The latest figures on the state of Japan’s economy in August were not uniformly bad, but as signs that the slowdown has bottomed out they were unconvincing. Our long-held view that the economy will contract sharply in Q3 is being increasingly borne out by the hard data and the consensus is catching up with our forecast of a 1.0% (not annualised) decline in GDP. A rebound in Q4 also looks less assured as the global economy struggles and exports continue to fall.
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