Poor numbers of Japan prelim GDP q/q
The economy of Japan has contracted with
today’s declaration of GDP q/q with lower demand & exports
surrounding the economy. The numbers stood at -0.4% from the previous
declaration of -0.2%, which comes to almost 2 times the numbers.
Despite the poor declaration several
Asian markets have jumped to a record high of 7.3%, the major index of
japan: Nikkei 225 stood at 16,037 in trading session but weakening the
JPY in the FOREX market.
As the latest contraction have added to a
cause of worry with the Prime minister & monetary policy decision
makers for reviewing the policy to increase the inflation in the market.
The major slowdown is due to monetary policy easing, which proved
harmful to the economy & has added a new hindrance level.
While the BoJ (Bank of Japan) has
resorted to negative interest rate that holds the lending rate through
certain cash rich companies that generally appears to low borrowing cost
& certain cash rich companies. The growth rate has been stunted for
the slow increase in wages that is inclined. While the several
companies are still drawing that held an excessive capacity of growth
& has viewed shrinking & aging the home market that has been a
less attractive investment channel for the fastest growing economies in
the world specifically in the Asian market. The Consumer demand has
decreased than the expected forming a 5-year low in business investment
The BoJ needs to revive the tax in order
to boost their inflationary pressure. Despite being the several
loopholes in the market, the economy has increased to 0.3% last year as
they are near to achieve $7 trillion economy by the year 2025. In
regards to tax rate hike the corporate profits pressurize on the growth
While the JPY currency starts at a level
of ¥113.6 against US $, while some of the major economist sees a
potential growth in the economy while the traditional investors will
stay away from the financial market volatility that will add to pressure
on growth
