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🇯🇵❗️Cable FX Macro Weekly Note: Japan Q3 GDP Growth

**As seen in Risk In The Week report 11/10/23, subscribe at Japanese 2Q economic growth rose by 4.8% Q/q, the headline metric came slower than the flash estimate of 6.0% and below the consensus median of 5.6%. The Japanese economy has been expanding for three consecutive quarters, this is the longest positive growth streak since 2019. Second-quarter growth was supported by a rebound in exports, the figure posted a 12.9% rise vs the prior decline of 14.4%, and imports recorded a third consecutive quarterly decline at -16.5%. Domestic demand contracted by 2.2% vs a prior rise of 4.1%, there was a dip in private final consumption expenditure, and government expenditure and public investment surged marginally. Domestic demand took off 0.6 percentage points from the headline, this was the largest negative contribution since 3Q 2021.

The desk at Wells Fargo Securities said that they will be watching for signs of recovery in domestic demand, from their view, the consensus forecast of a 3Q output contraction is only a slight correction from a strong 1H and this will not affect BoJ policy decision-making. Wells Fargo added that if the BoJ sees more balanced growth in 3Q and future quarters, they expect the central bank to lift rates 10bps and scrap YCC policy by April 2024.



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