Japan's economy grows by 0.2% in June quarter
Markets Forex

2 Likes 0 Dislike 3 Replies
1 year ago

As per fresh data released recently, Japan's GDP practically remained stagnantduring the quarter ended June 2016 on a year-on-year basis compared to the previous year. As per the data, the Japanese GDP grew by only 0.2% during this quarter (year-on-year growth). In contrast, Japan's GDP had grown by 2% during the Jan-March 2016 quarter. Market analysts had expected year-on-year growth of 0.7% during the April-June 2016 quarter. During this quarter, Japan's exports and business investment both declined. As per some experts, the rise in the value of the yen has put pressure on Japan's exports. Following the data, the Japanese benchmark index, Nikkei 225, closed marginally lower.

In recent times, Bank of Japan (the central bank of Japan) and the Japanese government both have unveiled stimulus measures aimed at boosting growth in Japanese economy. However, there are questions regarding the effectiveness of these measures. 

What do you feel about this data? I would especially like to know if anyone here is long on the Yen or some other Japanese instrument. Please share your view.

Posted 1 year ago 0 Likes   0 Dislikes

You hit the nail on the head, Old Tom. Chasing news is often one of the surest ways of losing money in the markets. First of all, the markets often respond to unsubstantiated rumours rather than to confirmed news (and then correct themselves if the rumours prove to be false). Second, the markets may respond to very minute or obscure information which may not be available to all - this is especially true for retail traders. Third, the markets may respond to news that many traders may consider irrelevant. This list can go on and on. 

Ultimately, every trader wants to make money in the markets. To this end, we often try to use every single indicator, every single piece of information in order to try to get that perfect trade in. This turns out to be an endless pursuit and leads to more confusion and tension rather than to profits. 

The best trading approaches are those that are relatively simple - it is only in these cases that the trader can consistently perform his analysis/study and place his trades timely across sustained periods of trading.    

Posted 1 year ago 0 Likes   0 Dislikes

To feel anything is to misunderstand what trading is about.

Observe, wait for an opportunity, and go for it. Don't risk too much of your capital, and expect to be wrong in your judgements more than you are right. Also expect, that when you are right, you will make much more than what you loose when you are wrong.

If you think for a minute, that you can possibly and consistently be successful basing your trades in trying to understand the belated news you have access to, then you should think again.

Best wishes

Old Tom

Posted 1 year ago 0 Likes   0 Dislikes

Hi, Brian.

In July too, there has been a decline in Japanese exports. July saw a 14% year-on-year drop in Japanese exports. During this month, Japan's exports to the US declined by 11.8% (year on year) while its exports to China declined by 12.7% (year on year). Compared to the previous month, Japan's real exports declined by 3.2% in July 2016 while its real imports shrunk by 1.1% during the same period. 

Analysts point out that the rising value of the Yen is one of the major factors causing the decline in Japanese exports. Currently, the yen is trading at near 2-month highs against the USD. In such a situation, Japanese exports are likely to remain at lower levels. This in turn would suggest that achieving higher economic growth is likely to be a challenge.