Japan’s economy probably grew last quarter at half the pace of the previous three months, a slowdown analysts predict is deepening as Europe’s debt crisis and the yen’s gains erode exports.
Gross domestic product expanded an annualized 2.3 percent in the three months through June, compared with 4.7 percent in the first quarter, according to the median estimate of 24 economists surveyed by Bloomberg News. The Cabinet Office will release the report on Aug. 13.
The slump may deepen this quarter, with exporters from Sony Corp. to Canon Inc. in the past month cutting profit projections because of waning overseas growth. As Prime Minister Yoshihiko Noda prepares to push a sales-tax increase through the Diet today, pressure may rise on policy makers to consider a supplementary budget and monetary stimulus to shore up demand.
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Morning commuters make their way to work in Tokyo. (Bloomberg) |
“We need to be alert to the downside risks to the economy, especially in the third quarter,” as the global slump spills over to Japan, said Kohei Okazaki, an economist at Nomura Securities Co. in Tokyo, a unit of Japan’s largest brokerage. “There’s a possibility monetary and fiscal stimulus will be implemented by the end of the year.”
A separate survey of analysts by Bloomberg News shows growth will further cool to 1 percent this quarter.
The Bank of Japan refrained from easing policy at a board meeting yesterday. Central banks around the world have been supporting their economies as Europe’s woes deepen. The Philippines unexpectedly cut interest rates a third time this year to a record low on July 26, and the U.S. Federal Reserve said on Aug. 1 that it will pump fresh stimulus if necessary.
Sony last week cut its profit forecast after gains in the yen eroded overseas earnings and sales of consumer electronics weakened. Canon, the world’s largest camera maker, also cut its full-year profit estimate because of a stronger yen and expectations for weaker growth in the U.S., Europe and China. Sony and Canon get about 70 percent and 80 percent of sales revenue from outside Japan, respectively.
(Bloomberg)
