More responses to Japan’s Q4 GDP data earlier in the day

The Japanese economy grew for eight straight quarters as of Q4 2017

The release was covered by Eamonn earlier here.

Annualised GDP grew by 1.6% y/y, which topped estimates, but economists are not convinced that such growth will be sustained at such a pace in the coming quarters:

Takashi Shiono, economist at Credit Suisse

“I think it’s likely we are going to see some deceleration in the pace of economic expansion. Wages aren’t rising much and that makes it unlikely households will step up spending. A strong yen is posing risks for corporate profits and could cool sentiment among companies and consumers”.

Yasunari Ueno, chief market economist at Mizuho Securities

“Considering the first quarter this year, given how the yen is strengthening, it’s hard to see a continuation of the picture of manufacturers leading record profits, and we’re already seeing the beginning of a stumble in the fourth-quarter data”.

Their main concern appears to be the rise in the Japanese yen. Year-to-date the Japanese yen is the best performing major currency by quite a margin, and has even advanced almost 6% against the US dollar – and we’re only at the start of March.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *