It is likely that recession is expected in every country. Economy growth registered in the first quarter in Japan was offset by the data for the second quarter.
According to the information received this morning, GDP in Japan gained just 0.3% q/q while analysts anticipated 0.6% growth. On annual basis the indicator went down to 1.4%.
The reason for such slow growth is still the same: reconstruction efforts due to devastating disasters the country faced last year in March as well as aftereffects of European crisis which also wreck not only Japanese, but the global economy too.
Japanese companies do not think about expansion yet because external demand is decreasing. The Bank of Japan stated earlier that the only thing that rescues the economy is domestic demand which makes up about 60% of GDP.
Taking into account this positive data, the Bank of Japan kept the interest rate unchanged in the range from 0.0% to 0.1% at the meeting that was held on August 9. Besides, the Bank did not change the bond purchase program which was left at the level of 70 trillion yen.
Now, in the light of poor GDP data from Japan, investors will hope for new economic stimuli from the regulator.