Morning Forex Fundamental: JPY

Morning Forex Fundamental: JPY

'Japan's economy can emerge from recession in the first quarter as consumer spending and exports are expected to pick up'- Yasuo Yamamoto, senior economist at Mizuho Research Institute

Activity within the Japanese tertiary sector fell more than expected in the first month of 2013, indicating that consumers are getting more anxious over the world's third largest economy's outlook, despite government's pledge to boost growth. According to the Ministry of Economy, Trade and Industry, a gauge, which measures the domestic service sector in Japan, such as information and communication, electricity, gas heat and water, transport, wholesale and retail trade, dropped seasonally adjusted 1.1% on month in December, after a 1.4% gain in the preceding month. Latest data indicate that companies are showing unwillingness to increase their spending despite Shinzo Abe's pledge to introduce more bold measures in order to revive the economy.

'Japan's economy can emerge from recession in the first quarter as consumer spending and exports are expected to pick up,' said Yasuo Yamamoto, senior economist at Mizuho Research Institute. 'But in order for growth to accelerate even further, capital expenditure needs to improve.'

'There have been signs of the economy bottoming out,' Yoshiki Shinke, chief economist at Dai-Ichi Life Research Institute. 'It would not be surprising to see the decline in the coincident index coming to a halt in the near term.'