The Bank of Japan maintained its assessment of moderate recovery for the Japanese economy in its monthly report released on Wednesday. The view was supported by a rebound in the tertiary index in April reported by Bloomberg.
Japan’s demand for services rose for the first time in three months, a sign the economic recovery is spreading to households.
The tertiary index, which captures 63 percent of the economy, advanced 2.1 percent from March, the Trade Ministry said today in Tokyo. The median forecast of 21 economists surveyed by Bloomberg News was for a 2.5 percent increase.
US economic data on Wednesday were mixed. Bloomberg reports:
Production in the U.S. rose by the most since August and builders broke ground on fewer homes than projected, showing manufacturing is sustaining the recovery as the housing market retreats following the expiration of a government tax credit.
Output at factories, mines and utilities increased 1.2 percent last month after a 0.7 percent gain in April, a Federal Reserve report in Washington showed today. Housing starts fell 10 percent, the biggest decline since March 2009, according to figures from the Commerce Department.
However, the housing market collapse in the US is old news. The new news could be a collapse in Asian property markets. Again from Bloomberg:
From Shanghai to Singapore, policy makers are struggling in their efforts to curb property bubbles that threaten to derail the world’s fastest growing region.
In China, home prices are surging at a record pace even after authorities set price ceilings, demanded higher deposits, and limited second-home purchases. In Hong Kong, where the government has pledged to release more land to cool prices, a site auctioned on June 8 fetched the most since the market peak of 1997. It’s a similar story in Singapore and Taiwan as prices defy cooling measures.
There are tentative signs that markets may be cooling.
While prices have yet to drop, sales volumes have. Property sales in Beijing, Shanghai and Shenzhen fell as much as 70 percent in May. China Vanke Co., the nation’s biggest publicly traded property developer, said its sales fell 20 percent in May from a year earlier. Guangzhou R&F Properties Co.’s contracted sales last month shrank 48 percent...
Private residential sales in Singapore rose to a nine-month high of 2,208 in April, the Urban Redevelopment Authority said, the highest since July 2009, showing the “resilience” of demand for new homes even after the government curbs, Li Hiaw Ho, executive director of CB Richard Ellis Research, said then. Sales dropped to 1,078 units in May.
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