Japan Week Ahead: MOF Quarterly Business Survey to Provide Clues to Supply-Side Capex, Inventories in Revised Q2 GDP
--Consumption Appears to Have Made Resilient but Lackluster Start to Q3
(MaceNews) – Here are the key Japanese economic events for the coming week.
- Monday, Sept. 1
0850 JST (2350 GMT/1950 EDT Thursday, Aug) The Ministry of Finance releases the Financial Statements Statistics of Corporations by Industry for the April-June quarter key to calculating revisions to Q2 GDP due Sept. 8. The survey covers a wide range of topics from sales and profits to capital investment and inventories.
In the preliminary April-June GDP released on Aug. 15, Japan’s rickety economy recorded a higher-than-expected 0.3% rise on quarter, or an annualized 1.0%, for the fifth straight quarterly economic growth, recovering from three consecutive quarters of contraction through January-March 2024. External demand turned out to be stronger than forecast with a combination of modest export growth and weak imports reflecting sluggish domestic demand.
The Q2 GDP growth followed a slight 0.1% rise q/q (+0.6% annualized) in January-March, which was revised up from the economy’s first contraction in four quarters with a slight 0.04% dip (-0.2% annualized).
- Tuesday, Sept. 2
1030 JST (0130 GMT the same day/2130 EDT Monday, Sept. 1) Bank of Japan Deputy Governor Ryozo Himino delivers a speech to business leaders in the eastern region of Hokkaido, northern Japan, on the latest economic conditions and the bank’s policy stance ahead of the board’s next policy-setting meeting on Sept. 18-19.
- Tuesday, Sept. 2
1400 JST (0500 GMT/0100 EDT the same day) Himino, a former government regulator who was commissioner of the Financial Services Agency from 2020 to 2021, holds a news conference in eastern Hokkaido. His five-year term ends on March 19, 2028.
- Friday, Sept. 5
0830 JST (2350 GMT/1930 EDT Thursday, Sept. 4) The Ministry of Internal Affairs and Communications releases July average household spending.
Mace News median forecasts: +1.9% y/y (range: +0.5% to +2.9%) vs. June +1.3%; +1.2% m/m (range: -0.3% to +2.1%) vs. June -5.2%
Japan's real household spending is forecast to have risen 1.9% on the year in July, led by continued post-pandemic eating out and a general recovery trend in auto purchases after last year’s Toyota group output suspension over safety check scandals. It would follow a weaker-than-expected 1.3% rise in June, a solid 4.7% gain in May and a 0.1% slip in April.
On the month, real average expenditures by households with two or more people are expected to post a seasonally adjusted 1.2% rise after plunging 5.2% in June, rebounding 4.6% in May and slipping 1.8% in April.
The government’s call on consumers to buy or repair air conditioners before the peak of heat waves had prompted early purchase of all-weather heat pumps even before June, which is expected to continue weighing on household spending on durable goods in July.
In June, the meager increase in overall household spending was driven by vehicle purchases and home maintenance/repairs – both volatile factors – and demand for computers run by the latest Windows operating system.
It was partly offset by declines in foodstuffs, whose first drop in three months was caused by rising prices of meat after skyrocketing fresh vegetable prices had calmed. Hard hit by inflation, households also spent less on non-essential items including gift money in line with simplified weddings and funerals during the pandemic.
The annual inflation rate has eased slightly, thanks to government energy subsidies, but elevated processed food prices in the aftermath of protracted domestic rice supply shortages are keeping it just under 3%, above the Bank of Japan’s 2% long-run price stability target.
- Friday, Sept. 5
1400 JST (0500 GMT) BOJ releases supply-side Consumption Activity Index for July, which has a close correlation to revised GDP data. The index (excluding inbound tourism spending) rose 0.9% on the month in June and was nearly flat (+0.1%) in April-June vs. the January-March quarter.