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6 Oct 2015
Japanese economy to recover gradually from Oct-Dec – Nomura
FXStreet (Delhi) – Research Team at Nomura, expect a gradual recovery in Japanese economy from Oct–Dec, driven by Japanese demand amid improved income conditions and modest growth in capex but the external demand in Oct–Dec and beyond will be weak, owing to the economic slowdown in China.
Key Quotes
“On this basis, we look for real GDP growth in Japan of 1.1% q-q annualized in Oct–Dec, with acceleration to 1.6% in Jan–Mar 2016. In terms of fiscal policy, we assume now that the FY15 supplementary budget will contain around ¥3.5–4.2trn in government spending, of which around ¥1.5trn will be public investment. Turning to prices, the core CPI has risen by more than we had projected, despite energy prices recently being lower than we had assumed, and thus we have raised our core CPI growth forecast for FY16, from 0.8% to 0.9%.
Key Quotes
“On this basis, we look for real GDP growth in Japan of 1.1% q-q annualized in Oct–Dec, with acceleration to 1.6% in Jan–Mar 2016. In terms of fiscal policy, we assume now that the FY15 supplementary budget will contain around ¥3.5–4.2trn in government spending, of which around ¥1.5trn will be public investment. Turning to prices, the core CPI has risen by more than we had projected, despite energy prices recently being lower than we had assumed, and thus we have raised our core CPI growth forecast for FY16, from 0.8% to 0.9%.