Japan’s economic growth unlikely to accelerate significantly in coming years

After three years of Abenomics, the conclusion appears to be rather subdued. Last year, Japan’s economy had expanded by a disappointing 0.6 percent. The Japanese economic growth is unlikely to accelerate in the years ahead, in spite of another economic program introduced by the government.

This is not least due to the fact that the stimulus package actually comprised only JPY 7.5 trillion in additional government spending and is based on known measures that have not been successful for years not to boost the economy on a sustainable basis, noted Commerzbank in a research report.

The Bank of Japan has noted that industrial production and export demand are being negatively impacted mainly due to subdued growth in emerging nations. But even in case of private consumption, there has not been any sign of a rapid growth, while company confidence continues to be weak.

Furthermore, inflation continues to stay low and has remained negative again since March of this year. The core rate, which excludes food and energy, also moved back to zero. Given this, the Bank of Japan had to again postpone the time when it expects the inflation to reach the target level of 2 percent.  The central bank now projects the inflation to reach 2 percent target rate in the fiscal year of 2018.

At 11:00 GMT the FxWirePro's Hourly Strength Index of Japanese Yen stood neutral at -41.6712. The hourly strength index of US dollar stood neutral at 47.7576. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex