Japan is the
third-biggest economy in the world with a GDP of almost $5 trillion. The
country is behind the United States and China, which have a combined GDP of
almost $40 trillion. This week, investors will focus on the Japanese economy as
they receive important data.
Today, the country
released the GDP data for the first quarter. In the first quarter, the economy
expanded by 2.1%, which was higher than the expected decline of -0.2%.
Previously, data had shown that the economy expanded by 1.6%. On a quarterly
basis, the economy expanded by 0.5%, which was higher than the expected decline
of -0.1%. The GDP capital expenditure declined -0.3%, which was lower than the expected decline of -1.7%. The external
demand rose by 0.4%, higher than the expected 0.3%. The industrial production
declined by -0.6%, which was better than the expected decline of -0.9%. These
numbers show that the economy is doing well.
On Wednesday, investors
will receive the trade data and machinery data. The trade surplus is expected
to decline to 203 billion yen, from the previous 528 billion yen. This is
because imports are expected to jump by 4.8% from the previous 1.2%. Exports on
the other hand are expected to decline by -1.8%. The core machinery orders are
expected to decline by -3.4% from the previous decline of -5.5%.
On Friday, the country
will release the CPI data. The numbers are expected to show that the CPI rose
by 0.9% in April. This will be slightly higher than the previous increase of
0.5%. The national core CPI is expected to jump by 0.9%.
In addition to all these,
the yen, which is viewed as a safe haven currency will likely move as the trade
war and the tensions with Iran escalate.
In the past few days, the
USD/JPY pair has been on an upward trend. The pair has moved from a low of
109.05 and today, it reached a high of 109.33. This price is above the 50-day
and 25-day moving averages. The RSI is close to the overbought level of 70.
There is a likelihood that the pair will continue moving up, to test the
important support of 111.
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