Exports Help Japan Recovery
Exports Help Japan Recovery

Exports Help Japan Recovery

Exports Help Japan Recovery

Japan’s economy was seen growing for a fourth straight quarter in October-December thanks to stronger exports and a pickup in capital spending, a Reuters poll found on Friday.
Poll respondents saw the economy as likely continuing to recover even though uncertainty over the policies of US President Donald Trump remains deep.
The economy was expected to expand at an annualized rate of 1.1% in the fourth quarter, according to the poll of 20 analysts, after posting growth of 1.3% in the third quarter. Under those circumstances quarter-on-quarter growth would be a 0.3% gain, unchanged from July-September.
“Data will likely confirm the economy is on a moderate recovery led by a pickup in overseas economies,” said Hidenobu Tokuda, senior economist at Mizuho Research Institute.
“Japan’s economic recovery is expected to continue, helped by global economic growth and yen weakness. But downside risks are also high because of uncertainty over protectionism in the US and the political situation in Europe.”
The poll found net exports added 0.3 percentage point to growth in October-December, the same as it contributed in the third quarter. Capital spending was seen growing 0.9% in the last quarter, the poll found, rising for the first time in two quarters.
Private consumption, which accounts for roughly 60% of gross domestic product, was seen flat in the last quarter, after posting modest gains in the previous three quarters. 
The cabinet office will announce the GDP data on Feb. 13.
Japan’s core machinery orders, a leading indicator of capital spending, were seen rising 3.1% in December from the previous month, up for the first time in two months.
The highly volatile data series, regarded as an indicator of capital spending in the next six to nine months, fell 5.1% in November.
From a year ago, core orders, which exclude orders for ships and electrical equipment, were expected to rise 4.6% in December after a 10.4% gain in November.
“Corporate investment sentiment is picking up as a brighter mood is spreading in the global economy—although we cannot dispel risks from US policy,” said Takumi Tsunoda, senior economist at Shinkin Central Bank.
The cabinet office will publish the machinery orders data on Feb. 9.
The poll found Japan was likely to post a current account surplus of 1.29 trillion yen ($11.42 billion) in December, which would be 30 straight surplus month.

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