BOJ: Japan’s output gap slumps 4.83% in Q2, turns negative for first time since 2016

Dhwani Mehta FXStreet

Japan’s output gap, which measures the difference between an economy’s actual and potential output, slumped 4.83% in the second quarter, a Bank of Japan (BOJ) estimate showed on Monday.

The output gap fell into negative territory for the first time since 2016.

In its previous report, the BOJ estimated Japan’s potential growth rate at 0.57% for the first half of the fiscal year 2019.

Meanwhile, the output gap shrank from 1.03% to 1.02% in the first quarter.

Market reaction

The yen comes under fresh selling pressure on the above report, with USD/JPY testing daily highs at 105.61.

At the press time, the spot gains 0.23% to trade at 105.58.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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