Japan’s Q2 GDP is out this morning and as foreshadowed last week it is weakening fast. From Bloomie:
Sept. 10 (Bloomberg) — Japan’s economy expanded in the second quarter at half the pace the government initially estimated, underscoring the risk of a contraction as Europe’s debt crisis caps exports. Gross domestic product grew an annualized 0.7 percent in the three months through June, the Cabinet Office said in Tokyo today, less than a preliminary calculation of 1.4 percent. The median forecast of 26 economists surveyed by Bloomberg News was for a revised 1 percent gain. The current-account surplus fell 41 percent from a year earlier to 625.4 billion yen ($8 billion) in July, a finance ministry report showed. Gridlock in parliament may limit fiscal stimulus just as Japan’s expansion is restrained by weakness in global demand, strength in the yen, and the winding down of car-purchase subsidies. A slowdown in Asia may further curtail exports and add to pressure for monetary easing after Chinese data yesterday suggested the region’s biggest economy is losing steam. “Europe’s debt crisis and the yen’s strength restrained companies from spending in the second quarter,” said Takashi Shiono, an economist at Credit Suisse Group AG in Tokyo. “Japan’s economy will probably contract in the third quarter as the boost from the government’s car subsidy program wanes and the downward pressure from weak external demand materializes.” The Nikkei 225 Stock Average fell 0.3 percent as of 9:26 a.m. local time after a 2.2 percent surge on Sept. 7.
