Japan stocks slip despite growth of 1.7% in first quarter
18 May 2016
- From the section Business
Japanese stocks opened lower despite data showing the country’s economy grew by 1.7% in the first three months of the year.
The better-than-expected growth rate came after as higher government spending helped offset weakness in business investment and exports.
Capital expenditure fell by 1.4% during the quarter, showing that businesses remain reluctant to spend.
The Nikkei 225 is down 0.6% while the broader Topix has fallen 0.4%.
Analysts are concerned about the outlook for consumer spending, which is critical to the economy given it accounts for about 60% of GDP.
That may take a hit if Prime Minister Shinzo Abe moves to increase the country’s sales tax to 10% from the current 8%.
Japan’s Nikkei newspaper reported this week that Mr Abe plans to postpone the move and will announce his decision after the G7 meeting later this month.
Rest of Asia
Other stock markets in Asia are also trading in negative territory ahead of the release of the US central bank’s meeting minutes later on Wednesday.
Investors are looking for guidance on what and when the Federal Reserve’s next move is going to be.
Many investors are now predicting the Fed may raise interest rates at its June meeting following positive economic data released last week.
Hong Kong’s Hang Seng has opened 1.3% in the red and the Shanghai Composite is 0.3% lower.
Australia’s S&P/ASX 200 is down 0.4% and New Zealand stocks have lost 0.2%.
South Korea’s benchmark Kospi is falling 1.1%.