Japanese Economy Stronger Than Anticipated in Q3
- Japanese economy growing faster than anticipated
- Final GDP Q/Q 0.4%, better than expected 0.2%
- Possible stabilisation of global growth
Early during Asian trading on Monday, the Japanese government released GDP figures which came out better than anticipated. This indicates a stabilizing global growth picture as being a possibility, as Japan is such a heavily export-laden economy. It could be good news for those worried about global growth, as Japan is one of the crucial players.
The Japanese released GDP Q/Q for Q3 early during the day on Monday, coming out at 0.4% as opposed to the expected 0.2% for the quarter. Ultimately, this is a market that is growing at twice the rate originally expected. Although the positive numbers probably aren’t enough to make the Bank of Japan take action, it shows that there is more strength in Japan than originally anticipated. This is good news for those expecting the global economy to turn around, as Japan sends so much in the way of exports around the world.
This announcement isn’t a major one that will move the markets drastically, with the announcement likely to be filed away under “things to consider.” As we have seen, there are a multitude of things to consider. The Final GDP Price Index year on year came out as expected at 0.6%, so that is at the very least not disappointing. The German Trade Balance came out better than anticipated, as that global export powerhouse has also showed signs of surprise.
The Japanese Final GDP coming out better than anticipated is yet another thing that shows that perhaps the worst is behind us. Ultimately, this is a market that should continue to see a lot of noise. If there’s a successful trade deal between the Americans and the Chinese, this will have a massive “knock on effect” in places like Japan which are already starting to do well.
Supply chains are starting to leave China, and Japan could be one of the major destinations. There’s also Vietnam, which supplies cheap labor, while the Japanese supply technical know-how. With the government interference that we are seeing in China, Japan becomes a much more attractive solution for the high-end manufacturing that is needed by major exporters around the world.
That being said, keep the Japanese yen is highly sensitive to risk appetite, and therefore if there are concerns about global trade, that could strengthen the yen. This could in fact turn the Japanese economy right back around as Japanese goods become more expensive.