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Japan's GDP, Machine orders hint at improving fundamentals

FXstreet.com (Barcelona) - One of the most pressing issues facing Japan is how to reactivate its sluggish economic outlook.

Yesterday, we had a first indication that the country may indeed be heading towards stronger growth after the GDP beat expectations by a seriously upbeat 0.8 bp deviation, from 2.7% expected to 3.5% released.

Today, was the turn to assess how machinery orders - key sector of the Japanese economy - were performing, and the result could not be more promising after the series of indicators all came above expectations. Japan machine orders registered in March were up +14.2% m/m vs. 3.5% expected, while on a yearly basis, came at +2.4% vs -4.9% expected.

As Eamonn Sheridan, editor at Forexlive, notes: "Its a lot better than what we are accustomed to seeing out of Japan. The machinery orders are a very good result. But, no denying the result will be welcome in Tokyo – the series will be closely watched in the market again next month for signs of consolidation in the improvement."

The value of the Yen, which has plummeted over 30% since November last year when Japanese elections were announced, has resulted in the Japanese flagship exporters being much more competitive globally in detriment of other export-led countries.

A clear example is Germany, where Japan's catch up in competitiveness is hurting exports in the country.

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