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28 Feb 2014
Flash: Positive CPI data welcomed in Japan - BTMU
FXStreet (Barcelona) - Derek Halpenny, European Head of Currency Strategy at the Bank of Tokyo Mitsubishi UFJ, remarked that Japanese domestic demand is improving.
Key Quotes
"While CNY has grabbed the attention in foreign exchange, we did also get the usual month-end deluge of key economic reports from Japan and the widely predicted upturn in domestic demand ahead of the sales tax increase from April looks to be happening. Industrial production surged by 4.0% m/m in January while the annual growth rate in retail trade accelerated from 2.5% to 4.4% in January."
"Big ticket items like transport equipment and business machinery were the main drivers in the production surge. In a positive for potential wage growth ahead, the jobs-to-applicant ratio increased from 1.03 to 1.04 in January, the highest since August 2007."
"There was good news on inflation too with all the key inflation measures from Tokyo coming in higher than expected. We see little policy implications from today’s data – the BOJ may well be reassured that demand is strengthening as expected and that inflation in Tokyo ticked higher, but the real test for policymakers will come once the sales tax is implemented and demand falls sharply in Q2."
Key Quotes
"While CNY has grabbed the attention in foreign exchange, we did also get the usual month-end deluge of key economic reports from Japan and the widely predicted upturn in domestic demand ahead of the sales tax increase from April looks to be happening. Industrial production surged by 4.0% m/m in January while the annual growth rate in retail trade accelerated from 2.5% to 4.4% in January."
"Big ticket items like transport equipment and business machinery were the main drivers in the production surge. In a positive for potential wage growth ahead, the jobs-to-applicant ratio increased from 1.03 to 1.04 in January, the highest since August 2007."
"There was good news on inflation too with all the key inflation measures from Tokyo coming in higher than expected. We see little policy implications from today’s data – the BOJ may well be reassured that demand is strengthening as expected and that inflation in Tokyo ticked higher, but the real test for policymakers will come once the sales tax is implemented and demand falls sharply in Q2."