Japan Trims Third-Quarter Economic Growth Figures

Source: Cabinet Office

Japan’s third-quarter economic growth was revised lower to reflect the impact of the COVID-19 pandemic and the global chip shortage during the period. EWJ is down 0.12%.

• The third-quarter contraction was revised to 3.6%, reflecting a steeper decline than the 3.0% the Cabinet Office reported earlier.
• The latest figure is worse than economists’ expected 3.1% decline and brings the quarter-on-quarter decline to 0.9% versus the earlier reported 0.8% contraction.
• The revision comes as a resurgence in COVID-19 cases impacted private consumption, and the chip shortage hit business sentiment.
• Consumption declined as inclement weather conditions deterred shoppers from going out, while car and electronic production fell due to the chip shortage.
• Public investment contracted by 2.0% from the earlier reported 1.5% decline, while capital spending contracted by 2.3% versus the earlier reported 3.8% decline.
• Itochu Economic Research Institute Chief Economist Atsushi Takeda said the data indicates that economic conditions stagnated in the quarter due to the pandemic.