We are expecting a flurry of economic data to come out of Japan this week. Focus will be on whether we are seeing their economy lose momentum. Weak data will raise concerns the economic recovery is slowing down. We are also focused on the political turmoil in Thailand, after weekend violence heightened concerns. We also saw Ukraine’s President, Viktor Yunukovych ousted as well.
We are entering this week with a new government in the Ukraine, unrest in Thailand, data from Japan and housing data that slowed in China. What does all this mean for the region and emerging markets?
China’s Housing prices slowed for the first time since 2012. New home prices rose just 9.6 percent in January per annum. December’s number came in at 9.9 percent. Prices in shanghai were up 17.5 percent compared to 18.2 percent in December. In Beijing, prices were up 14.7 percent, compared to eh 16 percent the month before.
This week also sees the markets digesting developments out of the weekend’s G-20 meeting in Sydney over the weekend. The G-20 is going to implement plans to boost global economic growth by two percentage points over the next several years.
Japanese Data to Reveal the State of the Economic Recovery
Japan is getting ready to release a whole slew of data this week. We begin with household spending, inflation numbers, industrial output and retail sales will finish the flurry at the end of the week. This data will tell us about the health of Japan’s economy before the sales tax hike goes into effect in April. We are expecting retail sales to rise 3.8 percent in January compared to November’s 2.6 percent rise.
GDP data, released last week showed that Japan’s economy grew at 0.3 percent in Q4. We expected it to grow at 0.7 percent. While it was growth, there are rising concerns Shinzo Abe’s Abenomics might be stalling and additional stimulus will be required. The data being released this week will show us the health of the recovery before April’s tax hike. Slowing of numbers could mean more stimulus before April to kick start growth.