Japan’s Contraction Deeper than Thought

by Vivian Atud

Johannesburg- Sunburst Africa–According to a report released to the stock market in Japan today Japan’s recession is deeper than initially estimated. Gross domestic product (GDP) fell an annualized 1.9 percent in the third quarter, more than the 1.6 percent estimated by analyst last month. As Japanese voters prepare to head to the polls on Dec. 14, the focus will be on economic policies. Recently, the Prime Minister Shinzo Abe decided to delay a sales-tax increase by 18 months and call a vote after the initial estimate of GDP showed the economy contracted in the September quarter. The Japanese central last bank last month kept a pledge to expand the monetary base at an annual pace of 80 trillion yen ($682 billion). Investors on the JSE today will be expected to continue to trade cautiously as they await three sets of data to be released by statistics South Africa (StatsSA). Data to be released to the markets today in South Africa include: land Transport Survey for October, 2014; Food and beverages October, 2014; and Tourist Accommodation for September 2014. The markets expect these data sets to show significant improvement from last month. However, one should expect the JSE to trade cautiously in the early hours of trade today as the market await these data.

On the other hand, the JSE might trade high this morning as it tracks gains from the Asian markets. The Asian stocks are trading high this morning following the U.S jobs report and a fall in Japanese and other Asian currencies. U.S. employers added 321,000 workers in November, marking the 10th straight month that employment increased by at least 200,000, the longest such stretch since 1995.

According to economist at Atud and Associates “the strong positive sentiments from the U.S jobs data will continue to raise expectations among equity traders that the U.S FED will soon raise interest rates. This will cause investors to continue to trade cautiously”.

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