JAPAN

摘要

Ahead of the forthcoming GDP release, many analysts are pessimistic with regards to the general GDP outlook, with some expecting national accounts data to reveal a quarterly contraction in Q2. Weak household expenditure, combined with falling exports to China, provides genuine cause for concern for Prime Minister Shinzo Abe, who faces rapidly declining approval ratings on the back of controversial military reform proposals. Latest figures reveal that household expenditure tumbled by 2.0% (y-o-y) in June following a 4.8% (y-o-y) increase in May, and that unemployment rose for the first time in five months during the same period, edging up to a seasonally adjusted 3.4%. Despite a small rebound in industrial production, which grew by 0.8% (m-o-m) in June following a 2.1% (m-o-m) contraction in May, July data showed that the service sector Purchasing Managers Index moderated from 51.8 to 51.2. In addition, Japan has recently been warned about its high levels of public debt, with the International Monetary Fund cautioning that the debt could conceivably equate to three times the nation's GDP by 2030 if current government spending patterns continue, and thus recommending a credible medium-term consolidation plan. Our panel is expecting the general government budget deficit to come in at around ¥-28.8tn this fiscal year, decreasing slightly to ¥-26.5tn in FY 16/17.