Talking Points:
- Japan’s first-quarter growth figures were revised sharply lower
- From a perky 2.2% gain annualized gain, expansion is now held to be just 1%
- The Yen, however, was not fazed. International risk events seem to be driving.
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The Japanese Yen was perhaps surprisingly steady in the wake of a sharp downward revision to its home country’s official Gross Domestic Product data Thursday.
Growth is now judged to have been 0.3% on the quarter, down from the 0.5% previously estimated and well short of the 0.6% expected. Annualized growth was revised down massively too to 1% from an initially reported 2.2% gain.
All up this was a very shabby print, which probably should have weighed more heavily on a currency which, in the event, barely moved. Asian markets appear to be hunkered down for a couple of major international risk events Thursday, which will include a crucial UK general election, and the wait may well be limiting trade.
The doleful GDP revision came as part of a substantial Japanese data dump, not all of which was as gloomy. The April current account balance of payments came in at JPY1951.9 billion, (US$17 billion), which was about JPY300 million higher than expected.
Bank lending for May rose 3.3% on the year, stronger than the 3% which markets had been looking for.
Overall this was another mixed set of numbers for the world’s third-largest national economy. The first quarter’s growth was clearly much weaker than had been expected, but there remains some scope to hope that things have become a little better since.
Newswires report that the view of Japan's Cabinet Office after these data is that the country remains in "moderate recovery." This is the phrase by which it has characterized economic activity for much of this year.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
