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Japan GDP preliminary for Q2 -7.8% q/q (vs. expected -7.5%)

Japan GDP preliminary for Q2 2020, capturing the impact of the COVID-19 outbreak and response

GDP sa -7.8% q/q  , a miss on already ugly low expectations

  • expected -7.5%, prior -0.6%

GDP annualised sa -27.8% q/q (ps when you see screaming headlines that Japan’s economy has shrunken 30% …. it hasn’t, but this is what the economically illiterate are referring to – you’ll know better)

  • expected -26.9%, prior -2.2%

GDP nominal -7.4% q/q

  • expected -6.5%, prior -0.5%

GDP deflator (an inflation indication) %

  • expected 1.7%, prior 0.9%

Private consumption -8.2%

  • expected -6.9% q/q, prior -0.8%

Business spending -1.5% … if there is some not quite so bad news to take away from the data release this smaller than expected drop in capex is it

  • expected -4.0%, prior -1.7%
This is the 3rd consecutive quarter of GDP contraction for Japan.
Japan is a net exporters, the decline in demand offshore has taken a heavy toll on shipments – Q2 exports fell at their fastest since Q1 2009 (GFC influence) and external demand has subtracted the biggest hit from GDP since 1980 (based on comparable data).
ps. yen is doing little on the data release.

Japan trade balance for June Y -268.8bn (expected Y -11.9bn)

Japanese data, exports worse than expected, imports fall lower than expected leading to a blow out on the deficit for the month

Japan trade balance for June Y -268.8bn

  • expected Y -11.9bn, prior Y -838.2bn

Trade balance adjusted Y -423.9bn

  • expected Y -331.1bn, prior Y -601.0bn

Exports -26.2% y/y

  • expected -24.7% y/y, prior -28.3%

Imports -14.4% y/y

  • expected -17.6% y/y, prior -26.2%
Japan is an export powerhouse, this miss on exports is suggestive of a global economy in even worse shape than may have been thought.

China June trade data, exports +4.3% y/y, imports +6.2% y/y (yuan terms)

china trade, yuan terms:

trade balance: expected CNY 425bn, prior was CNY 442.75bn

  • Exports +4.3% y/y: expected +3.5%, prior was +1.4%
  • Imports +6.2% y/y: expected -4.7%, prior was -12.7%

Exports have now risen for 3 consecutive months

The data is only dribbling out, do not have the trade balnce announced from China yet, nor the figures in USD terms. Nevertheless, bounce of both imports and exports is encouraging for the Chinese economy.

China has said trade with the US is down 6.6% y/y in H1.

Add this to the data agenda for Tuesday 14 July 2020 – China June trade data

Trade balance, exports and imports data are due from China today for june June 2020

There is no specific time set for the releases, and it has been very unpredictable in past months.

Yuan terms:

trade balance: expected CNY 425bn, prior was CNY 442.75bn

  • Exports y/y: expected +3.5%, prior was +1.4%
  • Imports y/y: expected -4.7%, prior was -12.7%

USD terms:

trade balance: expected $59.6bn, prior was $62.93bn

  • Exports: expected -2.0%, prior -3.3%
  • Imports: expected -9.0%, prior was -16.7%

Saudi Aramco has reduced the volume of crude it will supply to Asia

Reuters report citing four unnamed sources that the world’s largest oil exporter has cut August heavy crude supply for some Asian refiners

  • at least four buyers in Asia
  • cuts were mainly for Arab Heavy crude
No further details in the Reuters report.