Posted on 02/15/2024 12:48:54 PM PST by Ultra Sonic 007
Japan has lost its spot as the world’s third-largest economy to Germany, as the Asian giant unexpectedly slipped into recession.
Once the second-largest economy in the world, Japan reported two consecutive quarters of contraction on Thursday — falling 0.4% on an annualized basis in the fourth quarter after a revised 3.3% contraction in the third quarter. Fourth-quarter GDP sharply missed forecasts for 1.4% growth in a Reuters poll of economists.
A recession is broadly defined as two consecutive quarters of contraction.
On a quarter-on-quarter basis, GDP slipped 0.1%, compared with a 0.3% rise expected in the Reuters poll.
For the whole of 2023, Japan’s nominal GDP grew 5.7% to come in at 591.48 trillion yen, or $4.2 trillion based on the average exchange rate that year, official data showed. Germany, on the other hand, saw its nominal GDP grow 6.3% to reach 4.12 trillion euros, or $4.46 trillion based on last year’s average exchange rate.
Nominal GDP measures the value of output in current dollars, without adjusting for inflation.
In response to the latest GDP release, the benchmark Nikkei 225 climbed 0.65% and briefly surpassed the 38,000 mark in the morning session, as investors saw the weak economic reading as a sign the Bank of Japan could delay its exit from the country’s long-standing negative interest rate policy.
The yen continued to hover around the 150 mark against the dollar, trading at 150.2 as at 1:55 p.m. Tokyo time.
“This dire growth picture makes it even more difficult for the BOJ to tighten policy,” Charu Chanana, head of FX strategy at Saxo Markets, said in a note Feb. 15.
In an earlier note, Chanana said the GDP contraction for the third quarter “weakens the conviction around whether inflation is really driven by a virtuous cycle of increased real income and spending.”
"For the whole of 2023, Japan’s nominal GDP grew 5.7% to come in at 591.48 trillion yen, or $4.2 trillion based on the average exchange rate that year, official data showed."
"Germany on the other hand, saw its nominal GDP grow 6.3% to reach 4.12 trillion euros, or $4.46 trillion based on last year’s average exchange rate."
Japan’s population is almost 50% larger than Germany’s so it’s economy should be much bigger.
Axis v Allies was a solid board game…
At least Japan is still Japanese, unlike Germany.
"The German economy contracted by 0.3% in the final quarter of 2023, aligning with market expectations and marking a downturn after two consecutive periods of stagnation, a preliminary estimate showed. Europe's largest economy faced mounting challenges, grappling with the impact of rising prices and increased borrowing costs, particularly affecting the manufacturing sector. Gross fixed capital formation witnessed a significant decline, primarily due to decreases in investments in construction and machinery and equipment. On a year-on-year basis, the economy contracted by 0.2% in the fourth quarter, entering a technical recession for the first time since 2020-21."Isn't it interesting that today's "news" can report such disparate things?Germany GDP Growth Rate Trading Economics
But when the USA did that under Biden they told us that’s not the definition of a recession.
Japan needs to vastly expand in nuclear power, with the latest up-todate modern safe small modular nuclear power plant designs, to end its dependence on energy imports, and the weight of that on its economy. It not only imports oil for gasoline but 97% of its energy comes from imported coal and natural gas.
I had forgotten about that game. It saved me from having to play Monopoly (of which I am not a fan) with my kids on several occasions. Good game.
And it would seem Japan has slipped on productivity as well, with gdp per capita less than Germany’s.
“At least Japan is still Japanese, unlike Germany.”
And that is a good thing.
Ever since the “divine wind” saved Japan from Kublai Khan they have been doing okay.
1945 was kind of tough year though.
I have a young relative who teaches English in a school district in Japan. He seems to like it very well, although from his view many things are expensive and the size of most people’s living space, including his, is much less than we are accustomed to in this country. At least he is a quite a ways from Tokyo so his cost of living is below what one would expect there.
The dictionary doesn’t know the definition of anything these days.
Like the UK and the G7, I’ll hang their recessions on bidenomics and the Obama doctrine.
Badly written story. “Nominal” is a direct translation of Euros to US$ without taking price levels into account. It seems confusing if you are not used to reading this stuff.
Real growth excludes inflation.
Japans GDP per capita has been running behind Germany since 2012. This is I think primarily due to demographics.
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=JP-DE
Yes, precise assessments of a country’s economic situation - in detail - are notoriously unreliable. Or so I‘ve heard.
The Japanese have really been blessed.
You have to understand that under Biden's administration, everything is fluid. Take classified documents for example. If Trump has them, it's bad, if Biden has them it's good. It's the same thing with recession. It's good to be King.
Once you can't figure out what a woman is, it's all down hill from there.
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