Nikkei Opens Sharply Lower After Major Downward Revision To GDP

Japan’s GDP has been revised sharply lower — to 1.3% from 4.8% — far worse than what analysts had been expecting.

Bloomberg: Gross domestic product rose at an annual 1.3 per cent pace, slower than the 4.8 per cent reported in preliminary figures last month, the Cabinet Office said today in Tokyo. The median estimate of 17 economists surveyed was for 2.8 per cent growth.

Today’s report showed companies are cutting investment in plant and equipment to protect earnings, fueling concern about a recovery that’s already under threat from deflation and a rising yen. Prime Minister Yukio Hatoyama unveiled a 7.2 trillion yen ($81 billion) stimulus package yesterday, the first for his Cabinet, and the Bank of Japan last week decided a 10 trillion yen credit program to support the economy.

Following our decline, the Nikkei has started the day down sharply lower.

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