Rolling coverage of the latest economic and financial news
- Introduction: Japan shrank by 7.8% in Q2
- Weak recovery in industrial production in June
- Full story: Japan hit by biggest GDP fall in 40 years,
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Global markets are subdued this morning, after Japan became the latest country to suffer a historic economic slump due to the Covid-19 pandemic. And with factory output weaker than hoped in June, the recovery could be slower than hoped.
Japan Q2 GDP Posts Biggest Contraction Since Comparable Data Became Available In 1980 – Govt
Private consumption, which accounts for more than half of Japan’s economy, fell 8.2% for the quarter, bigger than analysts’ forecast of a 7.1% drop. Capital expenditure declined 1.5% in the second quarter, less than a median market forecast for a 4.2% fall.
External demand, or exports minus imports, shaved 3.0% off GDP, as the pandemic dampened global demand, the data showed.
Global report: Japan hit by biggest GDP fall in 40 years, Australia suffers deadliest day https://t.co/wptTyYc2Rn
Asia markets have started the week on a mixed note with the latest Japanese Q2 GDP numbers showing that the world’s third biggest economy contracted by -7.8%, with private consumption sliding -8.2%, both by more than expected. In a development that is even more worrying is that industrial production in June only recovered a modest 1.9% significantly below expectations of 2.7%, and pointing to a weak recovery towards the end of Q2, as we look towards Q3.
As such equity markets here in Europe also look set to open on a mixed note with no clear sense of direction.