The Japanese economy has been wrought with severe downswings over the past several weeks following the disastrous earthquake and tsunami which struck the island on March 13. Industrial production figures, consumer spending and consumer confidence have all plummeted since the event and many have been speculatively short on Japan as a result, but today’s news may have helped Japan turn a corner.
Today’s early morning release of core machinery orders by the Japanese Cabinet Office revealed a rather shocking figure. Given the stark industrial data published out of the Japanese economy over the past month, expectations for this morning’s machinery orders was for a 9.7% decline, down from last month’s 1.9% decline.
Interestingly enough, the core machinery orders figure came out well above expectations and actually revealed expansion instead of contraction. The report came in at 2.9% for the month of April and was further supported by the Bank of Japan’s (BOJ) corporate goods price index (CGPI) which also showed a 2.5% growth, year-on-year, for inflation of corporate goods.
The data signals a possible turnaround point for the Japanese economy and shows that the island nation is well into a recovery from its March 13 disaster, despite speculation to the contrary. The Japanese yen continues to show mixed results, however, with growth seen against higher yielding currencies like the euro (EUR) and British pound (GBP), and minor losses versus the US dollar (USD) and Swiss franc (CHF).
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Greg Holden is the Chief Market Analyst at ForexYard. Greg uses his detailed knowledge of fundamental and technical analysis to provide some of the leading market forecasts in the forex world today. A guest lecturer at forex symposiums and Chief Editor of ForexYard's analysis center, Greg brings highly detailed and easy-to-use market analyses to his clientele. He has been published on ForexYard's Trading Blog and affiliate websites. Greg holds degrees in Political Science and Economics from Missouri State University, as well as a Masters degree in Middle Eastern History.
