2.4 | -1.2 | -1.5 |
| Real Effective Exchange Rate (BkJapan-Averages) | 5.8 | 0.2 | -0.6 | 5.5 | 0.5 | -5.5 | -10.9 |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
More Economy in Brief
