Economic uncertainties still prevail in Japan

Yann Quelenn Swissquote Bank Ltd

A set of data has been released this morning and it seems it is a never-ending story for Japan. April machine orders just collapsed at -.31% m/m while markets had estimated an increase of 0.5. This data is often used as a proxy for the capital expenditure.

Investors seem to be reluctant to invest domestically, due to several possible reasons including uncertainties about President Trump’s trade policy and about Japan's economic future.This morning, the Japan producer price index came in flat at 0% and it represents the weakest PPI result in nine months. Already last week, the growth rate had been revised down to 0.3% from 0.5%.

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The yen has slightly strengthened against the US dollar because of a risk-off sentiment in the market over the past few weeks. But we consider the economy in Japan is still struggling to recover. The sad reality is Japan has not succeeded in boosting private consumption, which accounts for 60% of the GDP.

Author

Yann Quelenn

Swissquote Bank Ltd

Yann Quelenn is a Market Analyst at Swissquote Bank with strong technical and financial background. Previously, he worked as FX Trader at Banque Privée Edmond de Rothschild and as Portfolio Manager at Polaris Investment in Luxembourg.

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