Thungen Financial 8th September 2014 - Asian Economic News

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Thungen Financial 8th September 2014 - Asian Economic News

Asian markets had a mixed day as China posted positive economic data and Japan announced disappointing figures.

Exports in the world's second largest economy rose unexpectedly in August whilst imports fell again. Exports were up 9.4% and imports fell 2.4% compared to August 2013. Whilst the lack of imports shows a drop in demand on the mainland, with exports increasing by such a strong percentage would imply that the global economy is healthy. Chinese data is always subject to mis-representation however the figures released were above forecast and go to create a trade surplus of over $49bn, a new record.

At this rate of expansion the Chinese economy could be back on track to achieve the 7.5% GDP growth originally deemed impossible. Later this week inflation data and New Yuan Loans information is made available. Inflation should have increased slightly to 0.56% according to analysts and New Yuan Loans could have almost doubled to over ¥600bn which would be good news as it would indicate that money is starting to be lent out to households and small businesses.

In Japan, news that the economy had shrunk by 7.1% was corrected. At an annualised rate of 6.8%, the economy contracted in the second quarter of 2014. The BoJ has been desperately battling deflation for almost 2 decades and the recent measure implemented by the Prime Minister, known as Abenomics, has done little to drive the economy forward. Both imports and exports have been reducing of late and as the government faces a huge social welfare bill along with a global economy that is expanding one week and contracting another, seeing demand for Japanese products dwindling is going to be a major concern over the next few months.

It will take time to see whether the Sales Tax increase in April will have the desired effect. At the moment many people have already brought their big purchases for the year and are waiting to see whether prices will start to fall before the new increase bringing the Sales Tax up from 8% to 10% later next year takes effect.

Major Asian Markets as of 8th September 2014

Hang Seng 25,208.09 (-0.13%)

SSE Comp 2,326.43 (+0.85%)

Nikkei 15,705.11 (+0.23%)

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DISCLAIMER  The views, opinions, findings, and conclusions or recommendations expressed on this service are those of the author(s) and do not necessarily reflect the views of the Thungen Financial Advisors. All market data within this release is for your general information and enjoys indicative status only. Thungen Financial Advisors does not accept any responsibility for its accuracy or for any use to which it may be put. All share prices and market indexes delayed at least 15 minutes. 52 week high and low values are calculated from close price data.