Japan – taking stock
The BOJ became more positive in 1H24, and labour market and price data since should have increased confidence further. So we think the bank hikes next week, with a probability of 60%. That our conviction isn't stronger still is because of the implications of the June non-decision on JGB purchases.
Japan – inflation stable
Inflation was largely unchanged in July. Services inflation was a bit higher, but for the BOJ these data are probably less important than the results of the strong Tankan earlier in the month.
Japan – more evidence of a shift
The one-off firm survey undertaken as part of its long-term policy review has allowed the BOJ to reiterate its positive stance, and provide more of the evidence underpinning it.
Japan – inflation up, labour market tightening
The BOJ has been expressing confidence that inflation is getting to 2%. The Tankan can only reinforce that: the labour market tightened, and output prices rose again. The BOJ should be tightening.
Japan – no change in the Tankan
There's nothing in the Q2 Tankan to change the BOJ's view of the economy, with sentiment stable, the labour market tight, and inflation elevated. Separately, consumer confidence in June ticked up.
Japan – core Tokyo CPI still close to 2%
Today's data releases show stronger Tokyo inflation, headline and core; no big change in the labour market; and a rise in IP.
Japan – firm upstream services inflation
April SPPI was revised down, but the SAAR through May remains around 4%. With wage growth up, the BOJ's new measures of SPPI by labour content suggest inflation remains well-supported.
Japan – self-generated stagflation
Catching up on wages, inflation, activity and the BOJ. Overall, growth is weaker, and inflation stronger, trends that are likely to intensify after the bank's lack of action earlier this month.
Region – BOJ and CBC
Given the confidence the bank has been expressing, the BOJ meeting this week was disappointing. By raising the RRR, Taiwan's CBC, by contrast, was somewhat hawkish.