While economists in a WSJ survey expected GDP growth of 0.3%, the first quarter number surprised, coming in at 1.7%. That compared with a revise fourth-quarter one of negative 1.7% on an annualized basis. The stronger number most likely delayed for now any further monetary easing from the Bank of Japan and lent further doubt about a proposed sales-tax increase planned for next year. A weaker number investors believe would put pressure on officials to hold off that plan. Meanwhile, despite the comments of two Federal Reserve presidents about the June meeting being open to interest rate hikes, the dollar failed to rise suggesting traders have a different view.
Japan's economy suffered slow wage growth that hurt private consumption last year while exports also suffered from sluggish emerging market demand and a strong yen. Prime Minister Abe in 2014 raised the sales tax to 8 percent from 5 percent which tipped the economy into recession. That led Abe to delay a second tax hike to 10 percent by 18 months. Japan like a lot of other countries faces social security and high debt problems. The Nikkei 225 at 16,644.69 was down slightly.
The WSJ reported: Across the region, stocks were hit by worries about the potential fallout of higher U.S. interest rates on riskier assets. Upbeat U.S. economic data and comments from U.S. Federal Reserve officials helped to heighten investor expectations that interest rates there will rise as early as June. Australia’s S&P ASX 200 fell 0.7% and South Korea’s Kospi was off 0.6%. Both the Thai bahtand South Korean won reached two-month lows against the U.S. dollar, while Indonesia’s rupiah was also weaker. Investor sentiment toward China is turning gloomy for a number of reasons. Several state and local media reports suggested Beijing is tightening its grip on financial markets, ranging from getting tougher on the amount of leverage investment products can take on, to clamping down on speculation surrounding backdoor listings and false buyout announcements among listed firms.
The Shenzhen Composite Index finished the day 2.7% lower, falling from the morning, after high-ranking Chinese official Zhang Dejiang failed to mention the launch of a trading link between the Hong Kong and Shenzhen stock markets, which traders hope will generate excitement about China equities. Hong Kong’s Hang Seng Index ended 1.5% lower and stocks in Shanghai fell 1.4%.
The WSJ reported: Across the region, stocks were hit by worries about the potential fallout of higher U.S. interest rates on riskier assets. Upbeat U.S. economic data and comments from U.S. Federal Reserve officials helped to heighten investor expectations that interest rates there will rise as early as June. Australia’s S&P ASX 200 fell 0.7% and South Korea’s Kospi was off 0.6%. Both the Thai bahtand South Korean won reached two-month lows against the U.S. dollar, while Indonesia’s rupiah was also weaker. Investor sentiment toward China is turning gloomy for a number of reasons. Several state and local media reports suggested Beijing is tightening its grip on financial markets, ranging from getting tougher on the amount of leverage investment products can take on, to clamping down on speculation surrounding backdoor listings and false buyout announcements among listed firms.
The Shenzhen Composite Index finished the day 2.7% lower, falling from the morning, after high-ranking Chinese official Zhang Dejiang failed to mention the launch of a trading link between the Hong Kong and Shenzhen stock markets, which traders hope will generate excitement about China equities. Hong Kong’s Hang Seng Index ended 1.5% lower and stocks in Shanghai fell 1.4%.
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