Nikkei 225 reaches a 30-year high, as Japan reports better-than-expected GDP

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He Nikkei 225 (N225) The index jumped 1.9%, surpassing the 30,000-point threshold for the first time since August 1990, according to data provider Refinitiv Eikon.
Stocks soared after the country posted a stronger-than-expected GDP, with an economy that expanded by about 3% in the period from October to December, compared to the previous quarter. This translates into an annualized rate of 12.7% and was much higher than analysts expected.
Overall, the Japanese economy shrank by 4.8% last year, below 5.3% that the International Monetary Fund had planned. In comparison, the US economy shrank by 3.5% in 2020, while Germany saw its GDP shrink by around 5%.

“The solid [performance] confirms that the economy continued to recover from its pandemic-induced decline, “wrote Stefan Angrick, a senior economist at Oxford Economics, in a research note.

“However, high-frequency data show that momentum began to decline in December amid a recovery in Covid-19 cases.”

Japan is suffering the worst drop in GDP, but it has been better than others
Japan is currently facing another wave of coronavirus infections, which has led the government to impose a state of emergency in some parts of the country.

Angrick said he hoped the measures would “delay, but not derail, the recovery in 2021, mainly because it seems likely that restrictions will be lifted.”

Japan has also just given its first approval for a coronavirus vaccine, giving the green light to the Pfizer-BioNTech feature. Sunday’s news further spurred the recovery to pick up pace.

“At this stage, Japan’s outlook looks more favorable and downside risks are beginning to fade. Not only have local cases of the third wave reached their peak, but the approval of the Pfizer vaccine is a development. significant that will boost inoculation start later this week, ”said Shahana Mukherjee, an economist at Moody’s Analytics.

“We maintain a cautiously optimistic view of Japan’s recovery in 2021, as long as the vaccine is carried out without much interruption,” he told CNN Business.

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Japan is not the only country with the best GDP data. On Monday, Thailand and Singapore posted new, solid figures, which helped boost investor confidence, according to Jeffrey Halley, a senior Asia Pacific market analyst at OANDA.

Other markets in the region were also concentrated on Monday, with that of South Korea Kospi (KOSPI) climbing index 1.5%. Markets in Singapore, Malaysia, Indonesia and Australia also rose, while trade in mainland China and Hong Kong closed for lunar New Year holidays.

“The underlying picture is that of a nascent recovery in … Asia [outside of China]”, Halley wrote to customers. “The optimistic tone is likely to continue in Europe unless we receive negative surprises.”

The FTSE 100 gained 1.4% in its first operations in London. The German DAX rose 0.4% and the French CAC 40 added 1.1%.

– CNN’s Junko Ogura in Tokyo contributed to this report.

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