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15 May 2014
Positive Japan's Q1 GDP positive for JPY - RBS
FXStreet (Bali) - Japan GDP shows strength in business investment and trade volumes, notes Greg Gibbs, FX Strategist at RBS, a development that in his view, is somewhat supportive for the interest of Yen buyers.
Key Quotes
Japan's Q1 GDP rose 1.5%q/q, significantly stronger than the 1.0% expected, although this data would have been more difficult to forecast than usual due to the drawing forward of expenditure ahead of the April consumption tax hike. From a year earlier, GDP rose 4.1%y/y.
The stronger result appears driven by business investment, which rose 4.9%q/q, above the 2.1% expected, and it was revised up from 0.8%q/q to 1.4%q/q in Q4. From a year earlier, business investment rose 8.4%y/y.
Consumer spending in Q1 rose 2.1%q/q, as expected, up 3.5%y/y. Public demand contracted 0.4%q/q, up 3.5%y/y.
Net exports contracted 0.3% from GDP, with strong 6% growth in exports offset by a bigger 6.3% rise in imports.
The strength in business investment and volume of exports will be viewed as a positive sign for the longer-term outlook for growth and a point of success in the policy direction of the government and central bank. And thus is somewhat supportive of the JPY.
Key Quotes
Japan's Q1 GDP rose 1.5%q/q, significantly stronger than the 1.0% expected, although this data would have been more difficult to forecast than usual due to the drawing forward of expenditure ahead of the April consumption tax hike. From a year earlier, GDP rose 4.1%y/y.
The stronger result appears driven by business investment, which rose 4.9%q/q, above the 2.1% expected, and it was revised up from 0.8%q/q to 1.4%q/q in Q4. From a year earlier, business investment rose 8.4%y/y.
Consumer spending in Q1 rose 2.1%q/q, as expected, up 3.5%y/y. Public demand contracted 0.4%q/q, up 3.5%y/y.
Net exports contracted 0.3% from GDP, with strong 6% growth in exports offset by a bigger 6.3% rise in imports.
The strength in business investment and volume of exports will be viewed as a positive sign for the longer-term outlook for growth and a point of success in the policy direction of the government and central bank. And thus is somewhat supportive of the JPY.