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
US Dollar Outlook Shifts as Treasury Yields Fall and Central Bank Divergence Shapes Forex | 22nd October, 2026
Equity rebound stutters as oil spikes again, yen gains from AI jitters
Oil Holds Near Highs as Gold Slips Ahead of Fed Decision
Midweek Technical Look on US100, GOLD, BTCUSD
EBC Markets Briefing | New Zealand dollar down on cooling inflation
GOLD Below $3,999 or Above $4,501? What Could the Coming Week Bring?
Tesla Rebounds Towards $386 as Traders Weigh Q3 Earnings
