Export Growth Expedite the Economic Growth in Japan

Thursday, May 20, 2010

After the First World War the second largest economy of the world Japan faces the worst recession and now it is soon getting recovered by going on the right path to raise the economy from the first quarter of the current year. We all know that exports are the beam of the economy of the world. Due to the weak economic expansion the economy is facing the risk of deflation that threaten the recovery of Global world economic recovery.

In the first quarter of the year the Japan exports rises to 6.9 percent and this is the key reason of the economic recovery of the world's largest economic country Japan. Past three months the economic recovery of Japan boosted the wages and labor market that mainly contributing the recovery process.
Last year, the GDP growth of Japan is 0.9 percent calculated in Q4 and in this year in Q1 only the GDP growth leads to 1.2 percent in comparison to the past year recovery.

The market experts predicted the raise of 1.4 percent from the past year to this year but finally it was revised by 1 percent. If the total GDP growth be estimated it will be 4.9 percent in this year as compared from the past year it was only 3.9 percent. While the market analysts anticipates that GDP growth of this year leds to 5.5 percent.

Japanese exporters was mainly affected in past year by the manufacturing in China speed-up due to the high demand of exports from China leads to deficit of exports in Japan which ultimately hinders the economic recovery. Nissan, the Japan's largest automaker is affected majorly by the China's export growth, it triples the profit of Japan exports while the sales rise.

Today's report cherish the Government and also leads the exports demand from the BOJ that will ultimately throb the deflation rate in Japan. Report says that the consumer spending that is wages and labor market both leads to the fifty percent of the growth rate of Japan raise the 0.3 percent in the Q1 from the past year Q4. It is surveyed that from past 22 months it was the first time that the increment in wages are shown in Japan.

The economic recovery in Japan favor's the manufacturing companies that will result good in coming days, that is Nissan group is making plans to spend the major part of its capital into buying the new technology equipments for leading the footstep with this world. This will rose the job openings and more number of people will be engaged in working that ultimately raises the demand for goods, provides relief to the economic condition of Japan.

The BOJ had decided to fix the interest rate to 0.1 percent that supports the policymakers to fight against the deflation rate. This will help in recovering from the Global world's economy because of the increase in demand of exports from Japan which leads to rebound of manufacturing companies in Japan.

Since the Japan's economy results less as estimated by the experts of the forex online market benefits the EUR/USD currency pairs trading and it reaches to high level of 91.78. It happens due to the failed export recovery along with the less consumer spending. BOJ is in pressure after the two days meeting to decrease the deflation rate in Japan. The Government continues in their expectations from BOJ to do something better in order to reduce the deflation rate but the BOJ is not willing to change its policies after seeing the GDP growth rate.

In terms of Technical analysis it is estimated that the GDP rate of Japan rises to 4.9 percent in past three months till March it was 4.2 percent and was expected to be 5.5 percent from the experts. There was a rise in consumer spending of 0.3 percent in first quarter of this year that was 1.7 percent in the past year's quarter four. There was a lead in housing investment is shown after the continuous five quarters of 0.3 percent. This was the first increment shown in the housing investment while in business investment the past rise was of 1.3 percent where as morning results shows gain of 1 percent. After getting all these results the BOJ holds a two day meeting to and also decided to keep the interest rate to only 0.1 percent and it may be expected to announce the leading plan in today's meeting.

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hyip May 21, 2010 at 11:11 PM  

I think is true that the Japan's largest automaker is affected majorly by the China's export growth; it triples the profit of Japan exports while the sales rise.

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