Japan’s GDP Posts a Surprising High, but There’s Reason to Worry

The Japanese economy registered a 2.1% growth annually in Q1 2019, beating expectations which were for a 0.2% decline


Data released on Monday reveals that the Japanese economy registered a 2.1% growth annually in Q1 2019, beating expectations which were for a 0.2% decline. It also came in higher than the revised growth rate for Q4 2018, which stood at 1.6%.

The higher numbers have taken the markets by surprise, but a closer inspection reveals that all is not well in Japan. The unexpected expansion in the economic growth comes on the back of declining imports, on account of weaker demand among consumers in Japanese markets.

Imports declined by 4.6% in Japan, even as exports fell by 2.4% during this period. This has been the fastest rate of decline in imports witnessed in the past ten years. This becomes even bigger a concern at a time when PM Shinzo Abe was considering a hike in sales tax to be put into effect in October.

Economists are expecting the Q2 GDP to come in at zero or decline because exports are set to remain anemic. With domestic demand declining faster than exports, will he be forced to delay his decision?

USD/JPY is trading slightly bearish, even though it remains above the 110.00 level, touching 110.220 at the time of writing.

ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

Related Articles

Comments

0 0 votes
Article Rating
Subscribe
Notify of
0 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments

HFM

Doo Prime

XM

Best Forex Brokers