Despite all the hype of a global synchronous recovery, Japan’s Q1 Real GDP tumbled 0.6% QoQ (on an annualized basis) – the worst drop since Q4 2015 – and well below expectations.
Under the hood it’s just as ugly…
- Nominal GDP dropped 0.4% QoQ (vs expectations of a 0.1% gain)
- Business Spending dropped 0.1% QoQ (vs expectations of a 0.4% rise)
- Private Consumption was unchanged QoQ
And after 8 straight quarters of improvement – no matter how modest – Japan’s economy shrank again in Q1…(and the previous quarter got revised sharply lower)
Of course, the great news is that this gives Kuroda and Abe ever more excuses to repress ever more financial instruments and monetize ever more debt for just a little bit longer.
If you look carefully you will see USDJPY reacting to this dismal number…
As Bloomberg’s Mark Cranfield remarked: “The jokes about the BOJ never being able to exit QE might not be as funny to Japanese policy makers after this. “
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