(Bloomberg) — Japan’s economy shrank in the three months through September, as the historic slide in the yen inflated its import bill and a resurgence of Covid-19 cases cooled spending.
Gross domestic product contracted at an annualized pace of 1.2% in the third quarter, slipping into reverse for the first time since last year, the Cabinet Office reported Tuesday. Economists had expected an expansion of 1.2%.
The slowdown reflects Japan’s still long path toward a solid recovery from the pandemic, with further risks clouding the outlook.
The plunge in the yen amplified the country’s already soaring import bill, weighing on net trade. Japan acted in late September to prop up the currency by intervening in markets for the first time in 24 years. The government continued to step into markets in October to rein in sharp slides in the currency largely driven by monetary policy divergence between Japan and the US.
Japan was also hit by another virus wave in the summer, with the number of daily new cases hitting 200,000 in August. The country’s worst surge in cases helped cool consumer spending. While the government didn’t bring back Covid-related restrictions this time, the resurgence of infections led some people to refrain from going out.
Like many of its global peers, Japan has also begun to suffer from accelerating inflation, driven by the weak yen, soaring energy prices and import costs. In September, nationwide inflation surpassed 3% for the first time in over three decades, excluding the impact from tax hikes.
Real wages, however, have been declining for six months since April, eating into consumers’ purchasing power.
To alleviate the impact on households and businesses, Prime Minister Fumio Kishida last month proposed an economic stimulus package that includes aid to reduce energy costs and cash handouts for childcare. His cabinet has approved an extra budget of 29.1 trillion yen ($199 billion) to fund these measures.
What Bloomberg Economics Says…
“Looking ahead, we expect GDP growth to accelerate in 4Q. A fiscal stimulus package that includes domestic travel subsidies, together with an increase in inbound tourism on the back of relaxed border restrictions, will likely support the economy. Higher inflation and weaker external demand remain downside risks.”
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
