Japanese economy exits from recession

Monday, February 16, 2015

Asian equities climbed higher overnight as Japanese benchmark indices rallied to a seven year high with the Nikkei 225 adding 0.51% and the TOPIX gaining 0.69% after the latest data showed the country had emerged from recession. Despite Q4 GDP data missing consensus estimates of a 0.9% q/q growth rate according to a survey by Bloomberg, preliminary data released over the weekend indicated that Japan’s economy grew by a seasonally adjusted 0.6% q/q during the fourth quarter of 2014, registering a strong rebound from the previous quarter’s revised figure of -0.6% q/q.

The Japanese yen gained further ground against the dollar, posting gains for a third straight session during overnight trading as the currency traded towards 118.18 early on before trading back above 118.60 towards the European open. Encouraging industrial production data released early this morning offered further support to the yen against the dollar and with US data towards the end of last week largely disappointing market participants and the view that the Bank of Japan will hold off from any additional stimulus measures could provide further upside to the yen in the coming sessions.

Greece and its creditors extended talks over the weekend ahead of today’s meeting of eurozone finance ministers as officials on both sides rushed to reach an agreement regarding the renegotiated terms of the Greek bailout. With Alexis Tsipras still unwavering in his commitment to end the rule of austerity in Greece which has dominated the agenda for the past few years a stalemate between Greece and Germany, their most vocal adversary, has seen progress slow considerably. Time for a fresh bridge agreement to tide them over for the next six months is quickly running out and before any new deal can be struck the issue of short term debt financing will need to be addressed. The euro was able to maintain support around Friday’s with activity early on this morning seeing the shared currency trade towards 1.1420 early on.

Japan's Q4 GDP reading bounces back

JGDPQGDP Index Japan GDP Real C 2015 02 16 07 42 04

JPY continues to strengthen against USD

JPY Curncy Japanese Yen Spot 2015 02 16 07 42 21

EUR finds firm support around Friday's close

EUR Curncy Euro Spot Daily 16 2015 02 16 07 57 44

Events for today

US Market Holiday 

JP

Q4

GDP (15/02/15)

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UK

Feb

Rightmove House Prices

Topics: GDP, EUR, JPY, BoJ
More from: Kash Kamal