0.7% acceleration in Japanese GDP. Household confidence remains hesitant. Trade deficit down 66%. Inflation falls to +3.2%. Expansive monetary policy. Nikkei at 33-year high.

Key points

• Japanese economy recovers strongly in Q1, growing more strongly than expected (+0.7%)
• Slower growth in Q2
• Slightly more encouraging leading indicators
• Slight improvement in consumer confidence
• Trade deficit decreases by -66%
• Japanese inflation confirms its downward trend
• BoJ monetary policy to remain highly expansive
• Yen yields still unattractive
• Yen yield spreads still unfavorable
• Nikkei at 33-year high

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