Japan: GDP will see a severe contraction – Westpac

Economists forecast a sharp drop in Q4 GDP for Japan, Westpac Institutional Bank reports.  USD/JPY is trading at 109.805 after rising since the start of the year. 

Key quotes

“Q4 GDP for Japan will be released Monday and if economists are correct we will see a sharp contraction. Current consensus is for a -3.8% SA QQ annualised outcome in Japanese GDP as a result of the increase in consumption tax, the impact of Typhoon Hagibis and ongoing tension over trade developments.” 

“The very sharp rebound that consensus appears to be forecasting for Q1 GDP looks somewhat questionable given the very obvious risks to Q1 growth at the moment. “

“The fact that the Bloomberg Japan  GDP tracker is pointing to a much larger Q4 correction in growth is indeed a warning sign.”