Trade war overshadows Japan's economic outlook

CNC
Added On August 11, 2018

 Official figures show Japan bounced back to growth in the second quarter. 

 
However, fears of U.S. trade wars clouded the outlook for the world's third-largest economy.
 
According to Japan's cabinet office, in the April-June period, the economy grew 0.5 percent quarter-on-quarter, compared with a 0.2-percent decline in the January-March period.
 
The growth figure -- annualised at 1.9 percent -- was better than analysts had expected. And it beat a market consensus of 0.3 percent growth compiled by Bloomberg News.
 
In the previous quarter, from January to March, the Japanese economy saw a decline, which interrupted eight consecutive quarters of growth. However, Friday's figures showed Japan made a quick turnaround in the April to June period.
 
Despite this, analysts warned that U.S.-led trade wars could be a major risk factor for the Japanese economy, which is still struggling to win a long battle against deflation.
 
Trump's threat to impose tariffs on vehicles imported into the world's number-two car market remains a concern for Japanese automakers.
 
Meanwhile, consumer spending has remained stubbornly lacklustre, with companies still stingy on wage raises, despite healthy profits.
 
In late July, the Bank of Japan revised down its inflation forecasts, making minor tweaks to a monetary policy that has so far failed to lift prices.
 
According to Friday's data, private consumption rose 0.7 percent in the second quarter, recovering from a 0.2-percent decline in the first quarter.
 
Meanwhile, business investment in the second quarter jumped 1.3 percent, thanks partly to booming construction ahead of the Tokyo 2020 Olympics.