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Japan’s Overburdened Economy Further by Flooding

Daily Analysis - 22/08/2016

Japan’s economy appears to be slowing down as GDP reports point out. The earthquakes that flooded the country recently continue to weigh heavily on Japan while the strong Yen and the slowdown in China are just adding more to the burden. Private consumption is keeping Japan on life support whereas new policies imposed by both the central bank and the government are expected to revive the economy and hopefully help it reach its inflation mandate.

Last Week

Last week, the sterling pound regained approximately 1.55% over its loss versus the post-Brexit Euro, due largely to inflation and retail sales that were announced at values higher than what was forecast. Warm weather in July has raised clothing sales whereas the weakness of the Pound also helped in lifting inflation – with commodity prices trending higher as compared with the first quarter. Bank of England Governor Mark Carney cited that inflation is expected to climb over the coming months.


The Upcoming Week

Coming later this week, final estimates for GDP values for the UK will be announced on the 26th of August after having preliminary data report a rise of 0.60% over the second quarter. The initial data indicated a pick-up of activity occurring in April and May while June cooled off from prior months. With fears of a recession, the Bank of England has acted accordingly to mitigate the effects of the Brexit referendum by slashing rates by 25 basis points and also expanding quantitative easing program by 60 billion Pounds.


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