On Tuesday, the statistic institution of Japan published the IV/2020 quarter of GDP data. The annualized growth was revised to 11.7. That number was under the growth expectation of 12.8 percent and lower than the release before. That was quite surprising.
A similar revision can be also seen in the quarter-over-quarter base where the GDP growth was also experiencing any adjustments from 3.0% became 2.8%. For comparison, the III quarter of Japanese GDP still noted an increase of 5.3%.
The hampered economic track in Japan in the last quarter of last year is caused by the corporate conscience in their capital spending needs. Mostly, it is because of the coronavirus pandemic. The decline in that aspect can be seen clearly.
Percentage of the Capital Spending
Based on the data, the capital spending was down from 4.5 percent to 4.3% in this quarter. Meanwhile, corporate consumption was noted at 2.2 percent. It means that the consumption increased based on the expectation. It is not the only challenge.
This year, the Japanese economy will get other new challenges. This follows the release of household spending data which fell by 1.6% in January. It reflects the economic condition which is still too far from the recovery of pre-COVID.
Some analysts worry that the gloomy conditions in Japan's corporate investment and household spending sectors could last longer than expected. Both of them can become a bad sign for the demand sector which could threaten Japan.
That third-largest economic country may not have domestic supporters. Based on the negative economic prospect, the Central Bank of Japan may re-check its monetary policy. That will be done in a meeting which is held next week.
The USD / JPY Bullish is Uncontrollable
The aim of an action done by the Central Bank is to make their policy is more effective and sustainable amidst the effect of the pandemic which is not totally gone. Meanwhile, the release of quarter IV / 2020 Japanese GDP data weighing on the Yen’s movement.
The USD / JPY pair is now around 109.11. It is stronger by 0.26 percent from the daily open price. In the last few years, the US dollar was significantly stronger than to Yen. The cause is the jump of the US treasury yield obligation.
It triggers the investors to release Yen and choose Dollar more. For your information, on Wednesday Westpac published the Australian consumer sentiment data which is at the level of 111.8 in March. It increases by about 2.6%.
That increase makes the consumer sentiment moves closer to its highest record in yen years which was touched in December last year. Mostly, that was supported by the successful effort done by the government to handle the coronavirus.
The statement of the Australian Government
The increasing optimism is also caused by the promise stated by the Australian government. They will be completing vaccination as soon as possible. That pumps the growth of the positive sentiments. The consumers’ optimism due to the Australian economy also increases.
That can be seen from the sub-index of the economic condition for the next 12 months. That increases from 109.8 to 113.8. Meanwhile, the next 5 years' economic situation also rises from 116.2 to 118.9. The optimism also happens in the employment market.
The sub-index of unemployment expectations decline from 114.5 to 112.0. It means that only fewer consumers hope that unemployment rises up this year. On the other side, they are still doubting buying the house and make it an investment.
However, the data release above is not the only positive catalyst for the Australian Dollar movement this day. Vice versa, the AUD / USD pair is sold around 0.7703 or weakened by 0.14 percent from the daily open price.
