Japan’s Nikkei 225 index remained on a standstill on Tuesday after the release of Japan’s economic data. The MSCI’s gauge of Asia Pacific stocks outside Japan rose 0.11%. Other Asian Pacific indices like Australia’s ASX 200 recorded a high while Hong Kong’s Hang Seng index declined by 0.40%.
Japan’s Economic Outlook
The Nikkei 225 index traded flat on Tuesday after the country revised first quarter data which showed that the country’s economy shrank at a slower pace than expected. Government spending held up better than the previous as inventories recorded the strongest growth in three years.
Japan’s Gross Domestic Product (GDP) contracted 3.9% YoY from the previous 11.7% missing the estimated 4.8% forecast. Non annualized Gross Domestic Product (GDP) contracted 1% from the previous 2.8%. Private consumption declined 1.5% from the previous 2.2% missing the 1.4% forecast.
Wages gained in April from a year earlier was at the fastest rate since 2018. Japan Overall Wage Income of Employees came in at 1.6% from the previous 0.6%.
Consumer spending was weaker than the estimated forecast. With pubs and restaurants being directed to close early, consumer spending has taken a nosedive. Most service businesses have chosen to cut or at least post pone investment until the overall outlook is more positive.
The uptrend in Asia Pacific stocks came as the G7 nations reached a groundbreaking deal on Saturday. The nations agreed to back a minimum global corporate tax rate of at least 15%. This would be a lift in shares of technology giants such as Microsoft and Facebook as their future responsibilities become more conventional.
The Nikkei 225 index will react to US key inflation data to be released later this week. Economic investors are closely eyeing the inflation data. They are hoping to get clues about the Federal Reserve’s monetary policy. Fears about tapering of the Fed’s policy earlier than expected are hovering the markets.
Nikkei 225 Movers
Daichi Sankyo, a pharmaceutical company, was the best performer in the Nikkei 225 index with a 5.45% gain. Other top performers include Kawasaki Kisen Kaisha, DeNA Co, Sumitomo Dainippon Pharma Co Ltd, among others.
Sumitomo Metal Mining was the worst performer in the index. The mining company dropped by 4.01%. Oji Holdings Corp and Daikin Industries also lagged each dropping by 3.12% and 2.90% respectively.