Japan Economic Indicators Important for Forex Market Trades

The Japanese economy is characterized as being manufacturing oriented. This requires a special attention to the numbers relevant for this sector. The following is a list of the indicators of the Japanese economy you should closely examine:

Unemployment Rate Indicator

Every month the employment rates are issued by the Management and Coordination Agency of Japan. It includes data on the unemployment rate as well as the number of jobs that are available within the country. The current labor force is surveyed so that information is extracted. Forex market participants use this survey as a gauge of the overall economic activity.

Gross Domestic Product (GDP)

This indicator provides information on the total amounts of goods and services that are produced and consumed within the Japanese borders. It is measured and reported on quarterly and yearly basis. In order to calculate it the households, businesses and government expenditures should be added as well as the net purchases made by foreigners. The conversion from current prices to constant-dollar GDP is done through the GDP deflator. Forex market traders should pay close attention to the preliminary reports that are issued on regular basis.

Tankan Survey

Four times every year the Tankan Survey is conducted which includes the responses of around 9,000 Japanese enterprises. The latter are grouped in four categories:

• Principal enterprises
• Small-sized enterprises
• Medium-sized enterprises
• Large-sized enterprises

Forex market traders closely examine this survey since it gives an overall view on the business climate that is prevalent in Japan.

Balance of Payments

In order to get a view on the international transactions that Japan executes one should refer to its balance of payments. It includes information on the trades with goods, service, investment income and capital flows. It is issued every month and semi-annually. In order to measure the international trade activity of Japan Forex participants usually refer to the current account of the BoJ.

Industrial Production (IP) Index

In order to find information on the output (quantity of goods) produced by the manufacturing, mining and utilities sectors one should refer to the IP index. Only goods produced for domestic consumption and export are included in the IP index. The latter doesn't include output from agriculture, transportation, construction, trade, finance, communication, service industries, and imports as well as government output. A weighting of the importance of each component is given in accordance to the base period. The IP index is believed to give a good view on the prevalent conditions of the economy. Forex market investors also tend to consider that there is a close connection between the total output and IP and inventory accumulation.

To be successful at forex trading you need two main things - the knowledge and the right trading plaftorm. For a trading platform we can recommend you Easy Forex. It offers unique features such as Inside Viewer™, which will give you a unique insight of what other traders are doing, competitive spreads, 24/7 support, etc. Start trading from as little as $25.

Bookmark this page :