Japanese GDP growth grew more than three times faster than previously reported in the second quarter, based on a new release. GDP increased 1.5% year-over-year from April to June, which represents an enormous change from the 0.4% figure previously estimated according to AP.
The latest data still represents a growth slow-down from the 5% GDP growth rate recorded in Q1, but nobody expected Japan to maintain that rate.
The Nikkei is surging, up over 1.5% right now.
What’s funny however is that this huge GDP surprise comes at a time when Japan is trying to coerce the world that a strengthening yen is an existential threat to the Japanese economy.
Thus you get the sense that they are in the awkward position of playing down what has been a more than 200% hike to their latest reported GDP growth rate. Meanwhile, they continue to complain about the strengthening yen, which is the equivalent of complaining about surging demand for your currency.
“Although the economy continues picking up and movements towards a self-sustaining recovery are seen, the environment has become more severe recently. In addition, the economy remains in a difficult situation, with a high unemployment rate,” the government said in its monthly report for September.
“In the medium- to long-term, foreign exchange rates have both positive and negative effects but a rapid appreciation of the yen in the short period of time is a downside risk, which should require a sense of crisis,” Keisuke Tsumura, parliamentary secretary of the Cabinet Office for economic and fiscal policy, told reporters.
Yes, the yen’s latest strengthening trend accelerated since June, which means Q2 was mostly spared and Q3 GDP could be impacted. But the latest 200%+ hike to Q2 GDP growth means Japan has far more of a cushion to withstand the yen’s blow than previously thought.
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