Japan’s economy shrinks; geopolitics and global elections ‘threaten financial stability’; reality TV stars charged over FX scheme – business live

From 6h ago 02.47 EDT Introduction: Japan shrinks faster than expected Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. Japan’s economy has made a weak start to 2024, shrinking faster than expected, and confirming the UK as the joint fastest-growing G7 country this year. Japan’s GDP contracted at an annualised rate of 2% in January-March, compared to October-December, worse than the 1.5% drop in activity forecast. That works out as a 0.5% quarterly drop in activity, as households and companies cut back. Weak consumer spending dragged on growth as did a fall in capital spending and net exports. Japan\'s Q1 GDP shrinks more than expected.Japan\'s GDP fell 0.5% in Q1 2024, compared to market expectations of a 0.4% drop. Private consumption fell for the fourth consecutive quarter, with consumers cutting spending due to high living costs, sluggish wages, and a quake. — Kedia Advisory (@kediaadvisory) May 16, 2024 There are temporary factors to blame – including a New Year’s Day earthquake near Tokyo in which more than 200 people died, and a safety scandal at carmaker Daihatsu which disrupted production. But in another blow for Tokyo, data for the fourth quarter of last year was revised down to show GDP was flat. That means nine months with no growth, since Japan’s economy slumped last summer. Japan´s GDP Contracted for Q1 2024(Bloomberg) pic.twitter.com/KPmJaaFsv8 — Baba (@Babahodl) May 16, 2024 This 0.5% contraction in January-March puts Japan at the bottom of the G7 growth league. We already know that the UK expanded by 0.6% in Q1, ahead of the US with 0.4%

growth and Italy with 0.3%, while Germany and France both expanded by 0.2%. Official Q1 data for Canada isn’t out yet, but it’s estimated to have expanded by 0.6%. Japan’s weak growth is a headache for the Bank of Japan, as it tries to normalise monetary policy after running a massive stimulus programme. Predictions that the BoJ will struggle to raise interest rates have hurt the yen against the US dollar in recent weeks. Fortunately for the BoJ, though, the dollar is weakening after yesterday’s drop in US inflation. The agenda 7am BST: Norway’s Q1 2024 GDP report9am BST: European Central Bank’s financial stability reviewNoon BST: Bank of England policymaker Megan Greene gives speech on “The current state of Britain’s labour market”1.30pm BST: US weekly jobless figures2.15pm BST: US industrial production data Share14m ago 08.45 EDT Social media influencers should take note of the charges brought against several reality TV stars by the FCA today, says Sushil Kuner, financial services regulatory lawyer at law firm Gowling WLG. This action follows hot on the heels of the FCA’s recently published guidance on financial promotions on social media which warned influencers who promote financial products or services without having those promotions approved by an FCA authorised person that they may be committing a criminal offence. This action demonstrates the FCA’s commitment to protect consumers from potentially harmful promotions made by influencers who often have significant followers and reach. Social media influencers should take note of this clear warning from the FCA that it will take action where it sees them unlawfully

promoting financial products and services, with criminal prosecution being a real threat. Share20m ago 08.39 EDT US jobless claims drop back After jumping last week, the number of Americans seeking unemployment support has dropped back. There were 222,000 fresh ‘initial claims’ for jobless help last week (to 11 May), the US Department of Labor has reported, down from 232,000 in the previous seven days. The DOL reports that in the previous week: The largest increases in initial claims for the week ending May 4 were in New York (+10,171), California (+3,595), Indiana (+2,367), Illinois (+1,836), and Texas (+1,253), while the largest decreases were in Iowa (-1,177), New Hampshire (-435), Connecticut (-334), Louisiana (-213), and Kentucky (-208). It’s a sign that US firms are holding onto workers, despite efforts by the Federal Reserve to suppress demand and price rises by raising interest rates. However, there is an increase in people receiving at least two week’s unemployment support. The number of continuing claims jumped by 13,000 to 1,794,000, up from 1,781,000, which suggests it’s becoming harder to find a job… Even though initial claims were lower than expected, continuing claims showing an increase would suggest those that are starting to receive unemployment benefits are not finding new work… https://t.co/oVUVQqk1sl — Short The Vix (@ShortTheVix1) May 16, 2024 Share1h ago 08.02 EDT Greene: Inflation persistence has waned Bank of England policymaker Megan Greene has said this lunchtime that the persistence of inflation has weakened since last summer. In a speech to manufacturers body Make UK, Greene says the Ban