Brentley Maddox Global - Japan Struggles With Weakening Export Demand

TAIPEI CITY, Taiwan, November 23, 2018 (Newswire.com) - TAIPEI CITY, Taiwan, November 23, 2018 (Newswire) -Amid persistent concerns that increased market volatility and economic uncertainty could have a long-term negative impact on global recovery, Japan’s government has highlighted weaknesses in some of its Asian economic peers while maintaining that it remains on track for moderate recovery.

But analysts at Brentley Maddox Global say Japan’s annual core consumer inflation, which remained the same in October, pointed to weak domestic spending which prevented an increase in retail prices.

Brentley Maddox Global analysts believe this indicates that the Bank of Japan’s target of 2 percent inflation will continue to remain elusive.

As decreased demand from China due to global trade tensions affects the outlook for Japan’s export-driven economy, Japan is facing significant challenges as it struggles to reach steady price growth.

While a fall in domestic demand caused Japan’s economy to contract by more than anticipated in the third quarter, analysts at Brentley Maddox Global say the weakening demand for exports is a greater concern.

The economic contraction in the third quarter, largely attributed to natural disasters that stalled manufacturing activity and reduced consumption, was likely temporary with manufacturing output expected to recover in the final quarter of the year.

According to official data, Japan’s exports fell by 1.8 percent on a quarterly basis in the third quarter, the quickest decline since 2015 and, although Japan’s economy will probably continue to grow moderately in the final quarter of this year, its economic recovery will likely be impacted by growing protectionism.

Source: Brentley Maddox Global