The Japanese economy contracted in the third quarter due to covid disruptions, a sign that it will be a long struggle to raise interest rates.
- Annualized GDP -3.6% vs -3.1% expected (first estimate was -3.0%)
- Private consumption -1.3% vs -1.1% prelim
- External demand 0.0% vs + 0.1% prelim
- Inflation deflator vs -1.1% preliminary
- Capex -2.3% vs -3.9% expected
It’s not a big list of data, but at least there were better investment numbers. There are indications that private consumption rebounded in October / November, but omicron will add a new reason to stay home.
Nikkei futures are up 1.0% today and the yen’s reaction to this data has been minimal.