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JapaneseGDPandExportsSeriouslyUnderperformExpectations

// Mish’s Global EconomicTrendAnalysis

The huge string of unexpectedly sour economic data continues to pour in. Add Japan to the spotlight. The BBC reports Japan’sQuarterlyGrowthDisappointsAheadof Sales TaxHike.

Japan’s economy grew less than expected last year, despite forecasts it would benefit from a jump in spending ahead of a sales tax increase in April.

Gross domestic product rose by 1% on an annualized basis in the three-month period to December, compared to market estimates of a 2.8% expansion.

This was due to weaker private consumption and capital spending, as well as lower export figures.

Mr Abe also pushed through a controversial sales tax increase last year, in an attempt to raise funds to reduce the country’s large public debt.

However, Japan’s GDP is forecast to shrink in the April-to-June period because of the increase in the consumption tax to 8% from 5%.

The global economy is seriously slowing just as Abe pushed through a massive income tax hike. Yet people still sing the praises of Abenomics.

I fully expect Abe to step up to the plate with further measures to sink the yen in still more futile efforts to boost exports.

For other "unexpected" news, please see …

The unexpected decline in industrial production (the most since May of 2009) Followed the unexpected decline in retail sales which in turn followedThe unexpectedly weak jobs report in FebruaryWhich followed a Huge Miss in ISM; Largest Decline in New Orders in 4 YearsWhich followed a Big Miss: Nonfarm Payrolls +74,000 vs. 205,000 Expected in January

The unexpected now hits Japan. Is Japan having bad weather too?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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