Japan's pace of growth accelerating after post-tax hike dip - BNP Paribas

FXStreet (Łódź) - Following the contraction of Japan's economy, brought about by the implementation of the consumption tax hike in April, growth is picking up again, according to Raymond Van Der Putten from BNP Paribas.

Key quotes

"The Economy Watchers are shrugging off the effects of the consumption tax hike in April. The economy contracted sharply in April, but this should only be temporary. In June, the overall index for current conditions improved to 47.1 from 45.1 in the previous month."

"The corporate activity related diffusion index was again above 50, after a dip in May. It indicates that production and order receipts have strengthened again."

"The employment index weakened slightly to 57.9, but remained well above the 50 mark, implying that temp agencies and job advertisement papers have seen an increase in job offers."

"The economy watchers expect business conditions to improve further in the coming months, the diffusion indices for future conditions all being above the 50."

"All in all, the economy is recovering well after the tax hike. That is positive news for the government and makes it easier to implement the second hike from 8% to 10% planned for October 2015."

"Nevertheless, the sluggish world recovery is weighing on the economy, in particular on the manufacturing sector."

"We expect the economy to grow by around 1.5% q/q annualised rate in the second half of 2014, supported by easy fiscal and monetary policies."