Exports drive growth in Australia, BOJ stimulus boosts Nikkei
Australia’s Q2 GDP grows at the same pace quarterly whilst annual GDP drops a notch
Australia's economy grew by 0.4% in the last quarter, meeting market expectations and benefiting from a positive revision of the previous reading from 0.2% to 0.4%. However, annual GDP growth slowed to 2.1%
The Aussie attempts rebounding after steep losses overnight after RBA decision
BOJ official affirms further stimulus measures.
Australia grows 0.4% in line with expectations
Australia’s economy grows by 0.4% in the last quarter, in line with market expectations in addition to the previous reading being revised positively from 0.2% to 0.4%. However, on an annual basis, the Australian economy saw a slight slowdown, with GDP growing only by 2.1%, compared to the 2.4% growth of Q1.
The annual jot down can be attributed to the RBA’s previous aggressive tightening cycle which has now been paused after 400 bp rate hikes to hit a ceiling of 4.1%. Growth in China’s economy also weighed being a major trading partner with Australia.
Yesterday, the bank acknowledged the adverse impact of the interest rate hikes from May 2022 to June 2023 thus implementing a pause.
The Aussie was last seen attempting to recover steep losses made yesterday, to trade near 0.638.
BOJ stimulus pulls Nikkei higher
While concerns about a slowdown in China's economy led to a decline in most Asian stocks on Wednesday, Japanese stocks stood out in the region. Hajime Takata, board member of the Bank of Japan reiterated the necessity for the central bank to maintain expansionary monetary policies to support the economy.
In contrast, the Shanghai Composite and CSI 300 indices saw declines of 0.5% and 0.3%, respectively, and the Hang Seng index in Hong Kong also dropped by 0.3%. However, the losses in the Hang Seng index were mitigated by the resilience of real estate stocks.
Whilst, the Japanese Nikkei 225 index outperformed its regional counterparts, rising 0.8% during the day.