Japan’s economy shrank at a 14.2 percent annual pace in the first quarter — better than first thought, but still the worst quarterly contraction ever for the world’s second-largest economy.
A preliminary report last month had said GDP declined at a 15.2 percent pace.
The slight improvement in the revision released yesterday does nothing to change the reality that Japan’s economy is in its steepest recession since the end of World War II.
Exports have plunged, firms have slashed production and families are spending less. The economy has contracted for four straight quarters, including a revised 13.5 percent in the October-December period.
The first quarter revision stemmed from less severe declines in capital expenditures, the government said. Business investment in factories and equipment fell a revised 8.9 percent from the previous quarter, while consumer spending slipped 1.1 percent.
Japan’s first quarter results are also markedly worse than those of other major economies, including an annualized 5.7 percent contraction in the US.
Still, there is burgeoning room for optimism. Analysts generally agree that Japan’s economy probably hit bottom in the first quarter, and recent signs point to a GDP rebound in the April-June period.
The decline in exports is slowing and industrial production surged in April. Japanese manufacturers in particular are benefiting from expanding demand from China. The impact of government stimulus measures, including cash handouts and consumer incentives to buy “green’’ products, are also starting to give the economy a boost.
Toyota Motor Corp said last month that it is revving up production of its hit Prius to meet better-than-expected demand for the latest version of the world’s top-selling hybrid.
But data released on Wednesday on April machinery orders suggests that overall, companies remain cautious when it comes to spending.
Japan’s core machinery orders, a closely watched indicator of corporate capital spending, fell 5.4 percent from March to ¥688.8 billion (US$7.1 billion). The result marked the lowest value since April 1987 and could mean that a recovery may be some time off.
Japan has been pummeled by the unprecedented collapse in global demand triggered by the US financial crisis. Its exports plummeted a record 26 percent in the first quarter from the fourth quarter, the government said, unchanged from its preliminary report.
Major exporters such as Toyota and Sony Corp have reacted by reducing shifts, suspending factory lines and slashing workers. The jobless rate jumped to 5 percent in April, the highest in six years.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
RSS