By TraderVox.com
Tradervox.com (Dublin) – Japanese economy is expected to have grown in the second quarter at half the pace in the first quarter according to market survey. The slowdown is predicted to have been caused by the escalating Euro zone debt crisis and the strong yen which have limited the nation’s exports. The market expects the gross domestic product to have expanded by 2.3 percent, down from the 4.7 percent in the first quarter of the year. The actual value will be known on August 13 when the Cabinet Office releases the report.
The growth in the second quarter is expected to slow as exporter such as Sony Corp and Canon Inc revised their profit projections downward due to waning global economic growth. It is also expected that policy makers are under pressure to consider supplementary budget and monetary stimulus measures to push the demand up as the Prime Minister Yoshihiko Noda prepares to table a sales-tax increase through the Diet when they meet today. Economists have further indicated that the country’s growth will slow to one percent in the third quarter as global economy continues to slowdown.
According to Koheu Okazaki who is an Economist in Tokyo at Nomura Securities Co, there is need for analysts and investors to be alert on the downside risks in the third quarter since the global economic slowdown will affect Japan’s economy. He said that there is a possibility of fiscal and monetary stimulus at the end of the year. These comments have come just over a week after the Bank of Japan refrained from making additional monetary stimulus in its board meeting in August 1. The BOJ was seen taking a wait and see approach, as the European Central Bank had indicated that it will take decisive measures to end crisis in the region.
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