FOREX TRADING

Decreasing In Consumer Prices As Expected In Japan

The annual reading of consumer prices in Japan issued with a decline that matches expectations while increased row materials and oil’s prices during the last few months, despite the reading is showing the consequence of decreasing the prices for last straight twelve months, which boosting BOJ’s pressure. BOJ has announced during the last meeting about increasing loans program with installing the lowest interest level to face the deflation which affect on economy’s momentum for the second biggest economy in the world.

The Japanese economy released the consumer price index for February with -1.1%, the same as expectations, showing the rising compared with previous reading with -1.3%, but the consumer price index that excluded fresh food for February, issued with -1.1% as expected, also the actual reading is better than previous reading with -1.2%.

Mr. Masaaky shirakawa the governor of the Bank of Japan, has pointed during last week to installing the interest rate at the lowest level at 0.1%, in addition of announcing the bank decision of increasing loans program with 10 trillion Yen to reach 20 trillion yen ( 222$ billion ), to encourage the short time loans with 3 months at interest 0.1% for commercial banks with a qualified guarantee which included Japanese governmental bonds , commercial papers and corporate bonds, in fact controlling the prices declining will take time although the economy’s growth is better than previous expectations.

The worth mentioned that Mr. Yukio Hatoyama the Japan’s prime minister, who mad an incentive plans at the end of the last year with 7.2 trillion Yen, to support the Japanese economy to face deflation and rising the Yen value, also he announced about his appreciating to the bank movements, adding that he expecting bank’s cooperating with the government to face the deflation risks.

The high Oil and raw materials during a few last months, which is shared in consumer prices retraction fell in Japan, especially after it reached to the top point during August, while the declining reached to -2.4%, in addition to the recovery of exports, which supported the industrial production to reduce weakness in employment sector, which also contributed to support Japanese’s economy recovery, especially with increasing in Consumer confidence, which affected on consumer spending, which represents more than half of GDP in Japan.

The monetary policy makers in Bank of Japan (BOJ) announced in earlier this year to raise their expectations for the economic growth and inflation rates, and indicating to reduced the recession in light of increased inflationary oil prices, where they indicated to expect a decline in consumer prices excluded food by -0.5% during the next year, which before the shrinking down to 0.2% during 2012, which is a better than of a previous forecasts in October, that indicated decreased by -0.8% during the upcoming year before shrinking down by -0.4% during 2012.

Analysts expect the monetary policy in Japan to increase their forecasts towards the economic growth and inflation rates during next month in light of positive economic data, which showed in a few last months, but some analysts noted to decline prices with the bank increased its forecasts, which makes BOJ in upcoming period to raise the possibility to expand for loans to 30 trillion yen, or extend the borrowing period to 6 months to support face the inflationary risk of deflation in Japan.

South Korea is the 4th biggest economy in Asian shows GDP final reading in the 4th quarter rose to 0.2%,and the current reading is meting with primarily reading, which is declined the growth that compared with 3rd quarter was at 3.2%.

South Korea GDP annual reading rose to 6% on yearly and this reading came meting with a primarily reading, which is better than prior reading at 0.9%.

Ecpulse

disclaimer: The content of ecPulse.com and any page in the website contain information for investors/traders and is not a recommendation to buy or sell currencies, stocks, gold, silver & energies, nor an offer to buy or sell currencies, stocks, gold, silver & energies. The information provided reflects the writers’ opinions that deemed reliable but is not guaranteed as to accuracy or completeness. ecPulse is not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trades currencies, stocks, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, stocks gold, silver &energies presented should be considered speculative with a high degree of volatility and risk