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Japan stocks flat after economy dodges recession | Japan stocks flat after economy dodges recession |
(about 2 hours later) | |
Japanese stocks closed little changed after data showed the economy dodged a recession, growing at an annual pace of 1.7% in the first quarter of the year. | |
The better-than-expected growth rate came after higher government spending helped to offset weakness in business investment and exports. | The better-than-expected growth rate came after higher government spending helped to offset weakness in business investment and exports. |
Capital expenditure fell by 1.4% during the quarter, indicating that businesses remain reluctant to spend. | |
Japan's benchmark Nikkei 225 index fell slightly to 16,644.69. | |
The broader Topix index ended up 0.2% at 1,338.38. | The broader Topix index ended up 0.2% at 1,338.38. |
Despite the better-than-expected GDP figure, analysts are concerned about the outlook for consumer spending, which accounts for about 60% of GDP. | Despite the better-than-expected GDP figure, analysts are concerned about the outlook for consumer spending, which accounts for about 60% of GDP. |
That could take a hit if Prime Minister Shinzo Abe moves to increase the country's sales tax to 10% from the current 8%. | That could take a hit if Prime Minister Shinzo Abe moves to increase the country's sales tax to 10% from the current 8%. |
Japan's Nikkei newspaper reported this week that Mr Abe plans to postpone the move and will announce his decision after the G7 meeting later this month. | Japan's Nikkei newspaper reported this week that Mr Abe plans to postpone the move and will announce his decision after the G7 meeting later this month. |
Rest of Asia | Rest of Asia |
Other stock markets in Asia were lower ahead of the release of the US central bank's meeting minutes later on Wednesday. | Other stock markets in Asia were lower ahead of the release of the US central bank's meeting minutes later on Wednesday. |
Investors are looking for guidance on what and when the Federal Reserve's next move is going to be. | Investors are looking for guidance on what and when the Federal Reserve's next move is going to be. |
Many investors are now predicting the Fed may raise interest rates at its June meeting following a recent run of positive economic data. | Many investors are now predicting the Fed may raise interest rates at its June meeting following a recent run of positive economic data. |
Hong Kong's Hang Seng index fell 1.5% to close at 19,826.41 while the mainland Shanghai Composite dropped 1.3% to finish at 2,807.51. | |
Australia's S&P/ASX 200 index lost 0.7% to finish at 5,356.20, while South Korea's benchmark Kospi index fell 0.6% to close at 1,956.73. | Australia's S&P/ASX 200 index lost 0.7% to finish at 5,356.20, while South Korea's benchmark Kospi index fell 0.6% to close at 1,956.73. |