The most recent ugly Japanese GDP report for the world's third-largest economy implies that a recession is just a question of time. If one looks at the most recent print, one would think the nation's economy was being attacked by the coronavirus: at - 1.6% Q/Q and an incredible - 6.3% annualized. This was the second-most awful quarter for Shinzo Abe, outperforming even the decline from the Fukushima fiasco. The most recent GDP dive was a side-effect of the sale tax hike. It was to a great extent, the consequence of crumbling consumption, with Household Consumption plunging at an 11.5% annualized pace, the second-highest drop on record, and furthermore just behind the - 18.1% drop recorded after the first sales tax hike in 2014. It wasn't only households who conserved, Japan's CAPEX fell for the first time in 3 quarters, dragged down by construction and production machinery. Finally, the economic misery was also because of a second sequential drop in exports led by cars. Q1 GDP will be even worse because of the loss of activity in Chinese supply chains which have taken out a good piece of domestic manufacturing indefinitely.