On Monday 15 of February, the Japan Statistic Institution declared the GDP data in quarter IV / 2020. It could be seen that the value increases by 3.0 percent in a quarter-over-quarter condition. Is that the better progress? The answer is for sure a yes. 

That number is maybe better than the forecast of 2.3 percent rises. However, the Japanese economic growth is experiencing a lower speed. It is especially after making the rise progress and reached for about 5.3 percent in the last quarter.

Meanwhile, the yearly or annualized Japanese economy grows by about 12.7 percent. That happened in the IV / 2020 quarter. This number is beyond the expectation for an increase of 9.5%. However, that also notes some other new things.

What the Analyst Said

In fact, the annualized Japan economic growth also decline than the quarter GDP achievement which was reached before. The past level was increasing by 22.9 percent. Analysts thought that Japan's economic recovery for the last 2020 quarter is slow.

It is caused by the Japanese household and business sector which are not yet completely free from the pandemic. It is especially for the economic impact. The biggest effect can be seen in the domestic market. How is the economic growth so far?

Based on thE data, the Japan Economic growth during the period of October – December 2020 was more supported by the rebound of global demand. That push the increase of manufacturing activities in that country. Meanwhile, the export sector is still positive.

Why? It is because they are able to cover some weaknesses in the domestic demand. Until now, the export sector and Japan GDP is still highlighted by the market participants. The information can be a reference to take an action ahead.

The External Demand GDP Is a Sign Of a Better Export Sector

The better condition of Japan's export sector in the quarter of IV / 2020 can be seen from the External demand GDP. That sector is up by 1.0 percent. However, that number is smaller than the 2.7% growth which was happened in the past quarter.

The slowdown can be also seen on the price sub-indicator which only grows for 0.2 percent along the IV quarter. That decline was quite sharp since the last achievement is 1.2 %. Besides that, the private consumption sub-indicator also has a contribution.

It contributes to more than half of the Japanese economy and it increases by 2.2 percent. It is slowing down since the last increase was 5.1 %. Although it experiences a slowdown, the private consumption growth is still better than forecast.

For your information, the forecast is only rising by only 1.8%. Overall, the Japanese economy in the IV / 2020 quarter is still on the continuous recovery trend. It is especially from the pandemic impact. Pandemic made the economy fallen down sharply last year.

Yen Is Weaker to Dollar

The decision made by the government to apply the lockdown rule in January has been increasing the possibility of recession again. It may obscure the prospect of a fragile recovery. How about the update of GDP release in Japan lately?

Based on the data in the market, yesterday morning's GDP data release in Japan was quite positive. However, it does not have any significant impacts on Yen to high dollar. When this news was released, the USD / JPY pair is around 105.05 level.

It means that the currency pair was strengthening by 0.3 percent from the daily open price. Both of them are having a safe-haven status, but the USD is more liked by the investors. It is especially amidst the rising of US yield treasury in the last few days.