Forex News – Japanese economy grows at faster pace as Abe’s stimulus takes effect
May 16, 2013 7:54 am
Japan experienced a pick up in the pace of growth in its economy during the first three months if this year. Data released on Thursday showed that GDP increased at 0.9 percent, which was more than the expected 0.7 percent forecasted.
Driving growth was an increase in consumer consumption and also an increase in exports. Japan is hugely dependent on exports.
On an annualized basis GPD grew 3.5 percent. This is higher than the 2.5 percent growth of the US during the same quarter.
USDJPY slipped after the data, easing to 101.96 yen, slightly below a four year high hit yesterday.
The strong Japanese data was perceived as a thumbs up for Japan’s Prime Minister Shinzo Abe who has recently pushed for aggressive monetary and fiscal stimulus. The data show that his plan is working and will likely give him increased support in his cabinet.
A strong yen in recent years has been detrimental to Japan’s exports, which make up a large sector of the world’s third largest economy.
Therefore a weaker yen, which resulted from the Bank of Japan’s implementation of bolder stimulus measures, has helped immensely.
In the first quarter, exports, helped by the yen’s retreat to 4-1/2-year lows against the dollar, beat expectations, making a 0.4 percent net contribution to GDP, despite higher import costs caused by a weaker currency.
Japan experienced a pick up in the pace of growth in its economy during the first three months if this year. Data released on Thursday showed that GDP increased at 0.9 percent, which was more than the expected 0.7 percent forecasted.
Driving growth was an increase in consumer consumption and also an increase in exports. Japan is hugely dependent on exports.
On an annualized basis GPD grew 3.5 percent. This is higher than the 2.5 percent growth of the US during the same quarter.
USDJPY slipped after the data, easing to 101.96 yen, slightly below a four year high hit yesterday.
The strong Japanese data was perceived as a thumbs up for Japan’s Prime Minister Shinzo Abe who has recently pushed for aggressive monetary and fiscal stimulus. The data show that his plan is working and will likely give him increased support in his cabinet.
A strong yen in recent years has been detrimental to Japan’s exports, which make up a large sector of the world’s third largest economy.
Therefore a weaker yen, which resulted from the Bank of Japan’s implementation of bolder stimulus measures, has helped immensely.
In the first quarter, exports, helped by the yen’s retreat to 4-1/2-year lows against the dollar, beat expectations, making a 0.4 percent net contribution to GDP, despite higher import costs caused by a weaker currency.
Related Posts: