Asia slows more than expected
Asia slows more than expected
The statistics packages from China and Japan - the largest economies in the Asian region - came out below expectations, highlighting weak domestic demand and production.
Japan's economy lost 0.3% in the third quarter while it was expected to grow by the same amount. Meanwhile, real GDP added 1.8% y/y. A jump in imports was responsible for the decrease while private consumption showed a relatively moderate positive contribution.
Industrial production lost 1.9% in September, reversing a sharp turnaround after three months of growth, during which the index increased by 13.4%. A jump in energy prices prevents production from taking full advantage of the weaker yen. China's slowdown will likely constrain Japan's industry by not giving it enough orders.
China noted a 0.5% y/y fall in retail sales thanks to 0-covid restrictions. These are gradually easing but remain much more restrained than in other major economies worldwide. Industrial Production growth slowed to 5% y/y last month versus 6.3% in September.
Weighing retail sales and manufacturing numbers would be enough of a signal for the government to step up support to the economy.
Considering the weak data from Japan and China, their currencies have particularly strengthened this month by 6.5% and 4%, respectively. Currency volatility risks hurting exporters for whom exchange rate stability might be a better option after a slump since the start of the year.
By the FxPro Analyst Team
Has Crypto Lost the Capital… or Has The S&P500 Stolen the Spotlight?
Weekly Recap and Forecast: Oil nears pre-war levels as the US and Iran sign peace agreement. Fed keeps interest rates unchanged.
Hawkish Fed Outlook Supports Dollar as Gold, Silver and Kiwi Extend Losses | 19th June, 2026
Hawkish Fed fuels dollar, yen and gold extend declines
Week Ahead – Fed’s hawkish tilt and Iran deal turn focus to PCE inflation and PMIs
Hyperscaler Spending and AI Expansion Propel Coherent’s Optical Rally
Bitcoin Breaks the Channel, Ethereum Fails to Reclaim Support
