JSW Corporation: Japanese gross domestic product (GDP) came in flat for the April-June period coming in at zero according to official data. The reading missed economists’ forecasts for a quarterly increase of 0.2% and prompted calls for more central bank and government stimulus to revive the country’s fragile economy.
Japan’s economy continues to be hampered by low growth and falling prices despite efforts by the Bank of Japan, the country’s central bank, to reinvigorate it with record monetary stimulus. Recent moves by Prime Minister, Shinzo Abe’s government to introduce fiscal stimulus did not come soon enough to make a positive impression on the data but it is hoped that it will be reflected in third and fourth quarter GDP growth figures.
Japan’s stock indices gave a muted response to the data with the benchmark Nikkei 225 slipping by just 0.2% but the dollar-yen currency pair showed the yen strengthening mildly
“Our view is that the recent stimulus package unveiled by Shinzo Abe will be insufficient to move the GDP needle by any significant degree but it’s a start” explained Vivian Wang, Chief Economist at JSW Corporation.
“We’re largely in agreement with suggestions that the Bank of Japan has effectively reached the end of what can be achieved by monetary stimulus and we expect fiscal measures to do more of the heavy lifting in the coming quarters.”
In a research note to clients last week, JSW Corporation noted that there would be more to come from the government and that investors should remain vigilant for attractively-priced Japanese equities particularly those in the country’s key exporters.

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