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27 Mar 2015
Japanese CPI eases, expectations rise for stimulative measures from BoJ – BBH
FXStreet (Barcelona) - Reviewing the Japanese data release, The Brown Brothers Harriman Team notes that the overall picture is one of slight improvement in the labor market, improving consumption, but weak price pressures.
Key Quotes
“Unemployment edged down to 3.5% from 3.6% while the job-to-applicant ratio ticked up 1to 1.15 from 1.14.”
“Overall household spending fell 2.9% from a year ago compared with a 5.1% contraction in January. It is the smallest decline since last November.”
“Retail sales themselves rose 0.7% in February. This was shy of the 0.9% expected increase and was further offset by the downward revision in the January series to -1.9% from -1.3% initially reported.”
“Most disappointing, even if not unexpected, Japan's CPI eased. The national headline rate slipped to 2.2% in February from 2.4% in January. It has not risen since last May, and the February decline ended three months of stability at 2.4%..”
“Excluding fresh food, which is Japan's measure of core inflation, prices rose 2.0% from a year ago, down from 2.2%.”
“When adjusted for the retail sales tax increase last April, which the BOJ targets is at zero. This poor performance encourages a majority of market participants to expect the BOJ to adopt more stimulative measures later this year.”
“While we can see some tweaking of assets being purchased (e.g. ETFs and REITs), we are more skeptical of a significant increase in the JPY80 trillion annual target.”
Key Quotes
“Unemployment edged down to 3.5% from 3.6% while the job-to-applicant ratio ticked up 1to 1.15 from 1.14.”
“Overall household spending fell 2.9% from a year ago compared with a 5.1% contraction in January. It is the smallest decline since last November.”
“Retail sales themselves rose 0.7% in February. This was shy of the 0.9% expected increase and was further offset by the downward revision in the January series to -1.9% from -1.3% initially reported.”
“Most disappointing, even if not unexpected, Japan's CPI eased. The national headline rate slipped to 2.2% in February from 2.4% in January. It has not risen since last May, and the February decline ended three months of stability at 2.4%..”
“Excluding fresh food, which is Japan's measure of core inflation, prices rose 2.0% from a year ago, down from 2.2%.”
“When adjusted for the retail sales tax increase last April, which the BOJ targets is at zero. This poor performance encourages a majority of market participants to expect the BOJ to adopt more stimulative measures later this year.”
“While we can see some tweaking of assets being purchased (e.g. ETFs and REITs), we are more skeptical of a significant increase in the JPY80 trillion annual target.”