Japanese Economy Monthly Forecast (September 2019)

Data updates
▶ The index of industrial production in August declined for the first time in two months (-1.2% MoM).
▶ Rush demand before the consumption tax hike this year seems limited compared to the previous tax hike in 2014.
▶ Both planned residential construction expenditure and capital goods shipments increased in July-August.
▶ Real net exports expanded.


▶ We forecast real GDP growth (expenditure side) of +0.6% QoQ in Q3, or +1.4% if annualized. The production-side forecast is an annualized +2.6%. The average of the two forecasts is an annualized +2.0%.
▶ We expect that the reactionary fall after the tax hike this year will be milder than it was five years ago.
▶ We forecast an overall GDP deflator of +0.1% QoQ in Q3.