30 Jan 2015
Japan hobbled up the consumption tax hike – BBH
FXStreet (Barcelona) - The Brown Brothers Harriman Team comments on today’s Japanese CPI, Industrial Production and household spending data release, noting that the consumption tax hike will keep Japan’s inflation and consumer spending soft.
Key Quotes
“There was a lot of data out of Japan overnight. The labor market continued to tighten with the unemployment rate falling to 3.4%, the lowest level since late 1997, and the job-to-applicant ratio edging higher to 1.15, the highest since March 1992. The participation rate rose slightly to 59.3%.”
“Despite the encouraging trend, compensation is still not rising meaningfully.”
“Japan reported December national and Tokyo January CPI. The former came in at 2.4% y/y vs. 2.3% consensus, while the latter came in at 2.3% vs. 2.2% consensus. Ex-fresh food and energy measures for both series were largely close to consensus.”
“Japan also reported December IP up 1.0% m/m vs. 1.2% consensus and -0.5% in November, as well as overall household spending at -3.4% y/y vs. -2.3% consensus.”
“Overall, the data support the notion that the economy remains hobbled by the consumption tax hike, with consumer spending weak and inflation still likely to come in under target.”
Key Quotes
“There was a lot of data out of Japan overnight. The labor market continued to tighten with the unemployment rate falling to 3.4%, the lowest level since late 1997, and the job-to-applicant ratio edging higher to 1.15, the highest since March 1992. The participation rate rose slightly to 59.3%.”
“Despite the encouraging trend, compensation is still not rising meaningfully.”
“Japan reported December national and Tokyo January CPI. The former came in at 2.4% y/y vs. 2.3% consensus, while the latter came in at 2.3% vs. 2.2% consensus. Ex-fresh food and energy measures for both series were largely close to consensus.”
“Japan also reported December IP up 1.0% m/m vs. 1.2% consensus and -0.5% in November, as well as overall household spending at -3.4% y/y vs. -2.3% consensus.”
“Overall, the data support the notion that the economy remains hobbled by the consumption tax hike, with consumer spending weak and inflation still likely to come in under target.”