JAPAN DATA: Q3 GDP Close To Market Expectations, Private Consumption Firmer

Japan Q3 GDP was reasonably close to market expectations. The headline q/q was 0.2% as forecast, although in annualized terms we were 0.9% against a 0.7% forecast. Q2 growth was revised down a touch to 0.5%q/q from the originally reported 0.7% gain. 

• In terms of the detail, private consumption was a positive at +0.9%q/q, versus +0.2% forecast. Q2 was a +0.7% gain. Business spending fell as expected by 0.2%/q/q. Inventories added 0.1ppts to growth versus a flat forecast, but net exports dragged growth 0.4ppts lower (against a +0.1ppt forecast).
• In nominal terms GDP was slightly below market expectations, +0.5% in q/q terms versus +0.9% forecast and 1.7% prior. In y/y terms, the GDP deflator is 2.5%.
• The private consumption rise will be viewed as a positive by the BoJ/authorities. The chart below overlays q/q private consumption (the white line) with q/q GDP growth (in real terms). The hope will be for firm wage gains to underpin growth into 2025.
• Other wise the data likely doesn't shift central bank thinking much. Next Friday's national CPI for Oct is likely to be the next major focus point. Domestic related services inflation will be eyed.    

Fig 1: Japan Private Consumption (White Line) & GDP Q/Q