The Final Reading For The Fourth Quarter Showed Slow Growth During The Weakness Of Capital Spending In The Second Biggest Global Economy

The final GDP for the fourth quarter showed growth decreasing more worst than expectations compared with the pre-reading during the capital spending weakness from the Japanese companies and the deflation risk which pressures on the second biggest economy in the world to make recovery from the worst global financial crisis since World War II is a moderate despite the export's improvement which supported the industrial sector and the labor sector, the thing that supported the consumer confidence and the consumptions spending in the second biggest global economy.

GDP for the fourth quarter in Japan raised 0.9%, thus the current reading is worse than the current pre-reading which showed the accelerated growth 1.1% compared to a growth 0.3% during the third quarter, also the current read consider worse than the analyst expectations whish led to 1.0%.

The final annual GDP reading for the last quarter showed a growth 3.8%, and also considered less than the previous pre-reading which showed accelerategrowth to 4.6% compared with the previous reading which showed stability on Zero levels, the current reading also considered worse than financial analyst expectation which led to a growth with 4.0%.

The Japanese companies doubt in the recovery strength especially while the global incentive plans imminent to expire, big economies withdrawal the motivation to maintain the momentum of recovery by facing the risk of assets bubble and increasing in inflation during increasing the prices of row materials, in addition to increasing the Yen rate front of USD which negatively reflects on the competition ability for goods and services in Japan, which make Japan more interested to increase the capital spending which make the recovery accelerate decline in the second biggest global economy.

Especially decreasing in the current value of Yen negatively affect on Japanese exporting company's ravenous and profits , in addition to its increase the risk of deflation especially when the imports declining with the local currency , the thing that also increases the pressure on local Japanese companies which forced to decrease its process in order to be a competitive to the imported goods and services, Yesterday the order machines reading which considered an indices to capital spending from the Japanese companies for the period from three to six next months showed a declining in the beginning of this year by -3.7% after an increase to the highest level for the contentious fourteenth month .

On the other side the exports increasing in Japan for the second continues month, on the annually side on the beginning of this year the industriasector has supported during the last few months to show a growth for the tenth continues month, the thing that my lead the Japanese companies to re evaluate the increasing of capital spending during the demand recovery, the capital spending reading for the fourth year showed a decreasing by -17.3% compared with -24.8% during the third quarter.

The increasing of Japanese Companies profits in the 4th quarter of last year by 102.2% after declined by -32.4% in the 3rd quarter, and JapanesIndustrial Companies rose its earning forecasts for the 2010 in the global demand recovery, especially from China which is the largest importer of Japanese products and services that's lead to encouraged Japanese Companies during last few months to appoint a new jobs to decline that weakness in employment sector in second largest economy in the world, that contributed to decline in unemployment rate to its lowest level since 10 months during January, that's reaching to 4.9%.

Analysts expect in the light of raise exports, which provide support for the manufacturing production in the second largest economy in the world, that Japanese companies increase capital spending during the 1st half of this year to support the Japanese economy recovery in the upcoming period, the Japanese the Cabinet Office expects factory orders to incline 2% in the first quarter of this year, after it climbed 0.5% in the fourth quarter the first gain in seven quarters.

Monastery Policy makers of BOJ indicated by the fact that the Bank's program of loads, which was announced late last year, when the Bank specialized 10 trillion yen equivalent 115 billion dollars to provide short-term loans for three months when interest rate at 0.1% for commercial banks against eligible guarantees include Japanese government bonds, commercial papers and corporate bonds, that's helped to incline interest rates in the near term, and it also contributed to reduce the fluctuations risk in foreign currencies which may negatively affect on exports earnings and business confidence.

On the other side, the government's efforts by Japanese Prime Minister Mr. Yukio Hatoyama, who planed a new stimulus value of 7.0 trillion yen in thend of last year besides pervious stimulus which estimated by 25 trillion yen to support and improving the Japanese economy to face inflationary risks of deflation and rise in yen price, and also expected to contribute to accelerated the Japanese economy recovery from global crises, especially with counting Japanese exports rising and the industrial production growth in the second largest economy in the world are expected to spur Japanese companies to increase capital spending in upcoming period.

Ecpulse

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