


Japanese Economic Update – 18 May 2015
NIKKEI carries out renewed assault on the 20,000 level as economy muddles through
Japan’s NIKKEI renewed its earlier assault on the 20,000 level at the opening of the current week, just a short time away from the release of Q1 GDP figures, the BOJ monetary policy statement and a volley of additional economic data.
All of the available information at present continues to indicate modest growth in domestic consumption and business investment, although exports and industrial production remain sluggish.
It is this muddling through impression provided by economic barometers that is likely behind official projections for the annualised pace of growth to have risen mildly from 1.5% in the fourth quarter of 2014 to 1.6% in Q1 of the current year.
While such numbers don’t exactly merit a standing ovation they are likely to prove sufficient enough to ensure that the BOJ maintains its upbeat tone on the economy at this week’s press conference.
This will undoubtedly be positive for the Japanese yen and it could also take some of the wind out of the sails from the equity market, although we still see scope for the NIKKEI to push higher later on in the year.
This is because with a recovering economy set aside, Japanese equities are likely to continue to draw support from the fact that for many institutions and individuals, they remain much more preferable alternative to JGB’s.
NIKKEI 225 / 8 Hour Intervals

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