The Japanese economy showed any growth during the quarter in the first quarter (Q1) of 2025, and showed the final reading issued by the Japanese Cabinet Office on Monday. This reading came above the market expectations and the previous -0.2 % previous appreciation.
GDP in Japan (GDP) decreased by an annual rate of 0.2 % in the first quarter, compared to -0.7 % in the previous reading.
The market reaction to the gross domestic product data in Japan
At the time of the press, USD/JPY trades 0.13 % a day at 144.68.
Common questions about GDP
The GDP (GDP) measures its economy growth rate over a certain period of time, usually a quarter. The most reliable numbers are those that compare the GDP to the previous quarter, for example, Q2 of 2023 against Q1 for the year 2023, or to the same period in the previous year, for example Q2 for the year 2023 against Q2 for the year 2022. However, these can be misleading, if temporary shocks affect growth in one quarter but it is unlikely to continue throughout the year – as happened in the first quarter From 2020 at the outbreak of the roaming epidemic, when the growth decreased.
The result of the high gross domestic product is generally positive for the nation’s currency because it reflects an increasing economy, which is likely to produce goods and services that can be exported, as well as attracting higher foreign investments. In the same manner, when the gross domestic product falls usually it is negative for the currency. When the economy grows, people tend to spend more, which leads to inflation. Then the central bank in the country must put interest rates to combat inflation through the side effect to attract more capital flows from global investors, thus helping the local currency to estimate it.
When the economy grows and the gross domestic product is transmitted, people tend to spend more than inflation. Then the central bank in the country must put interest rates to combat inflation. High interest rates are negative for gold because it increases the costs of keeping gold in exchange for placing money in the cash deposit account. Therefore, the rate of GDP growth is usually the highest declining gold price factor.
