Japan’s economy expanded an annualized 0.2% in the April-June quarter, compared with a 0.7% expansion forecast by 20 economists surveyed by The Wall Street Journal. The yen held gains as gold and government debt advanced.
The Indian and the South Korean markets remain closed for public holidays.
Data indicated that Japan’s economy stalled in the April-June quarter, causing it to miss market forecasts and rekindling worries about the government’s faltering bid to stoke a recovery.
USA crude rose for a third day, while nickel tried to rebound from its worst rout since early July.
Despite the implication that Monday’s pessimistic GDP data may lead to even more stimulus measures than have already been implemented or announced, the Japanese yen was not significantly affected by the economic data release.
WALL STREET: After a record-setting week, shares were essentially flat on Friday as investors focused on recent company earnings and data showing USA retail sales were more sluggish than expected in July.
What’s more, our underlying managers continue to report positively on the health of the Japanese corporate landscape.
Mizuho Securities senior economist Norio Miyagawa said: “Overall, it looks like the economy is stagnating”.
“Still, weak numbers mean concern over tightening recedes”, he said.
To boost growth Japan earlier this year put together an economic stimulus package totaling ¥28.1 trillion, which includes ¥7.5 trillion in real fiscal spending over the next few years, in order to overcome years of deflation and raise the economy’s near-zero growth potential. The Nikkei stock index was down slightly 0.2 percent after the data was released.
The MSCI’s broadtest index of Asia Pacific has been going up to a record of nearly 14 percent since the last quater of June. Hong Kong’s Hang Seng index rose 0.7 percent to 22,932.51 and Australia’s SP ASX 200 added 0.2 percent to 5,540.00.
“The road ahead may be bumpy but Asian equities ex-Japan are relatively undervalued, under owned and under appreciated”, Vasu Menon, vice president for wealth management research at Oversea-Chinese Banking Corp.in Singapore, said by phone.
But others see a positive side, accounting for the leap year. The greenback was little changed at 101.340 yen after losing 0.6 percent on Friday, when the US indicators were released.
Meanwhile, the July reading of the producer price index showed a decline of 0.4%, the largest drop since September 2015 and confounding expectations of a 0.1% gain.
The dollar was little changed at 101.29 yen and not far from important support around 100.80. The Australian dollar was flat at $0.7646. Brent crude, used to price worldwide oils, added 42 cents to $47.39 a barrel.
In commodity markets, oil prices crawled higher after boasting gains of 6 percent last week as Saudi Arabia’s oil minister held out the chance of action to help stabilize the market.