Japanese economic growth has a direct impact on other Asian economies. So all eyes are on Japan as it will release its monthly slew of data on 25th December, the Christmas day. The Japanese economy is expected to grow about 1.7 percent in fiscal 2016 starting next April, led by recovering consumer spending and solid capital investment, the government said on Tuesday.The overall growth forecast is more optimistic than that of the Bank of Japan, which projected real GDP growth of 1.4 percent for fiscal 2016.
Japanese gross domestic product will likely expand around 3.1 percent in the next fiscal year to around 518.8 trillion Yen ($4.3 trillion), the highest level in 19 years since fiscal 1997.Previous week, the Bank of Japan announced its plans to increase purchases of exchange-traded funds(ETFs) to $2.45 billion in firms that invest in physical and human capital to boost investment.Investors’ focus will turn to Japan this week, after an interest rate hike by the U.S. Federal Reserve.
Japanese Economic Growth – Quarter 3
Earlier, GDP in Japan advanced 0.3 percent on quarter in the three months to September of 2015, compared to an initial estimate of a 0.2 percent contraction. Major Japanese companies, excluding those in the finance sector, are expected to post a record combined net profit for the second consecutive year in fiscal 2015 on the back of lower oil prices and the weaker yen.
The big surprise in Q3( July – September) has definitely been Japan, with revenue growth at 5% year-on-year also beating expectations. Profit growth in Japan is the highest observed among the regions. It should be no surprise that Japanese equities have been the best performers in Q3, up almost 15% in Yen. On an annualized basis, the economy advanced 1 percent, compared to an initial 0.8 percent contraction and well above market expectations of a 0.1 percent increase.