More evidence on the impact can be read from the Q3 GDP figures. These show a decline to 7% from an adjusted 7.4% the previous quarter. This is much better than expected and tends to confirm the growing sense that expectations were excessively pessimistic. The latest growth was led by a 19.9% increase in government expenditure combined with an impressive increase of 10.1% in consumption. Gross Fixed Capital Formation pulled overall growth down, increasing by only 3.3%. The official growth forecast for FY17 has been held at 7.1% but the Q3 figures combined with anecdotal evidence suggest that a positive surprise may be in the offing. The Nikkei Purchasing Managers Index for February may be confirming this: a modest increase from 50.4 to 50.7 suggests accelerating activity. Although January’s core sector growth figure slowed to a five-month low of 3.4%, it’s worth noting that the number was depressed by contraction in refinery products, fertilizers and cement, three areas heavily affected by demonetization.