Friday April 20 2018
Japan Inflation Rate at 3-Month Low of 1.1 % in March
Statistics Japan | Rida Husna | rida@tradingeconomics.com

Consumer prices in Japan rose by 1.1 percent year-on-year in March of 2018, after a 1.5 percent gain in the prior month and matching market consensus. It is the lowest inflation rate since December 2017, mainly due to a marked slowdown in cost of food.

In March, prices of food increased by 1.9 percent year-on-year, much slower than a 3 percent rise in February. It is the lowest food inflation in three months as cost rose less for fresh food (6.3 percent from 12.4 percent) and fresh fruits (3.3 percent from 5.6 percent), while continued to rise for fish and seafood (4.3 percent from 4.3 percent). Meantime, prices of dairy product and eggs continued to fall (-0.3 percent from -0.3 percent).

In addition, cost went up at a slower pace for: fuel, light and water charges (4 percent from 4.3 percent, as cost of electricity increased by 5.2 percent, following a 5.8 percent rise in the prior month); medical care (1.7 percent from 1.8 percent); education (0.3 percent from 0.4 percent); culture and recreation (0.5 percent from 1.3 percent) and miscellaneous (0.5 percent from 0.6 percent). At the same time, prices were flat for clothes and footwear (from 0.3 percent), fell more for housing (-0.2 percent compared to -0.1 percent) and continued to decline for furniture and household utensils (-1.4 percent from -1.7 percent). On the other hand, prices increased more for transport & communication (1.7 percent from 1.5 percent).

Core inflation rate, which excludes fresh food, edged down to 0.9 percent from 1 percent in February, matching expectations. 

On a monthly basis, consumer prices declined by 0.4 percent, following a 0.1 percent increase in the preceding month and marking the first drop since March 2017.




Wednesday April 18 2018
Japan Posts Largest Trade Surplus in Over a Year
Ministry of Finance l Rida Husna | rida@tradingeconomics.com

Japan's trade surplus widened 32.1 percent to JPY 797.3 billion in March 2018 from JPY 603.5 billion in the same month a year earlier and far above market expectations of a JPY 498 billion surplus. It was the largest trade surplus since February last year.

Exports increased by 2.1 percent year-on-year to JPY 7,382 billion in March, following a 1.8 percent rise in the previous month and missing market expectations of 4.7 percent growth. Sales of machinery went up 10.2 percent, namely power generating machine (10.8 percent) and semicon machinery (16.8 percent). Also, exports rose for electrical machinery (3.2 percent), of which semiconductors (4.3 percent); chemicals (8.2 percent); and manufactured goods (4.6 percent). In contrast, sales fell for transport equipment (-1.7 percent), namely bus & truck (-5.5 percent), ships (-29.6 percent), and aircraft (-18.7 percent); and others (-9.3 percent), of which scientific, optical instruments (-2.4 percent).

Exports rose to Asia (4.5 percent), mainly to China (10.8 percent), Taiwan (0.7 percent), Thailand (13.8 percent); the US (0.2 percent); the EU (0.3 percent), mainly Germany (9.6 percent) and the Netherlands (5.8 percent); and the Middle East (9.3 percent). By contrast, exports fell to Hong Kong (-15.5 percent), South Korea (-3.2 percent), Singapore (-0.9 percent) and the UK (-29.2 percent). 

Imports unexpectedly declined by 0.6 percent to JPY 6,585 billion in March, compared to a 16.6 percent surge in the preceding month and also missing market consensus of a 5.4 percent gain. It was the first import contraction since December 2016, as purchases fell for: electrical machinery (-6.4 percent), of which semiconductors (-3.7 percent) and telephony, telegraphy (-5.8 percent); and others (-13.4 percent), namely clothing and accessories (-20.1 percent). Also, inbound shipments of manufactured goods declined 4.7 percent, due to iron & steel products (-4.1 percent) and manufactures of metals (-13.5 percent); and purchases of foodstuff decreased 5.2 percent, namely fish and fish preparation (-12.6 percent) and meat and meat preperation (-4.3 percent). In contrast, imports grew for: mineral fuels (6.9 percent), namely petroleum (5.7 percent); chemicals (1.2 percent); machinery (6.6 percent), of which computers and units (9.4 percent); and transport equipment (18.3 percent), namely motor vehicles (45.8 percent).

Among major trading partners, imports fell from China (-16.8 percent) and Saudi Arabia (-10.2 percent), while increased from Taiwan (3.2 percent), South Korea (12.8 percent), the US (0.6 percent), Germany (21.2 percent) and the UAE (20.8 percent).

In the first quarter of the year, Japan posted a trade deficit of JPY 148.4 billion, compared with a JPY 316.1 billion surplus in the same period of the previous year.





Friday March 30 2018
Japan Jobless Rate Edges Up to 2.5% in February
Statistics Japan l Rida Husna | rida@tradingeconomics.com

The unemployment rate in Japan rose slightly to 2.5 percent in February of 2018 from 2.4 percent in the prior month while markets estimated 2.6 percent. Meanwhile, the jobs-to-applicants ratio unexpectedly slipped to 1.58 from 1.59 in the preceding month and missing consensus of 1.6.

Compared to the previous month, there were 1.69 million unemployed persons, 90 thousand more than in January. Employment increased by 510 thousand to 66.46 million, after an increase of 420 thousand in a month earlier. The labour force rose by 600 thousand to 68.14 million while those detached from the labour force dropped by 570 thousand to 42.84 million.

Among people aged 15 to 24 years old, the jobless rate increased markedly to 4.2 percent from 3.3 percent in January.

A year earlier, unemployment was higher at 2.9 percent.




Friday March 23 2018
Japan Inflation Rate at 35-Month High of 1.5% in February
Statistics Japan l Rida Husna | rida@tradingeconomics.com

Consumer prices in Japan rose by 1.5 percent year-on-year in February of 2018, after a 1.4 percent gain in the prior month while markets estimated 1.7 percent. It is the highest inflation rate since March 2015, due to a jump in cost of transport and a further increase in cost of food.

In February, prices of food increased by 3 percent year-on-year, following a 3.2 percent rise in January, namely fresh food (12.4 percent from 12.5 percent), fish and seafood (4.3 percent from 5.2 percent) and fresh fruits (5.9 percent from 4.4 percent). Meantime, prices fell for dairy product and eggs (-0.3 percent from a flat reading in a month earlier).

In addition, cost went up at a faster pace for: medical care (1.8 percent from 1.6 percent); transport & communication (1.5 percent from 0.7 percent); culture and recreation (1.3 percent from 0.5 percent) and miscellaneous (0.6 percent from 0.5 percent). At the same time, cost increased less for clothes and footwear (0.3 percent from 0.5 percent) and fuel, light and water charges (4.3 percent from 4.6 percent, as cost of electricity went up 5.8 percent, after a 6.4 percent rise in the prior month). Inflation was steady for education (0.4 percent). 

On the other hand, prices continued to fall for housing (-0.1 percent from -0.1 percent) and furniture and household utensils (-1.7 percent from -1.2 percent)

Core inflation rate, which exclude fresh food, rose by 1 percent from a year earlier and matching expectations. It is the highest level since March of 2015.

On a monthly basis, consumer prices went up 0.1 percent, compared to a 0.4 percent increase in the preceding month.


Monday March 19 2018
Japan Trade Surplus Narrows Sharply in February
Ministry of Finance, Japan | Joana Ferreira | joana.ferreira@tradingeconomics.com

Japan's trade surplus narrowed 99.6 percent to JPY 3 billion in February 2018 from JPY 805 billion in the same month a year earlier, but beating market expectations of a JPY 100 billion deficit.

Imports jumped 16.5 percent from the previous year to JPY 6,460 billion in February, missing expectations of a 17.1 percent climb but above the 7.9 percent growth recorded in January. Imports rose mostly for: mineral fuels (10.8 percent), of which petroleum (2.5 percent), LNG (18.8 percent) and coal (4.7 percent); electrical machinery (12.3 percent), of which telephone sets (32.7 percent); others (22.3 percent), of which clothing and accessories (38.4 percent) and scientific, optical instruments (12.6 percent); machinery (21.2 percent); chemicals (22.9 percent); foodstuff (21.2 percent); manufactured goods (22.3 percent); and raw materials (20.3 percent). Meanwhile, imports of transport equipment fell 4.2 percent.

Among major trading partners, imports rose from China (39.2 percent), South Korea (17.9 percent), Taiwan (8.6 percent), Australia (18.4 percent), the US (5.2 percent), Germany (10.3 percent) and Saudi Arabia (18.3 percent).

Exports rose at a softer 1.8 percent to JPY 6,463 billion, following a 12.3 percent growth in January and compared to a consensus of 1.9 percent. Sales of transport equipment went up 11.4 percent, boosted by cars (17.9 percent), while those of machinery and electrical machinery dropped 0.6 percent and 3.1 percent, respectively.

Exports rose to the EU (11.5 percent), the US (4.3 percent) and South Korea (0.7 percent), but fell to China (-9.7 percent) and Taiwan (-6.3 percent).


Friday March 09 2018
BoJ Leaves Monetary Policy Unchanged
Bank of Japan l Rida Husna | rida@tradingeconomics.com

The Bank of Japan left its key short-term interest rate unchanged at -0.1 percent at its March 2018 meeting, as expected. Policymakers also kept its 10-year government bond yield target around zero percent and maintained its upbeat economic view ahead of new term for Governor Haruhiko Kuroda.

With regard to the amount of JGBs to be purchased, the Bank will conduct buying at more or less the current pace -- an annual pace of increase of about 80 trillion yen.

The BoJ also determined by an unanimous vote to purchase exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) so that their amounts outstanding will increase at an annual paces of about JPY 6.0 trillion and about JPY 90 billion, respectively. As for CP and corporate bonds, the Bank will maintain their amounts outstanding at about 2.2 trillion yen and about 3.2 trillion yen respectively.  

Excerpts from the Statement by the Bank of Japan:

Japan's economy is expanding moderately, with a virtuous cycle from income to spending opearting. Overseas economies have continued to grow firmly on the whole. In this situation, exports have been on an increasing trend. On the domestic demand side, business fixed investment has continued on an increasing trend with corporate profits and business sentiment improving.  Private consumption has been increasing moderately, albeit with fluctuations, against the background of steady improvement in the employment and income situation. Housing investment has been weakening somewhat. Meanwhile, public investment has been more or less flat, remaining at a relatively high level. Reflecting these increases in demand both at home and abroad, industrial production has been on an increasing trend, and labor market conditions have continued to tighthen steadily. Financial conditions are highly accommodative. On the price front, the year-on-year rate of change in the consumer price index (CPI, all items less fresh food) is around 1 percent. Inflation expectations have been more or less unchanged.

With regard to the outlook, Japan's economy is likely to continue its moderate expansion. Domestic demand is likely to follow an uptrend, with a virtuous cycle from income to spending being maintained in both the household and corporate sectors, on the back of highly accommodative financial conditions and underpinnings through the government's past stimulus measures. Exports are expected to continue their moderate increasing trend on the back of the firm growth in overseas economies. The year-on-year rate of change in the CPI is likely to continue on an uptrend and increase toward 2 percent, mainly on the back of an improvement in the output gap and a rise in medium-to long-term inflation expectations.

Risks to the outlook include the following: the US economy policies and the impact on global financial markets; developments in emerging and commodity-exporting economies; negotiations on the United Kingdom's exit from the European Union (EU) and their effects, and geopolitical risks.

The Bank will continue with "Quantitative and Qualitative Monetary Easing (QQE) with a Negative Interest Rate," aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner. It will continue expanding the monetary base until the year-on-year rate of increase in the observed CPI (all items less fresh food) exceeds 2 percent and stays above the target in a stable manner. The Bank will make policy adjustments as appropriate, taking account of developments in economc activity and prices as well as financial conditions, with a view to maintaining the momentum toward achieving the price stability target.




Thursday March 08 2018
Japan Q4 GDP Growth Revised Up to 0.4%
Cabinet Office l Rida Husna | rida@tradingeconomics.com

The Japanese economy advanced 0.4 percent quarter-on-quarter in the December quarter of 2017, much stronger than the preliminary estimate of a 0.1 percent expansion and after a 0.6 percent growth in the prior quarter. It was the eighth straight quarter of expansion, due to strong private consumption and an upward revision of business spending and inventories.

In the three months to December, household consumption added 0.3 percentage points to growth, private non-residential investment/business spending contributed 0.2 percentage points and changes in private inventories added 0.1 percentage points. Meantime, government spending and net exports gave no contribution to growth. 

Compared to the third  quarter, private consumption increased by 0.5 percent (similar to the preliminary estimate, in line with market consensus and rebounding from a  0.6 percent fall in the third quarter).

Government expenditure was flat (compared to a 0.1 percent contraction in the preliminary estimate and following a 0.1 percent rise in the prior quarter). Public investments dropped by 0.2 percent (compared to a 0.5 percent fall in the preliminary estimate and after a 2.6 percent decline in Q3).

Private non-residential investment rose by 1 percent (stronger than the preliminary figures of a 0.7 percent increase, compared to  consensus of a 1.2 percent rise and the same as in the preceding quarter). Meanwhile, private residential investment shrank by 2.6 percent (compared to the preliminary estimates of a 2.7 percent decline and following a 1.7 percent fall in the September quarter).

Exports of goods and services expanded by 2.4 percent (the same as in the preliminary figures and after a 2.1 percent rise in Q3); imports grew by 2.9 percent (unchanged from the preliminary estimates and following a 1.2 percent decline in Q3).

On an annualised basis, the economy grew by 1.6 percent, much faster than the preliminary estimate of a 0.5 percent expansion and beating expectations of a 0.9 percent growth.




Friday March 02 2018
Japan Jobless Rate Lowest Since April 1993
Statistics Japan | Rida Husna | rida@tradingeconomics.com

The unemployment rate in Japan dropped sharply to 2.4 percent in December of 2017 from 2.8 percent in the prior month and below market consensus of 2.7 percent. It was the lowest jobless rate since April 1993. Meanwhile, the jobs-to-applicants ratio stood at 1.59, the same as in the preceding month but slightly less than estimates of 1.6. It remained the highest figure since January 1974.

Compared to the previous month, there were 1.6 million unemployed persons, 230 thousand less than in December. Employment increased by 420 thousand to 65.95 million, after a decline of 20 thousand in a month earlier. The labour force rose by 160 thousand to 67.54 million while those detached from the labour force dropped by 180 to 43.41 million.

Among people aged 15 to 24 years old, the jobless rate fell significantly to 3.3 percent from 4.6 percent in December.

A year earlier, unemployment was higher at 3 percent.


Friday February 23 2018
Japan Inflation Rate at 34-Month High of 1.4% in January
Statistics Japan l Rida Husna | rida@tradingeconomics.com

Consumer prices in Japan rose by 1.4 percent year-on-year in January of 2018, after a 1.0 percent gain in the prior month while markets estimated 1.3 percent. It was the highest inflation rate since March 2015, mainly driven by a jump in cost of food.

In January, prices of food increased by 3.2 percent year-on-year, following a 1.8 percent rise in December. It was the highest food inflation since November 2016, as cost surged for fresh food (12.5 percent from 4.8 percent), while continued to rise for fish and seafood (5.2 percent from 5.6 percent) and rebounded for fresh fruits (4.4 percent from -0.4 percent). Meantime, prices were flat for dairy product and eggs ( from -1.1 percent in a month earlier).

In addition, cost rebounded for clothes and footwear (0.5 percent from -0.3 percent) and went up at a faster pace for culture and recreation (0.5 percent from 0.4 percent). At the same time, cost increased less for: miscellaneous (0.5 percent from 0.7 percent); fuel, light and water charges (4.6 percent from 5.2 percent, as cost of electricity went up by 6.4 percent, after a 6.7 percent rise in the prior month) and transport & communication (0.7 percent from 0.8 percent). Inflation was steady for: medical care (1.6 percent) and education (0.4 percent). 

On the other hand, prices continued to fall for: housing (-0.1 percent from -0.1 percent) and furniture and household utensils (-1.2 percent from -0.9 percent)

Core inflation rate, which exclude fresh food, remained at 0.9 percent, it highest since March of 2015.

On a monthly basis, consumer prices went up 0.4 percent, compared to a 0.2 percent increase in the preceding month.


Monday February 19 2018
Japan Trade Deficit Narrows More than Expected
Ministry of Finance, Japan | Joana Taborda | joana.taborda@tradingeconomics.com

The trade gap in Japan decreased to JPY 943 billion in January of 2018 from JPY 1092 billion a year earlier and below market expectations of JPY 1002 billion. Exports jumped 12.2 percent year-on-year, beating forecasts of a 10.3 percent rise and marking the 14th straight month of gains. Imports rose at a slower 7.9 percent, below expectations of an 8.3 percent gain but reaching the highest value in 3 years.

Exports rose 12.2 percent year-on-year to JPY 6085 billion, beating forecasts of a 10.3 percent rise. Main upward contributions came from shipments of machinery (up 19.6 percent), namely semicon machinery (3.7 percent); chemicals (17.3 percent); electrical machinery (11.6 percent), namely electrical apparatus (17.8 percent); cars (6.6 percent); manufactured goods (14.3 percent), namely iron and steel products (10 percent) and nonferrous metals (27.4 percent).
 
Sales rose to all main export partners: China (30.8 percent), the US (1.2 percent), South Korea (7.6 percent), Taiwan (9.8 percent), Hong Kong (11.6 percent), Thailand (5.4 percent), Germany (21 percent),  Australia (2.8 percent), the UK (35 percent), Vietnam (21.9 percent), Indonesia (23.5 percent), the Netherlands (5.2 percent).
 
Imports went up 7.9 percent year-on-year to JPY 7029 billion, slightly below forecasts of an 8.3 percent rise. Main upward contribution came from mineral fuels (up 9.7 percent), namely petroleum (11.4 percent); and chemicals (20.1 percent), namely medical products (25.3 percent).
 
Purchases rose from India (12 percent), the Middle East (15.4 percent) and the US (9.4 percent) but fell from China (-3.3 percent).