18 Feb 2015
Japanese growth forecasts lowered, but economy on a steady recovery - Nomura
FXStreet (Barcelona) - Research Analysts at Nomura, lower their FY 14-15 forecast for Japanese growth based on the first set of preliminary GDP estimates for Oct–Dec 2014 and other recently published statistics.
Key Quotes
“With real GDP growth for Oct–Dec 2014 of +2.2% q-q annualized sharply undershooting the market forecast and our own estimate, we have revised down our FY14 real GDP forecast from -0.4% in our last revisions (on 2 February) to -0.8% (for CY14, actual growth was +0.0%, versus our previous estimate of +0.3%).”
“For FY15, we have lowered our growth projection from +2.3% to +2.1% as the above lowers the carryover effect (for CY15, we have revised our projection from +1.7% to +1.3%).”
“For FY16, we have increased our forecast from +1.6% to +1.8% (we have revised our CY16 forecast from +1.6% to +1.7%)."
“Although we have lowered our growth outlook for FY15, we still expect the Japanese economy to achieve comparatively strong growth on support from many factors.”
“Corporate and consumer sentiment started to improve in December 2014 owing to the next consumption tax hike being postponed and crude oil prices falling.”
“Recent statistics such as December core machinery orders and the survey of manufacturers’ production plans for Jan–Feb suggest that the corporate sector is becoming more proactive on capex."
“We also think sustained modest growth in exports as a result of economic recovery in the US and Asia will boost capex growth.”
“Meanwhile, the effects of an improvement in real purchasing power as a result of lower crude oil prices are starting to be seen, and from 2015 H2 we see a likelihood of growth in private-sector consumption gaining momentum on a boost from increases in base pay and bonuses.”
Key Quotes
“With real GDP growth for Oct–Dec 2014 of +2.2% q-q annualized sharply undershooting the market forecast and our own estimate, we have revised down our FY14 real GDP forecast from -0.4% in our last revisions (on 2 February) to -0.8% (for CY14, actual growth was +0.0%, versus our previous estimate of +0.3%).”
“For FY15, we have lowered our growth projection from +2.3% to +2.1% as the above lowers the carryover effect (for CY15, we have revised our projection from +1.7% to +1.3%).”
“For FY16, we have increased our forecast from +1.6% to +1.8% (we have revised our CY16 forecast from +1.6% to +1.7%)."
“Although we have lowered our growth outlook for FY15, we still expect the Japanese economy to achieve comparatively strong growth on support from many factors.”
“Corporate and consumer sentiment started to improve in December 2014 owing to the next consumption tax hike being postponed and crude oil prices falling.”
“Recent statistics such as December core machinery orders and the survey of manufacturers’ production plans for Jan–Feb suggest that the corporate sector is becoming more proactive on capex."
“We also think sustained modest growth in exports as a result of economic recovery in the US and Asia will boost capex growth.”
“Meanwhile, the effects of an improvement in real purchasing power as a result of lower crude oil prices are starting to be seen, and from 2015 H2 we see a likelihood of growth in private-sector consumption gaining momentum on a boost from increases in base pay and bonuses.”