The Japanese Parliament will be voting regarding this issue on Wednesday.
The Japanese Ministry of Economy, Trade, and Industry published its industrial production index, which showed a contraction of 15.5 percent in July (year-to-year), after dropping by 16.1 percent in the previous month. The analysts expected it to remain unchanged. In monthly terms, industrial production gained 8.7 percent in July, after being at 8 percent in the previous month. The analysts expected it to remain unchanged.
In July, the Capacity Utilization was at 9.6 percent after being at 6.2 percent, and below the analysts’ expectations who foresaw it to be at 0.2 percent. The Tertiary Industry Index stood at -0.5 percent in July (month-to-month), dropping from the previous month figure which stood at 5.2 percent and way below the analysts’ expectations who foresaw it to be at 5.2 percent.
Yoshihide Suga was recently elected as the leader of the Liberal Democratic Party, getting 377 votes out of 535, which paves his way to become the Japanese Prime Minister. The Japanese Parliament will be voting regarding this issue on Wednesday. Suga pledged not to stop the economic reforms that were being pushed by the outgoing Prime Minister Shinzo Abe, better known as “Abenomics”, which implies continuing with a flexible monetary policy, boosting government spending as well as pushing for reforms that would assess Japan’s demographic problems.
“I will devote all of myself to work for Japan and its citizens,” said Suga after thanking Abe.
The yen is a popular asset during turbulent times.
If elected, Suga would lead the Liberal Democratic Party until September 2021.
Reuters released the Tankan survey, which showed that Japanese manufacturers were pessimistic for the 14th consecutive month in September regarding the state of the economy, though improving. The Tankan sentiment index increased to -29 from -33 in august, hitting a six-month minimum. The services sentiment index was at -18, improving from August’s -23.
The Nikkei 225 closed in the positive territory, advancing by 0.65 percent during the session and closing at the 23,559.30 level. In the same way, the TOPIX index gained 0.88 percent, closing the session at the 1,651.10 level.
By 7:41 GMT the US dollar dropped by 0.15 percent against the Japanese Yen, falling to the 105.98 level.