The yen stabilized. Overview for 08.09.2020

This Tuesday, the Japanese yen in pair with the US dollar remains calm. The current quotation is 106.22.

These days, capital markets remain neutral about global risks and do not need many protective assets. Even with this, the yen looks rather stable.

The morning statistics showed that the Japanese GDP in the second quarter of 2020 shrank by 7.9% q/q against the expected 8.1% q/q. These are final digits, and they are clearly better than the forecast. On the other hand, in April-June the Japanese economy dropped by 9.9% y/y, but if the economic system klept falling for a year with the speed of the second quarter decline, the slump would reach 28.1%.

The personal consumption share of the GDP decreased by 7.9%. It looks unattractive - but forecasts promised a decline of 8.2%. Knowing these digits, one will not think the actual statistics to be that bad.

Export volumes decreased by 18.5% q/q, while import volumes dropped by 0.5% q/q only.

What do we see in this flow of statistics. First of all, we can see that large-scale and timely stimulation did not save the GDP from a decrease because two parameters - domestic demand and foreign orders - we slumping simultaneously. The digits make it clear that Japan needs another pack of stimulating measures, and the sooner - the better.