Japan Economy & Housing Starts
Japan Economic Update
Following the surprise results of the Brexit vote in favour of Britain’s secession from Europe, global currency markets underwent a sharp round of volatility in June. The Japanese yen strengthening dramatically as it is traditionally known as a safe haven. The yen strengthened from 108 to the US dollar at the beginning of the month to crack the 100 yen to dollar mark by early July. The yen’s renewed strength spelled eroding profits for Japan’s exporters and as a result the Nikkei 225 equities index fell from just under the 17,000 level to the low 15,000 mark. Renewed strength in the yen is also frustrating the efforts of the Bank of Japan to reflate the economy and is prompting calls for even further monetary easing. Japan’s current inflation rate is currently hovering at 1%, despite two and a half years of aggressive quantitative easing. However despite the lack of progress in re-invigorating the Japanese economy, Prime Minister Shinzo Abe’s LDP coalition government with the Komeito is expected to retain a two thirds majority to keep control of the Upper Diet in elections scheduled for July 10th.
Japan Housing Starts Summary
May total housing starts increased 9.8% to 78,728 units. Owner occupied starts increased 4.3% whereas rental housing gained 15%. The mansion condominium declined by a slight 0.8%, the first drop in 4 months.
Total wood housing improved 12.2% to 42,794 starts. Of these wooden pre-fab bucked the trend with a 9.7% decline to 1,059 units. Platform frame starts posted a 13.7% increase to 9,412 units. By segment 2×4 custom ordered single family homes were up 1.7% to 2,604 units, rentals soared 19% to 5,722 units and built for sale 2×4 spec housing jumped 21.3% to 1,075 units.