Economic growth data from Japan in the January to March 2017 quarter was published yesterday - post is here
GDP growth came in at strongest quarter for a year
- It was the fifth consecutive quarter of expansion (the first time that's happened since 2005/2006)
- For the y/y (1.6%), growth was 0.1% weaker than in Q4
- Note, the Bank of Japan estimates Japan's potential potential growth rate as around 0.5 to 1.0% y/y, so yesterday's was above potential
- Growth was led by private consumption (+0.4% q/q from 0% in Q4); it added 0.2% to GDP (strong spending on durable goods)
- Net exports were strong again, for the third consecutive quarter (the volume of exports rose to its strongest annual rate for two years)
- Exports of goods up, exports of services down
- Import growth rose almost 1.5% q/q (best in six quarters)
- But .. the contribution from net trade to GDP growth was only 0.1%, the weakest in three quarters
- Growth in the housing sector continued
- Government consumption & public investment broadly flat
- Private inventory build added 0.1 % to growth
On inflation:
- Deflator fell 0.8% y/y, weakest in four years
- The domestic demand deflator (this reflects Japan's underlying capacity to generate inflation) was more in line with other recent measures of CPI, rising to 0.1%y/y for its first positive reading in seven quarters ... still not anywhere close to BOJ target though
- Nominal GDP was flat on the quarter, up 0.8% y/y
