(12 JUNE 2017)DAILY MARKET BRIEF 2:Economic uncertainties still prevail in Japan

A set of data has been released this morning and it seems it is a never-ending story for Japan. April machine orders just collapsed at -.31% m/m while markets had estimated an increase of 0.5. This data is often used as a proxy for the capital expenditure.

Investors seem to be reluctant to invest domestically, due to several possible reasons including uncertainties about President Trump’s trade policy and about Japan's economic future.This morning, the Japan producer price index came in flat at 0% and it represents the weakest PPI result in nine months. Already last week, the growth rate had been revised down to 0.3% from 0.5%.

The yen has slightly strengthened against the US dollar because of a risk-off sentiment in the market over the past few weeks. But we consider the economy in Japan is still struggling to recover. The sad reality is Japan has not succeeded in boosting private consumption, which accounts for 60% of the GDP.

By Yann Quelenn