Something for your Espresso: There is no inflation problem in Japan
Morning from Europe.
Japanese inflation was surprisingly a tad on the topside of expectations, which were admittedly super dovish. Core inflation (ex fresh food and energy) printed at -0.03% MoM, which was “hot” enough for Japanese inflation to surprise 0.3%-points on the topside of expectations.
In the bigger scheme of things, Japanese inflation is vastly undershooting the trend projections in BoJs forecasts. Over the past three months, the annualized QoQ core inflation rate is 0.2%, which is miles below the trend projected for the fiscal year of 2024 from the BoJ.
Chart 1: Inflation is trending towards 0% in Japan
Japanese inflation has been trending clearly below 2% over the past 3-4 months and it seems like the so-called “inflation-problem” is non-existent in Japan. Meanwhile, China continues to look like a compelling case.
0 Comments