Tuesday December 26 2017
Japan Inflation Rate Rises More than Estimated
Statistics Japan l Rida Husna | rida@tradingeconomics.com

Consumer prices in Japan rose 0.6 percent year-on-year in November of 2017, following a 0.2 percent gain in the prior month. The figure was slightly above market consensus of 0.5 percent, due to a jump in cost of transport while prices of food fell much less than in the prior month.

In November, prices of food declined by 0.1 percent year-on-year, much slower than a 1.3 percent fall in October, namely, fresh food (-6.1 percent from -12.1 percent), fish and seafood (4.7 percent from 5.3 percent) and fresh fruits (-5.3 percent from -5.4 percent). Also, prices fell less for dairy product and eggs (-0.4 percent from -0.5 percent).

Meanwhile, prices increased more for: transport & communication (0.8 percent, after being flat in a month earlier) and miscellaneous (0.5 percent from 0.2 percent). In addition, cost rebounded for culture and recreation (0.3 percent from -0.1 percent). At the same time, inflation was steady for: medical care (at 1.6 percent) and education (at 0.4 percent). Meantime, cost went up less for fuel, light and water charges (5.9 percent from 6.2 percent), as cost of  of electricity went up at a slower 7.3 percent (from 7.9 percent in the prior two months).  

On the other hand, cost continued to fall for: housing (-0.1 percent from -0.1 percent); furniture and household utensils (-0.5 percent from -0.3 percent) and clothes and footwear (-0.3 percent from -0.1 percent).  

Core consumer prices, which exclude fresh food, rose 0.9 percent from a year earlier, after a 0.8 percent rise in October while markets expected 0.8 percent. It  was the highest figure since March of 2015.

On a monthly basis, consumer prices went up 0.7 percent, compared to a flat reading in the preceding two months. It was the highest monthly figure since April 2014.

In Tokyo, consumer prices rose 1.0 percent year-on-year in December 2016 while markets estimated a 0.6 percent rise. Core consumer prices, which exclude fresh food went up by 0.8 percent and slightly above expectations of a 0.7 percent gain.




Tuesday December 26 2017
Japan Jobless Rate Lowest Since November 1993
Statistics Japan | Rida Husna | rida@tradingeconomics.com

The unemployment rate in Japan edged down to 2.7 percent in November of 2017 from 2.8 percent in the prior five months and slightly below market consensus of 2.8 percent. It was the lowest jobless rate since November 1993. Meanwhile, the jobs-to-applicants ratio was up to 1.56 from 1.55 in October and in line with estimates. The figure stayed at its highest level since January 1974.

Compared to the previous month, there were 1.85 million unemployed persons, 20 thousand less than in October. Employment increased by 140 thousand to 65.58 million, after declining by 60 thousand in a month earlier. The labour force rose by 130 thousand to 67.45 million while those detached from the labour force went down by 110 thousand to 43.57 million.

Among people aged 15 to 24 years old, the jobless rate decreased to 4.1 percent from 4.5 percent in October.

A year earlier, unemployment was higher at 3.1 percent.




Thursday December 21 2017
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 December 2017 meeting, as expected. Policymakers also kept its 10-year government bond yield target around zero percent and offered a more upbeat view on private consumption and capital expenditure.

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 a 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 at moderate pace on the whole. In this situation, exports have been on an increasing trend. On the domestic demand side, business fixed investment has been 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 more or less flat. 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 in the range of 0.5 to 1 percent. Inflation expectations have remained in a weakening phase.

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 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; prospects regarding the European debt problem, including the financial sector, 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.




Monday December 18 2017
Japan Unexpectedly Records Trade Surplus in November
Ministry of Finance, Japan | Joana Taborda | joana.taborda@tradingeconomics.com

Japan posted a JPY 113.4 billion trade surplus in November of 2017, following a JPY 146.5 billion surplus a year earlier and beating market expectations of a JPY 55 billion deficit. Exports jumped 16.2 percent year-on-year with sales to China hitting a record high. Meanwhile, imports grew 17.2 percent, reaching the highest since July of 2015.

Exports grew 16.2 percent year-on-year to JPY 6920.4 billion in November of 2017, above market expectations of a 14.6 percent rise. Sales of machinery went up 22.9 percent, namely semicon (54.7 percent); construction (38.8 percent); electrical (16.2 percent) like semiconductors (14.2 percent). Also, sizable growth was reported for manufactured goods (19.6 percent) such as iron and steel products (27.9 percent); chemicals (20 percent); transport equipment (7.1 percent) like motor vehicles (7.7 percent); mineral fuels (50.7 percent); raw materials (25.1 percent) and foodstuff (15.2 percent). Exports rose to all main partners: China (25.1 percent), hitting a record high of JPY 1379.7 billion; the US (13 percent); the EU (13.3 percent) and South Korea (20.5 percent). 
 
Shipments rose for all main partners: China (25.1 percent), hitting a record high of JPY 1379.7 billion; the US (13 percent); the EU (13.3 percent) and South Korea (20.5 percent).
 
Imports went up 17.2 percent to JPY 6807 billion, below expectations of an 18 percent rise. Main upward pressure came from purchases of electrical machinery (27.5 percent); mineral fuels (21.9 percent); manufactured goods (22.1 percent); machinery (16.5 percent); raw materials (23.9 percent) and fish (12.2 percent).
 
Purchases rose from China (21.6 percent); the US (12.3 percent); the EU (6.8 percent) and the Middle East (23 percent). 




Friday December 08 2017
Japan Q3 GDP Growth Revised Up to 0.6%
Cabinet Office l Rida Husna | rida@tradingeconomics.com

The Japanese economy advanced 0.6 percent quarter-on-quarter in the September quarter of 2017, stronger than the preliminary estimate of a 0.3 percent expansion and following an upwardly revised 0.7 percent growth in the prior quarter. It was the seventh straight quarter of growth, supported by exports and faster increase in business spending.

In the three months to September, net exports added 0.5 percentage points to the growth, private non-residential investment/business spending contributed 0.2 percentage points and government spending gave no contribution to growth. On the other had, household consumption substracted 0.3 percentage points from the growth. Meantime, changes in private inventories made no contribution to growth.
Compared to the second quarter, private consumption declined by 0.5 percent, the first drop since the fourth quarter 2015. The figure was similar to the preliminary estimate, in line with market consensus, and following a 0.9 percent increase in the second quarter.
Government expenditure was flat (compared to a 0.1 percent contraction in the preliminary estimate and following a 0.2 percent rise in the prior quarter). Public investments dropped by 2.4 percent (compared to a 2.5 percent fall in the preliminary estimate and after a 4.6 percent rise in Q2).
Private non-residential investment increased by 1.1 percent (much stronger than the preliminary figures of a 0.2 percent gain, higher than market consensus of a 0.4 percent rise and following a 1.2 percent increse in the preceding quarter). Meanwhile, private residential investment shrank by 1.0 percent (compared to the preliminary estimates of a 0.9 percent decline and following a 1.3 percent growth in the June quarter).
Exports of goods and services expanded by 0.5 percent (the same as in the preliminary figures and after a 0.1 percent drop in Q2; imports decreased by 1.6 percent (unchanged from the preliminary estimates and following a 1.5 percent rise in Q2).
On an annualised basis, the economy grew by 2.5 percent, faster than the preliminary estimate of a 1.4 percent expansion and way above market expectations of a 1.5 percent growth.




Friday December 01 2017
Japan Jobless Rate Steady at 2.8% for 5th Month
Statistics Japan l Rida Husna | rida@tradingeconomics.com

The unemployment rate in Japan stood at 2.8 percent in October of 2017, the same as in the prior four months. The figure was in line with market consensus and remained at its lowest in 23 years. Meanwhile, the jobs-to-applicants ratio was at 1.55, up from 1.52 in the previous month while market expected 1.53. It was the highest level since January 1974.

Compared to the previous month, there were 1.87 million unemployed persons, a thousand more than in September. Employment dropped by 6 thousand to 65.44 million, after declining by 15 thousand in a month earlier. The labour force fell by 6 thousand to 67.32 million while those detached from the labour force went up by 3 thousand to 43.68 million.

Among people aged 15 to 24 years old, the jobless rate decreased to 4.5 percent from 5.1 percent in September.

A year earlier, unemployment was higher at 3.0 percent.


Friday December 01 2017
Japan Inflation Rate at 7-Month Low of 0.2% in October
Statistics Japan l Rida Husna | rida@tradingeconomics.com

Consumer prices in Japan rose 0.2 percent year-on-year in October of 2017, following a 0.7 percent increase in the prior two months and matching market consensus. It was the lowest inflation rate since March, as cost of transport was flat while prices of food fell for the first time since June 2013 and cost of housing continued to decline.

In October, prices of food declined by 1.3 percent year-on-year (after a 1.0 percent rise in September), namely, fresh food (-12.1 percent from 1.2 percent), fish and seafood (5.3 percent from 5.6 percent) and fresh fruits (-5.4 percent from 3.6 percent). Also, prices fell at a faster rate for dairy product and eggs (--0.5 percent from -0.4 percent).

Meantime, prices increased less for medical care (1.6 percent from 1.8 percent), while went up at a faster pace for: fuel, light and water charges (6.2 percent from 6.0 percent), as cost of  of electricity was steady (at 7.9 percent) and miscellaneous (0.2 percent from 0.1 percent)

Cost was flat for transport & communication (the same as in a month earlier) and inflation was steady for education (at 0.4 percent).

On the other hand, cost fell for: housing (-0.1 percent from -0.2 percent); furniture and household utensils (-0.3 percent from -0.2 percent); clothes and footwear (-0.1 percent from -0.3 percent) and culture and recreation (-0.1 percent from 0.2 percent).

Core consumer prices, which exclude fresh food, went up 0.8 percent from a year earlier, after a 0.7 percent rise in Septemberthe same pace as in August and in line with estimates. It  was the highest figure since March of 2015.

On a monthly basis, consumer prices were flat, the same as in September.

In Tokyo, consumer prices rose 0.3 percent year-on-year while markets estimated a 0.1 percent fall. Core consumer prices, which exclude fresh food went up by 0.6 percent and in line with consensus.


Monday November 20 2017
Japan October Trade Surplus Narrows 41% YoY
Ministry of Finance, Japan | Chusnul Ch Manan | chusnul@tradingeconomics.com

Japan's trade surplus narrowed 40.7 percent to JPY 285.4 billion in October 2017 from JPY 481.26 billion in the same month a year earlier and below market consensus of a JPY 330 billion surplus. Exports rose 14 percent from a year earlier to JPY 6,693.1 billion while imports increased at a faster 18.9 percent to JPY 6,407.7 billion.

Exports from Japan rose 14 percent from the previous year to JPY 6,693.1 billion in October, easing from a 14.1 percent gain in the previous month and missing market expectations of 15.8 percent. It was the 11th consecutive increase in exports, mainly boosted by a surge in exports of cars (6 percent), parts of motor vehicles (6.5 percent), and chemical products (23.4 percent). Also, sales of machinery went up 17.8 percent, boosted by power generating machine (10.5 percent) and semicon machinery (29.5 percent). Sales of manufactured goods increased by 15.2 percent, led by iron and steel products (15.6 percent). In addition, exports of electrical machinery rose 11.4 percent, mainly driven by semiconductors (9.1 percent) and IC (10.5 percent). Exports of others rose 16.5 percent, driven by scientific, optical instruments (16.1 percent).
 
Among major trading partners, exports rose to China (26 percent); the US (7.1 percent); the EU (15.8 percent), of which Germany (10.2 percent); the ASEAN (19.5 percent), South Korea (18.3 percent), and Taiwan (4.8 percent).
 
Imports to Japan rose at a faster 18.9 percent to JPY 6,407.7 billion, accelerating from a 12 percent expansion in the previous month and missing expectations of 20.2 percent. Imports grew for mineral fuels (37.5 percent), of which petroleum (43 percent), LNG (15.5 percent) and coal (36.6 percent); electrical machinery (15 percent), of which semiconductors (23 percent) and IC (33.3 percent); foodstuff (21.1 percent); raw materials (17. 5 percent); chemicals (9.5 percent); manufactured goods (17.1 percent), of which nonferrous metals (28.4 percent); machinery (10.3 percent); transport equipment (1.9 percent); and others (21.1 percent).
 
Among major trading partners, imports rose from China (14.3 percent); the US (3.1 percent); the ASEAN (21.8 percent); Taiwan (22.7 percent); South Korea (12.2 percent); the EU (18.1 percent), of which Germany (19.8 percent) and Australia (12.6 percent).
 


Wednesday November 15 2017
Japan GDP Growth Slows to 0.3% in Q3
Cabinet Office l Rida Husna | rida@tradingeconomics.com

The Japanese economy advanced 0.3 percent on quarter in the three months to September of 2017, following a 0.6 percent expansion in the previous period and matching market consensus, the preliminary estimate showed. Growth was mainly supported by exports while business spending rose at a slower pace and private consumption fell for the first time in near two years.

The positive contribution to GDP largely came from net exports (0.5 percentage points). On the other hand, household consumption substracted 0.3 percentage points from the growth while capital expenditure and government spending gave no contribution to growth. Meanwhile, changes in private inventories added 0.2 percentage points from quarterly growth. 

Private consumption declined by 0.5 percent, following a 0.7 percent increase in the second quarter and worse than expectations of a 0.4 percent drop. It marked the first decline in private spending since the fourth quarter 2015, due to adverse weather.

Government expenditure contracted 0.1 percent, after a 0.6 percent growth in the prior three months. Meanwhile, public investments slumped by 2.5 percent, after increasing 5.8 percent in Q2.

Business spending rose 0.2 percent, much slower than a 0.5 percent growth  in the June quarter while market expected a 0.3 percent rise. Meantime, private residential investment contracted by 0.9 percent, reversing from a 1.1 percent  gain in the third quarter.

Exports of goods and services grew by 1.5 percent, swinging from a 0.2 percent fall in Q2; while imports dropped by 1.6 percent, following a 1.4 percent gain in the previous three-month period.

On an annualised basis, the GDP expanded 1.4 percent, compared to an upwardly revised 2.6 percent growth in the third quarter and slightly above estimates of a 1.3 percent expansion. The Japanese economy has now expanded in seven straight quarters, the longest period of uninterrupted growth in more than a decade.


Tuesday October 31 2017
BoJ Holds Monetary Policy Steady; Trims Inflation Outlook
Bank of Japan | Rida Husna | rida@tradingeconomics.com

The Bank of Japan left its key short-term interest rate unchanged at -0.1 percent at its October 2017 meeting, as expected. Policymakers also kept its 10-year government bond yield target around zero percent but trimmed inflation forecast to 0.8 percent for fiscal 2017 from 1.1 percent, as firms' wage and price-setting stance has remained cautious.

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 a 8-1 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.  

Meanwhile in a quarterly review of the central bank's forecasts, the BoJ lowered its core CPI forecast for fiscal 2017 to 0.8 percent from the previous estimate of 1.1 percent, mainly due to the effects of a reduction in changes for mobile phones. At the same time, firms' wage and price-setting stance has remained cautious despite the steady tightening of labor market and the high levels of corporate profits. Meanwhile the timing for inflation to reach 2 percent will likely be around fiscal 2019. Regarding the GDP, the central bank said the projected growth rates are more or less unchanged from an earlier projection.

Excerpts from the Outlook for Economic Activity and Prices:

Japan's economy is likely to continue its moderate expansion. Through fiscal 2018, domestic demand is likely to follow an uptrend, with a virtuous cycle from income to spending being maintained in both corporate and household sectors on the back of highly accommodative financial conditions and fiscal spending through the government's large stimulus measures. Business fixed investment is likely to continue increasing moderately, supported by acccommodative financial conditions, heightened growth expectations and increases in Olympic Games-related investment, as well as in labor-saving investment to address the labor shortage. Private consumption is also expected to follow a moderate increasing trend as emplyment and income situation continues to improve. Public investment is projected to increase in fiscal 2017, due to positive effects resulting from  a set of stimulus measures. At the same time, exports are expected to continue their moderate increasing trend on the back of such growth in overseas economies.

For fiscal 2018, the economy is expected to expand by 1.4 percent, unchanged from an earlier projection. Core CPI for the year is projected to   rise by 1.4 percent, down slightly from an earlier forecast of 1.5 percent.