Japan will release preliminary Q1 GDP numbers on 20 May. The Q1 GDP growth of 0.5% q/q is expected on a seasonally adjusted basis, or 2.3% q/q annualised. Consensus is lower, at 1.6% q/q annualised growth – a soft reading versus historical levels. The recovery in private consumption and business investment likely remained sluggish, as implied by the contraction in retail sales and volatile industrial production in Q1. “Government spending also likely slowed, as the impact of previous fiscal stimulus may have waned and the extra budget approved in February had yet to kick in. Net exports were likely the main driver of Q1 GDP thanks to both higher export growth and a slowdown in imports” notes Standard Chartered.
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