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19 May 2014
Japanese releases points to sustainable recovery - BTMU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, observes that recent Japanese indicators allow to think about a sustainable recovery.
Key Quotes
"In contrast, economic data released overnight from Japan proved stronger than expected revealing that core machinery orders surged by 19.1% in March ahead of the sales tax hike. As a result core machinery orders increased by 4.2% in Q1 accelerating from growth of 1.9% recorded in Q4 2013."
"Machinery makers do not anticipate a further acceleration in Q2 estimating that core machinery orders will increase by only 0.4%. Still the report adds to evidence revealing that the outlook for capital investment does appear to be brightening."
"It follows the release last week of the Q1 GDP report which revealed that the Japanese economy expanded by a robust annualized rate of 5.9% in Q1. The main upward surprise was capital investment which increased by 4.9% which was the fourth consecutive quarter of expansion."
"It is an encouraging development supporting the sustainability of the economic recovery in Japan. The BoJ are expected to maintain an unchanged monetary policy stance in the week ahead with the probability of further monetary easing being delivered in the near-term having declined. With yields outside of Japan also still under downward pressure, the yen is likely to remain on a firmer footing in the near-term."
Key Quotes
"In contrast, economic data released overnight from Japan proved stronger than expected revealing that core machinery orders surged by 19.1% in March ahead of the sales tax hike. As a result core machinery orders increased by 4.2% in Q1 accelerating from growth of 1.9% recorded in Q4 2013."
"Machinery makers do not anticipate a further acceleration in Q2 estimating that core machinery orders will increase by only 0.4%. Still the report adds to evidence revealing that the outlook for capital investment does appear to be brightening."
"It follows the release last week of the Q1 GDP report which revealed that the Japanese economy expanded by a robust annualized rate of 5.9% in Q1. The main upward surprise was capital investment which increased by 4.9% which was the fourth consecutive quarter of expansion."
"It is an encouraging development supporting the sustainability of the economic recovery in Japan. The BoJ are expected to maintain an unchanged monetary policy stance in the week ahead with the probability of further monetary easing being delivered in the near-term having declined. With yields outside of Japan also still under downward pressure, the yen is likely to remain on a firmer footing in the near-term."