TOKYO—Japan's economy is still struggling against headwinds from a slowdown in key export markets, government data released Monday showed, casting doubt over the viability of the nation's economic recovery going forward.
The world's third-largest economy posted a current-account surplus of ¥625.4 billion ($7.99 billion) in July, narrowing 41% from a year earlier.
Separate revised data also showed that gross domestic product grew at a price-adjusted 0.7% in annualized terms during the April-June quarter, compared with an initial reading of a 1.4% expansion released last month.
"The data indicate how the economy has been slowing since the beginning of the year and increases concern over the economic outlook," said Hideki Matsumura, chief economist at Japan Research Institute.
The figures add to other recent weak data, including industrial production, showing Japan's export-led recovery wavering amid the global slowdown, and also cast doubt on the ability of domestic demand to support growth going forward.
The current-account figures showed a 7.4% decline in exports on year that a Ministry of Finance official briefing reporters attributed to weak exports to Europe and China.
The slump in exports contributed to an overall trade deficit of ¥373.6 billion, a figure that shows "the recovery in the overseas economies, which was expected in the latter half of this year, is being delayed," said RBS Securities chief Japan economist Junko Nishioka.
The current account measures trade in goods, services, tourism and investment. It is calculated by determining the difference between Japan's income from foreign sources against payments on foreign obligations and excludes net capital investment.
An official briefing reporters on the GDP data said a downward revision of the change in private inventories' contribution to GDP had a large impact on the change. The change in private inventories contributed minus-0.2%, compared with an initial flat reading.
Hidenobu Tokuda, economist at Mizuho Research Institute, said that weak exports and the end to subsidies for fuel-efficient cars that have supported domestic demand are likely to weigh on growth as manufacturers cut back on production in coming months, though reconstruction demand from last year's disasters could continue to be a bright spot.
"Until the end of the year, growth will continue in a flat trend," he said. GDP data also showed domestic demand and capital spending marginally weaker than originally reported.
Capital spending was revised slightly downward to a 1.4% increase from the previous quarter. The preliminary figure showed an expansion of 1.5%.
wsj.com
The world's third-largest economy posted a current-account surplus of ¥625.4 billion ($7.99 billion) in July, narrowing 41% from a year earlier.
Separate revised data also showed that gross domestic product grew at a price-adjusted 0.7% in annualized terms during the April-June quarter, compared with an initial reading of a 1.4% expansion released last month.
"The data indicate how the economy has been slowing since the beginning of the year and increases concern over the economic outlook," said Hideki Matsumura, chief economist at Japan Research Institute.
The figures add to other recent weak data, including industrial production, showing Japan's export-led recovery wavering amid the global slowdown, and also cast doubt on the ability of domestic demand to support growth going forward.
The current-account figures showed a 7.4% decline in exports on year that a Ministry of Finance official briefing reporters attributed to weak exports to Europe and China.
The slump in exports contributed to an overall trade deficit of ¥373.6 billion, a figure that shows "the recovery in the overseas economies, which was expected in the latter half of this year, is being delayed," said RBS Securities chief Japan economist Junko Nishioka.
The current account measures trade in goods, services, tourism and investment. It is calculated by determining the difference between Japan's income from foreign sources against payments on foreign obligations and excludes net capital investment.
An official briefing reporters on the GDP data said a downward revision of the change in private inventories' contribution to GDP had a large impact on the change. The change in private inventories contributed minus-0.2%, compared with an initial flat reading.
Hidenobu Tokuda, economist at Mizuho Research Institute, said that weak exports and the end to subsidies for fuel-efficient cars that have supported domestic demand are likely to weigh on growth as manufacturers cut back on production in coming months, though reconstruction demand from last year's disasters could continue to be a bright spot.
"Until the end of the year, growth will continue in a flat trend," he said. GDP data also showed domestic demand and capital spending marginally weaker than originally reported.
Capital spending was revised slightly downward to a 1.4% increase from the previous quarter. The preliminary figure showed an expansion of 1.5%.
wsj.com
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