CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Strong growth posted by Japanese economy

Article By: ,  Financial Analyst
May 15, 2014 12:45 PM

Japan's economy grew by 1.5 per cent in the first three months of the year, beating expectations, according to the release of new official data.

The Asian nation revealed that between January and March, GDP was up by 1.5 per cent, which is significantly above the one per cent prediction many industry commentators had suggested.

One of the reasons behind the strong rise in the Japanese economy at the start of the year was a rush in consumer spending, prompted by the introduction of a new sales tax that came into force on April 1st.

"Japan's economy expanded rapidly ahead of the sales tax hike, but is set to slump thereafter," Marcel Thieliant, Japan economist at Capital Economics, told BBC News.

"Looking ahead, the economy will certainly contract in the second quarter of the year, as consumers rein in spending after the tax hike, and residential investment is set to plunge."

Spending up

Consumer spending was up by more than two per cent over the course of the quarter, perhaps indicating that the sales tax did have a pronounced impact on GDP between January and March.

Japanese prime minister Shinzo Abe has implemented a wide range of policies designed to boost the economic growth of the Asian nation, with many commentators dubbing his plan Abenomics.

Bill Adams, senior international economist for PNC Financial Services Group, predicted that the second quarter will now see a contraction in the Japanese economy as it shrinks back from the strong gain posted in the first three months of the year.

"Japan's imports continued to grow faster than exports in the first quarter, as they have in each of the preceding two quarters," he said.

"Abenomics has boosted Japanese import demand more than the weaker yen is boosting Japan's exports."

A weak yen is typically good news for major exporters that are based in Japan, with some of the country's biggest companies benefiting in the last 12 months as a result of the currency's value against global rivals such as the US dollar.

Learn about the Asian markets and CFD trading at City Index

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024