Weak yen and COVID not to blame for Q3 GDP fall

Q3 saw a surprise contraction in GDP that many media outlets blamed on the surge in virus cases and the slide in the yen’s value during the quarter. We think instead that the real culprits were a surge in services imports linked to Japan's reopening and the two typhoons that struck the country in September. The upshot is that households do appear to have learnt to live with virus, which should help sustain spending during the current virus wave.

Asia Drop-In (24th Nov.): Our November dive into the big regional macro and market stories will include US-China relations after Bali, Beijing’s steps to ease policy and what to watch for as elections loom in Taiwan, Malaysia and India. Register here for the 20-minute online briefing.  

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