Nonetheless the reading is up on November's 10, and if you look at the chart there has been a steady rebound since September's "horrible" zero. Since the index is claimed to reflect growth three months forward it does not seem to have been performing too badly last year, contracting somewhat in the February to April period before the Q2 GDP contraction, and then was well up in June and July, anticipating the growth recovery in Q3. So if September's reading is anything to go by, Q4 may well surprise on the downside. The rebound suggests that Japan GDP will continue to be weak in Q1 2008, but that the brake won't be being slammed on so hard as it was towards the end of 2007.
The Q4 GDP report is expected to show that net exports accounted for most of Japan's growth for the second consecutive quarter, with housing and deomestic consumption remaining weak. We will all know soon enough since the Cabinet Office will release the preliminary GDP report on Feb. 14 at 8:50 a.m. in Tokyo.
