Tuesday, December 8, 2009

A Big Japan Oops: Growth of 1.8% Instead Of The Estimated 4.3%, Deflation

We have written about the dire Japanese situation on several occasions, "Japan, the land of the setting sun".

This will certainly not help. It's a big oops. You'd think heads would roll.

Bloomberg: "Japan’s economy expanded less than a third of the pace initially reported in the three months to September as companies slashed spending. Gross domestic product rose at an annual 1.3 percent pace, slower than the 4.8 percent reported in preliminary figures last month, the Cabinet Office said today in Tokyo. The revision was deeper than the predictions of all but one of the 17 economists surveyed by Bloomberg News".

"Today’s report added to evidence that falling prices are taking hold in the economy. In nominal terms the economy shrank 0.9 percent last quarter, compared with the government’s initial prediction for a 0.1 percent contraction. The GDP deflator, the broadest indicator of price declines, slid 0.5 percent. The gauge has only risen twice in the past decade. "

"Falling prices have been squeezing profit at home, prompting the government to declare last month that the country is back in deflation and push the Bank of Japan to do more to spur the economy".

The Nikkei is down 1.23% as of 12PM local time (10PM ET):

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