One Step Forward, Two Steps Back…

Economic Research	5 May 2016
JAPAN
Economic Highlights
One Step Forward, Two Steps Back… Our nowcasting model, combining the latest source data and our assumptions, continues to imply a roughly flat preliminary 1q16 real GDP growth reading (to be released on May 18), with risk of a marginal contraction (kindly refer to chart 1). While the 1q16 growth backdrop is an improvement from the contraction in 4q15, the underlying momentum in final demand remains uneven at best. A crude model using only the manufacturing PMI data, one of the timelier indicators, implies that headline GDP growth might be even weaker. Indeed, the back-to-back contraction in the PMI through April suggests that Japanese economic growth in the first-half of 2016 on average is probably underwater. Economist:  Thomas Lam  | +65 6533 0389
To access our recent reports please click on the links below: 28 Apr: Best Guesses & Speculations 18 Apr: Rolling the Dice on the USD/JPY… 12 Apr: Is the Economy Only Slightly Above Water in 1Q 2016? 22 Mar: Is Fed “Guidance” a Potential Source of Volatility? 08 Mar: As Expansions Age, Are They More Likely to Stumble? 29 Feb: Headline GDP: Revisions & Preliminary Details