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Global economy worrying for Japanese corporate sector - BAML

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Oct 7, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Guatemala) - Analysts at Bank of America Merrill Lynch explained that in their view, economic downturn in emerging markets (led by China) is a worrying development for Japanese companies.

    For an insight to the recent BoJ meeting, see here (BoJ: Little clues on further easing by month-end).

    Key Quotes:

    "However, three factors could provide a cushion:

    (1) corporate earnings are at an all-time high;

    (2) the output gap is currently tight, since companies reduced surplus capacity in the few years following the 2008 financial crisis while labor supply is falling because of the aging population; and

    (3) although emerging economies are worsening, western developed nations' economies are in recovery. Consequently, the Japanese economy is showing a degree of resilience against the downturn in emerging market economies."

    For an insight to the recent BoJ meeting, see here (BoJ: Little clues on further easing by month-end).
    For more information, read our latest forex news.
     

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