Japan GDP grows 0.2 percent in April-June as exports fall

Residential investment was relatively strong in the last quarter, rising 5 percent from a year earlier.

The Euro Stoxx 50, which is a compilation of blue chip stocks across the eurozone, is now up 004 percent, the French CAC 40 is also up 0.29 percent, the German DAX Index is advancing 0.15 percent and the U.K. FTSE 100 Index is moving up 0.08 percent.

Japan’s economic growth ground to a halt in April-June as weak exports and shaky domestic demand prompted companies to cut spending, putting fresh pressure on premier Shinzo Abe to come up with policies that will produce more sustainable growth.

ANALYST VIEWPOINT: “It’s housing, CPI and manufacturing week”. Traders’ focus remained heavily on possible USA interest rates moves, he said.

Manufacturing activity in the NY region unexpectedly contracted in the month of August, according to a report released by the Federal Reserve Bank of NY on Monday. “It’s not gangbusters stuff — on year growth remains at zero — but at least it won’t be subtracting from the overall growth equation in the months ahead”. The broadest index of Asia-Pacific shares outside Japan ( MIAPJ0000PUS) stumbled with a 0.2 percent deep. The Australian dollar was flat at $0.7646.

Capital expenditure declined 0.4 per cent in the April-June quarter after a 0.7 per cent drop in the first quarter, the data showed, suggesting that uncertainty over the global economic outlook and weak domestic markets are keeping firms from boosting spending. The Shanghai Composite index advanced 1 percent to 3,080.11 and markets in Southeast Asia were mostly higher.

Stocks in Tokyo drove the retreat, with markets in South Korea and India shut today for holidays.

ENERGY: Benchmark U.S. crude oil rose 14 cents to $44.63 a barrel in electronic trading on the New York Mercantile Exchange. Marcel Thieliant of Capital Economics said: “Inflation expectations remain poorly anchored, and the prospect of a prolonged period of below-target price gains raises the risk that expectations will move further away from the 2 percent inflation target”. Brent crude, used to price worldwide oils, added 42 cents to $47.39 a barrel.

Investors have recently lengthened the odds on any Fed hike this year, with futures implying around a 46 percent chance of a move in December.

Reduced expectations for Fed policy moves also hurt the US dollar, which has fallen against a basket of currencies in four of the last five trading sessions. After falling sharply from over 1,600 in 2014, before the price rout started, to a low of just 316 in late May, the USA oil rig count has steadily risen since then as US producers have adjusted to lower prices.

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