Wednesday, September 9, 2015

Japan: Economy on recovery mode, FY15-17 growth forecasts retained - Nomura

FXStreet (Delhi) – Research Team at Nomura, suggests that after the Japanese Apr–Jun GDP growth rate was revised upwards in second preliminary estimates, they expect the economy to get back on recovery track from Jul–Sep and retains the outlook for real GDP growth in FY15–17.

Key Quotes

“The second set of preliminary GDP estimates showed a q-q annualized growth rate of real GDP of -1.2% for Apr–Jun 2015, an upward revision over the -1.6% figure in the first set of preliminary estimates.”

“While the improvement in Apr–Jun GDP growth from the first to the second set of preliminary estimates should be a positive for FY15 real GDP growth, some of the recent ramp-up in inventories will likely be drawn down from Jul–Sep.”

“On that basis, we forecast FY15 real GDP growth of +1.2%, unchanged from the release of the first preliminary estimates on 17 August (we also retain our CY15 forecast of +0.8%). We similarly retain our FY16 and FY17 forecasts of +1.9% and +0.0%, respectively.”

“Generally speaking, the Japanese economy has been improving since the start of the Jul–Sep quarter. Consumer spending and real exports were in positive m-m territory in July, and sales at major department stores also continued to register positive m-m growth in August (seasonally adjusted by Nomura). In view of this, we retain our view that Japan’s economy will get back on a recovery track from Jul–Sep.”
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