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Japan downgrades Q4 GDP on service sector weakness By Reuters

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© Reuters. Pedestrians wearing protective face masks, amid the coronavirus disease (COVID-19) pandemic, are seen at a shopping district in Osaka, Japan, in this photo taken by Kyodo April 7, 2021. Mandatory credit Kyodo/via REUTERS

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By Kantaro Komiya and Daniel Leussink

TOKYO (Reuters) -Japan’s economic rebound was softer than initial estimates in the final quarter of 2021, revised data showed on Wednesday, as the pickup seen in consumer and business spending was weaker than first reported.

The downwardly revised growth is bad news for policymakers tasked with keeping the country’s fragile recovery on track as a jump in commodity prices due to the Ukraine crisis and persistent supply disruptions heighten economic uncertainty.

Revised gross domestic product (GDP) data released by the Cabinet Office on Wednesday showed Japan expanded an annualised 4.6% in October-December. That was lower than economists’ median forecast for a 5.6% gain and the preliminary reading of 5.4% released last month.

“This suggests that Japan’s economic recovery from the pandemic is weaker than that of Europe and the United States,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

On a quarter-on-quarter basis, GDP expanded 1.1%, falling short of the median market expectations for a 1.4% gain.

The change was mostly due to the downgrade in private consumption, a government official told a media briefing.

Private consumption, which makes up more than a half of Japan’s GDP, increased 2.4% in October-December from the previous quarter, revised down from an initially-estimated 2.7% gain. Spending in the service sector, in particular, was downgraded to a 3.1% expansion from an initial 3.5% increase.

Recent industry ministry data for December showed spending on services such as restaurants and train rides was weaker than the preliminary estimate based on private-sector figures, the official said.

“Private consumption was likely quite weak in January, due to soft spending on capital goods such as cars and services,” said Minami, adding fresh uncertainty around Ukraine is cooling business investment.

In the fourth quarter, capital expenditure grew 0.3%, lower than economists’ forecasts for a 0.7% gain and a preliminary figure of a 0.4% advance.

While data earlier this month showed robust fourth-quarter business spending, the revised GDP figures reflected weakness in items such as software investment, the official said.

Domestic demand as a whole contributed 0.9 of a percentage point to revised GDP figures, while net exports added 0.2 of a percentage point.

Economists in a Reuters poll last week forecast annualised growth of 0.4% in the January-March quarter, slashing previous projections given Omicron coronavirus variant infections and uncertainties caused by the war in Ukraine.

Yusuke Shimoda, senior economist at Japan Research Institute, said he was still expecting growth to come in positive in the first quarter.

“But we’re still in early March,” he added. “Further downside risks can’t be ruled out depending on Russia’s actions.”

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Teladoc Tumbled 38% After Big First-Quarter Loss. Is It Just a Pandemic Play?

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After pandemic drop, Canada’s detention of immigrants rises again By Reuters

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© Reuters. FILE PHOTO: Two closed Canadian border checkpoints are seen after it was announced that the border would close to “non-essential traffic” to combat the spread of novel coronavirus disease (COVID-19) at the U.S.-Canada border crossing at the Thousand Isla

By Anna Mehler Paperny

TORONTO (Reuters) – Canada is locking up more people in immigration detention without charge after the numbers fell during the pandemic, government data obtained by Reuters shows.

Authorities cite an overall rise in foreign travelers amid easing restrictions but lawyers say their detained clients came to Canada years ago.

Canada held 206 people in immigration detention as of March 1, 2022 – a 28% increase compared with March 1 of the previous year. Immigration detainees have not been charged with crimes in Canada and 68% of detainees as of March 1 were locked up because Canada Border Services Agency (CBSA) fears they are “unlikely to appear” at an immigration hearing, according to the data.

The rise puts Canada at odds with Amnesty International and other human rights groups that have urged Ottawa to end its use of indefinite immigration detention, noting CBSA has used factors such as a person’s mental illness as reason to detain them.

A CBSA spokesperson told Reuters that “when the number of entries (to Canada) goes up, an increase in detention is to be expected.” CBSA has said in the past it uses detention as a last resort.

A lawyer told Reuters her detained clients have been in Canada for years.

In the United Kingdom, too, immigration detention levels rose last year after dropping earlier in the pandemic, according to government statistics. Unlike Canada, the United States and Australia, European Union member states have limits on immigration detention and those limits cannot exceed six months.

The rise in detentions puts people at risk of contracting COVID-19 in harsh congregate settings, refugee lawyers say.

Julia Sande, Human Rights Law and Policy Campaigner with Amnesty, called the increase in detentions “disappointing but not surprising,” although she was reluctant to draw conclusions from limited data.

The number of immigration detainees in Canada dropped early in the pandemic, from a daily average of 301 in the fourth quarter (January through March) of 2019-20 to 126 in the first quarter (April through June) of 2020-21.

FEW NO-SHOWS AS DETENTIONS DROPPED

Detaining fewer people did not result in a significant increase in no-shows at immigration hearings – the most common reason for detention, according to Immigration and Refugee Board data.

The average number of no-shows as a percentage of admissibility hearings was about 5.5% in 2021, according to that data, compared to about 5.9% in 2019.

No-shows rose as high as 16% in October 2020, but a spokesperson for the Immigration and Refugee Board said this was due to people not receiving notifications when their hearings resumed after a pause in the pandemic.

Refugee lawyer Andrew Brouwer said the decline in detention earlier in the pandemic shows Canada does not need to lock up as many non-citizens.

“We didn’t see a bunch of no-shows. We didn’t see the sky fall … It for sure shows that the system can operate without throwing people in jail,” Brouwer said.

He added that detainees face harsh pandemic conditions in provincial jails – including extended lockdowns, sometimes with three people in a cell for 23 hours a day.

Refugee lawyer Swathi Sekhar said CBSA officials and the Immigration and Refugee Board members reviewing detentions took the risk of COVID-19 into account when deciding whether someone should be detained earlier in the pandemic but are doing so less now.

“Their position is that COVID is not a factor that should weigh in favor of release,” she said.

“We also see very, very perverse findings … [decision-makers] outright saying that individuals are going to be safer in jail.”

The Immigration and Refugee Board did not immediately respond to a Reuters request for comment.

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Nasdaq futures rise as market attempts comeback from April sell-off, Meta shares soar

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Stock futures rose in overnight trading as the market shook off the April sell-off and investors reacted positively to earnings from Meta Platforms.

Futures on the Dow Jones Industrial Average added 70 points or 0.2%. S&P 500 futures gained 0.7% and Nasdaq 100 futures jumped 1.2%.

The moves came as shares of Meta surged more than 18% after hours following a beat on earnings but a miss on revenue, a sign that investors may see signs of relief in the beaten-up tech sector. Shares were down 48% on the year heading into the results.

Meanwhile, shares of Qualcomm gained 5.6% in extended trading on the back of strong earnings while PayPal rose 5% despite issuing weak guidance for the second quarter.

“I think a lot of people want to believe that earnings are going to pull us out of this, but earnings are not what got us into this,” SoFi’s Liz Young told CNBC’s “Closing Bell: Overtime” on Wednesday. “… But the reality is there are so many macro headwinds still in front of us in the next 60 days that the market is just hard to impress.”

The after-hour activity followed a volatile regular trading session that saw the Nasdaq Composite stoop to its lowest level in 2022, as stocks looked to bounce back from a tech-led April sell-off. The index is down more than 12% since the start of April.

In Wednesday’s regular trading, the tech-heavy Nasdaq ended at 12,488.93, after rising to 1.7% at session highs. The Dow Jones Industrial Average rose 61.75 points, or 0.2%, to 33,301.93 propped up by gains from Visa and Microsoft, while the S&P 500 added 0.2% to 4,183.96.

Investors await big tech earnings on Thursday from Apple, Amazon and Twitter, along with results from Robinhood. Jobless claims are also due out Thursday.

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