The Japanese economy showed weak growth in Q1 2016. However, the results of the recent survey conducted by Reuters showed that Japan managed to avoid an economic recession this time. The economic growth in Japan has been curbed by weak demand as well as a relatively strong national currency. At least, this is what the respondents think on the matter.
The survey shows that the experts expect the Japanese GDP to have grown by 0.6% in Q1 2016 year over year. For the sake of comparison, the GDP shrank by 1.1% in Q4 2015. As for the quarter-over-quarter figures, the GDP is expected to have gained 0.1%. This expectation looks pretty optimistic given the 0.3% GDP drop seen a quarter before amid weak investments in residential property as well as private consumption.
All in all, there were 12 experts participating in the survey. The respondents expressed their opinion that such weak a weak increase may be triggered by an extra day in February this year. If to ignore this factor, they assume that the economic growth may well be around the zero level or even below it. This has to do with the fact that some components of the Japanese GDP have been showing negative performance over the past few months.
Consumer spending is one of the key concerns to the respondents when it comes to the economic performance in Japan. It has been dropping continuously ever since the introduction of hiker sales tax in the early 2014 financial year. At the same time, a stronger yen and weaker foreign demand amid concerns over corporate income are creating uncertainty regarding capital spending.
Forex
In the meantime, the Japanese Yen keeps on rallying within the scope of the same long-term rally against the U.S. Dollar, Masterforex-V Academy reports. This means that USDJPY is going down. To be more specific, USDJPY is going down within the scope of wave 3/C of level Weekly2. There is a minor wave inside the mentioned move. This is wave 5 or a part of the “Hound of the Baskervilles” pattern by Elder/MF.
The closest major levels of support are such Fibo levels as 106.16, 105.46/26, 104.36. Alternatively, a break above the top of the descending MF sloping channel and MF pivot 111.88 is going to complete the existing tendency.
