Japan Real Time Charts and Data

Edward Hugh is only able to update this blog from time to time, but he does run a lively Twitter account with plenty of Japan related comment. He also maintains a collection of constantly updated Japan data charts with short updates on a Storify dedicated page Is Japan Once More Back in Deflation?

Monday, September 03, 2007

Investment In Plant and Equipment Q2 2007

Corporate investment in Japan declined in the second quarter of 2007 following a sharp fall in spending in the predominantly domestically focused non-manufacturing sector. According to data released by the Ministry of Finance in Tokyo today, capital spending sank 4.9 percent in the three months ended June 30 after advancing 13.6 percent in the first quarter. Here's the chart.

We can also see that this was the lowest reading since Q2 2005, and gives us some indication of one of the factors responsible for slow Q2 GDP growth, although it does seem that there is some possibility that the Q2 data may now need to be revised downwards. The big question, of course, is what is happening during Q3. But do note this quote in Bloomberg from Hiroaki Muto - senior economist at Sumitomo Mitsui Asset Management in Tokyo - ``We can't rule out the possibility that the economy shrank last quarter, though such a dip would be temporary. "

So in fact, the longest Japanese expansion in recent history may have already ended.


The report may hinder the Bank of Japan's case that the economy is strong enough for it to raise the key overnight call rate in two weeks. Companies may pare investment even more in the coming months if the U.S. housing crisis curbs demand in Japan's largest export market.

``The U.S. housing recession is a risk factor and may slow foreign demand,'' said Naoki Iizuka, senior economist at Mizuho Securities Co. in Tokyo. ``It is too early to conclude that capital spending will be a problem for the Japanese economy,'' he said, adding that a change to the sample used by the finance ministry may have distorted the reading.