Japan: Economic outlook revised down – Mizuho Bank

Analysts from Mizuho Bank consider that the global economy will continue to slow down due to the escalation of US-China trade tensions and they lowered GDP forecast for Japan. 

Key Quotes:

“Reflecting the mounting possibility that the US will launch its fourth round of punitive tariffs upon Chinese goods, we have revised down our outlook on the economy premised upon such launch. The global economy should continue to slow down in 2020. Even though the US will most likely avoid the “fiscal cliff” in 2020, a “no-deal Brexit” in addition to US-China trade tensions will serve as downward pressures.”

“In FY2019 and FY2020, the Japanese economy will continue to record tepid growth due to the rise of adjustment pressures on capital investment and durable goods consumption. Given the cautious stance among corporate enterprises about raising sales prices, the rise of the core CPI (excluding the impact of the consumption tax hike) is forecast to moderate.”

“The Bank of Japan (BOJ) will keep monetary policy unchanged until it determines the impact of the consumption tax hike. Even though the BOJ will most likely address a downshift of the economy merely by tweaking its forward guidance, it could resort to pushing interest rates further down into negative territory in the event of a sharp appreciation of the yen.”

“Forecast on the rate of Japan’s GDP growth: FY2019 (+0.7% q-o-q p.a.), FY2020 (+0.4% q-o-q p.a.). A recovery in exports is unlikely, considering negative pressures stemming from the rise of uncertainties due to the fourth round of punitive tariff hikes by the US. Production activity should also remain stagnant for some time.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD flirts with 1.1100 as the dollar loses steam

The EUR/USD pair bounced from a daily low of 1.1065, as demand for the greenback receded during US trading hours. Upside caped for the shared currency amid fears of a German recession, Italian political turmoil.


GBP/USD losses upside momentum at the start of the key day

While optimism surrounding soft Brexit helped the GBP/USD pair to rise on the previous day, the Cable retraces to 1.2165 amid initial Wednesday morning in Asia. The UK PM’s visit to Germany will be closely observed.


USD/JPY: Dollar's progress stalls on softer US yields and weakness in stocks

The USD/JPY snapped a three-day winning streak on Tuesday with a bearish engulfing candle, as the US treasury yields fell. Notably, the US two-year Treasury yields dropped from 1.52% to 1.49% on Tuesday and the benchmark 10-year yield from 1.59% to 1.55%.


Gold: Bulls cheer pullback from 10-day EMA

Following its successful bounce off 10-day exponential moving average (EMA), Gold takes the bids to $1507 during the early Asian session on Wednesday. The yellow metal now heads to Friday’s high around $1528 ahead of questioning the monthly top surrounding $1535.

Gold News

FOMC Minutes July 30-31 Meeting Preview: The Fed vs the markets

The Fed policy that switched to neutral in Jan completed the circle last month with first decrease in the base rate in more than a decade from a 2.50% upper target to 2.25%. Markets expect a second cut at the September 18th FOMC.

Read more