(07 October 2019 ) DAILY MARKET BRIEF 2:Recession Risk Rising In Japan - Market News - 7 October 2019


The latest updates on the front of the US – China trade dispute have again given safe haven JPY a boost as China appears willing to
narrow down the scope of upcoming trade talks taking place on Thursday and Friday 10 – 11 October 2019 in Washington. This should pave the way
for tariffs hike from current 25% to 30% on USD 250 billion imported Chinese goods on 15 October 2019 and therefore intensify tit-for-tat
sanctions from both sides, thus favoring a long-JPY bias by the end of the week. Meanwhile, the economic assessment downgrade of the
Japanese government to “worsening” following the release of its business condition indicator confirms that the Japanese economy
probably turned into recession as the new US – Japan partial trade deal signed only covers a small portion of existing bilateral trades

Since its initial statement that the Japanese economy is recovering at a moderate pace thanks to a solid domestic demand, the government
is likely to change its stance as the sales tax hike from 8% to 10% implemented in 1 October should depress Japan’s private consumption and
therefore worsen its outlook. The coincident index, which provides an evaluation of the health of the economy by computing data on
industrial production, retail sales and employment, fell to 99.3 (prior: 99.7) in August, marking to August 2016 low. In that context,
Japan’s quarter-on-quarter 3Q GDP figure released on 14 November should confirm a slowdown from 2Q 0.30%, paving the way to an increase in
government spending and BoJ policy easing amid a potential technical recession by year-end. Further negotiations on US – Japan trade
should continue as the existing agreement is mainly focusing on US beef and pork exports to Japan, omitting major topics such as Japanese
auto, aircraft, or semiconductor manufacturing.

By Vincent Mivelaz



Source link

Register at Binance

(07 October 2019 ) DAILY MARKET BRIEF 2:Recession Risk Rising In Japan - Market News - 7 October 2019
(07 October 2019 ) DAILY MARKET BRIEF 2:Recession Risk Rising In Japan - Market News - 7 October 2019
(07 October 2019 ) DAILY MARKET BRIEF 2:Recession Risk Rising In Japan - Market News - 7 October 2019
(07 October 2019 ) DAILY MARKET BRIEF 2:Recession Risk Rising In Japan - Market News - 7 October 2019
(07 October 2019 ) DAILY MARKET BRIEF 2:Recession Risk Rising In Japan - Market News - 7 October 2019

(07 October 2019 ) DAILY MARKET BRIEF 2:Recession Risk Rising In Japan - Market News - 7 October 2019

(07 October 2019 ) DAILY MARKET BRIEF 2:Recession Risk Rising In Japan - Market News - 7 October 2019