Japan Industrial Production Slumps And Outright Deflation Draws Nearer

Japan’s recession evidently deepened even further in November as industrial output fell at the fastest pace in 55 years. Production plunged 8.1 percent month on month from October (Trade Ministry data) and was down an enormous 16.2% year on year. For an economy which lives from the prowess of its industrial exports, this is simply earthquake.The decline in production was the largest since data

Japan's Exports Fall Sharply In November

Japan’s exports fell the most on record in November, as global demand for cars and electronics collapsed, suggesting that more factory shutdowns and job cuts are likely as the recession deepens. Exports fell 26.7 percent from a year earlier, according to data from the Finance Ministry today (Monday). This was thus the largest fall since the data was first published in 1980.Exports to the U.S.

Did (or Didn't) Japan Just Re-introduce Quantitative Easing?

With the US Federal Reserve now adopting what is widely regarded as some variant of quantitative easing (QE), and with the Bank of Japan cutting interest rates amidst economic conditions which BoJ Governor Masaaki Shirakawa describes as "severe", perhaps it is worth taking time out to have a looking at some of the earlier experience of quantitative easing in Japan, in order to ask ourselves why

Bank exposure to US credit problems

Aozora Bank..."Aozora Bank Ltd., a midsize Japanese bank, said Tuesday it has up to 12.4 billion yen ($137 million) in indirect exposure to the massive Ponzi scheme run by Wall Street money manager Bernard Madoff...the development represents an unneeded distraction for the struggling lender, whose top shareholder is U.S. private-equity fund Cerberus Capital Management."US GSE's..."Japan's

Japanese government plans stock market action

Japan plans to buy $227 billion in shares to boost marketBy Michael Kitchen8:11 a.m. EST Dec. 18, 2008NEW YORK (MarketWatch) -- "Japan's government said Thursday it is submitting a bill to parliament allowing for the purchase of 20 trillion yen ($227 billion) in stock to help stabilize the Japanese stock market, Kyodo news reported.Under the bill, the Banks' Shareholding Acquisition Corporation,

Thoughts on deflation in Japan

The benefit from the negative energy price shock should provide some boost to domestic consumption. On the other hand, the rise of the yen versus the dollar to more realistic levels is no doubt more than offsetting the benefit from the fall in oil prices. At this point, I think the Japanese authorities are unable to do anything meaningful to weaken the yen. Also, the bulk of Japan's exports are

Japan's Contraction Is Evidently Far Worse Than Previously Estimated

Today's comments by Bank of Japan Governor Masaaki Shirakawa that conditions in Japan's economy are severe and that monetary conditions are rapidly tightening should not be taken lightly in my opinion. Viewed alongside last weeks data revision which showed that Japan’s gross domestic product contracted much more rapidly in the third quarter than initially thought, and the recent admission by

Japan Deflation Risk Grows As Industrial Output Falls Sharply

Japanese industrial output was down again sharply in October as manufacturers forcecast further record falls in the months to come, leading to warnings that Japan’s recession may well be much deeper and even longer than originally anticipated. This rather bleak news on Japanese factory output may also be a pointer to a longer and deeper global recession, as Japan's main customers - the euro zone

Exports Drop Sharply As Japan Officially Enters Recession

The Japanese cabinet officially recognised this week that Japan's economy has entered its first recession since 2001, following a second quarterly contraction in Q3 2008. Claus Vistesen has already analysed (in this post) the key issues which lie behind the present recession data, and has also, in this post today, attempted to place Japan's renewed deflation alert in a somewhat broader context.

Some Random Thoughts On The Deflation Problem

by Claus Vistesen: LausanneToday it is precisely one month ago that yours truly noted that he was swamped. He still is, but even though your author is still struggling to meet the quantitative demands of neo-classical graduate economics (especially, the statistical vintage) he still thinks that now might be as good a time as ever to jump back into the saddle and practice some economic punditry.

Japan Machinery Orders Fall As Small Business And Consumer Sentiment Hit Record Lows

Well, the outlook for the coming months in Japan looks none too positive, with machinery orders and small business sentiment both plumming the depths right now.Japanese machinery orders fell by 10.4 percent in the third quarter, equalling the biggest drop on record, as manufacturers cut their investment plans in anticipation of the impact of the global slowdown on overseas demand. The decline in

As The BOJ Cuts Rates Japan Grits Its Teeth For Another Bout Of Deflation

Well, suddenly Japan's economy seems to be back in the news. The BOJ today lowered interest rates, inflation seems to have peaked (and deflation may be once more looming on the horizon), householding spending is in decline, employment is falling, exports are languishing as the yen hits one high after another against both the dollar and the euro, Prime Minister Taro Aso is (despite the perilously

Japanese Retail Sales Fall In September

Well, this blog is pretty quiet at the moment, for this my apologies to our readers. Claus is up to his eyes in math in Lausanne, and I am pretty overwhelmed by what is happening in Eastern and Southern Europe at the moment. But don't worry, the interruption in service is only temporary. We will continue, the really interesting part is only just about to start.Basically, most of the things that

Japan Machine Orders Fall For A Third Consecutive Month

Well, while most of the attention out there is justifiably focused on the dramatic events of recent days in the financial markets, the real economy is where the impact of what is happening all ends up, and news on this from in Japan continues to be pretty bleak.Today we learnt that a key barometer of corporate capital spending in Japan plunged in August to its lowest level in more than five years

The Global Economy – Is Deflation the Next Macro Story?

As the horror story of financial markets continues at full speed it may seem a rather futile endeavor to try to make sense of what is increasingly becoming senseless by the day. Yet, you hardly need to be a financial literate to see that the world of finance and banking has been changed for good. I don't think this was neither unwarranted nor unexpected. At some point, US authorities had to let

Japan - While Consumer Inflation Falters, Wages Fall and Industrial Output Plummets

Japan seems to be really racking up a series of economic issues which lead me to think that this recession we are now entering which be neither short lived nor "light". Inflation continues to make its presence felt in a way which is not exactly disastrous after years of deflation, but which does mean that downward pressure on wages as the economy slows pushes consumption back, and that is just

Shutting Down the Samurais?

By Claus Vistesen: LausanneIt is not as if financial markets are short on action at the moment, and financial pundits and analysts are certainly being served an ample amount of ammunition from which to draw inspiration. With the recent news that Warren Buffet will be relinquishing his coffers of 7.5 billion to support the erstwhile jewel of investment banking Goldman Sachs, it is difficult for

Japan - The Recession is Here

By Claus Vistesen: LausanneIt has been a while since I last had Japan under the spotlight where and where I noted that Japan almost certainly would be tumbling into or very close to recession. Since then, data have been pointing only one way really and with the recent downward revision of an already quite awful Q2 GDP reading Japan now seems certain to be flirting with a recession. As per usual,

Japan Machinery Orders Fall For A Second Month in July

One important barometer of corporate capital spending fell for the second consecutive month in July, suggesting that manufacturers are bracing themselves for slower demand in the coming months. The Cabinet Office said Thursday core private-sector machinery orders, excluding the often volatile orders from electric power companies and for ships, fell 3.9 percent to 1.04 trillion yen ($9.67 billion)

Shares Up, Small Business Sentiment Down

Some rather contradictory pieces of news today. The Economy Watchers index is at a seven year low, Japanese stocks jump the most in five months, the yen falls the most in three months, bank lending remains almost stationary, while real estate bankruptcies surge. Make of all of this what you will, but the underlying reality is that we are now almost certainly in full recession as far as the

Inflation Accelerates Further In Japan, While Wages Stagnate and Spending Falls

Japan's consumer prices were up at the fastest date in more than a decade in July, while other data releases out in the last week show Japan's unemployment rate eased back from two-year high, household spending decreased, while industrial output rose.Inflation At Highest Level Since 1997Inflation in Japan, according to the general index, increased to 2.3% in July from 2% in June, thus clocking up

Japan's Imports Rebound In July, But Trade Surplus Narrows

Japan's exports rebounded in July, a month which saw China replace the U.S. as the nation's largest customer. Overseas shipments were 8.1 percent from a year earlier, after declining for the first time since 2003 in June, according to data from the Finance Ministry in Tokyo today. Exports to China climbed 16.8 percent while shipments to the U.S. were down 11.5 percent on the year.Exports to China

Japan's Economy Contracts In Q2 2008

Japan's economy contracted in the second quarter of 2008, bringing the country to the threshold of its first recession in six years, as exports fell and consumers spent less. Gross domestic product was up by 1% over the second quarter of 2007, but down by 0.6% over Q1 2008. So the recession many observers were anticipating in the last quarter of 2007 may now have arrived in the second quarter of

Japanese Consumer Confidence Drops Again In July

Japanese consumers became the most pessimistic they've been in at least 26 years, indicating their spending is unlikely to trigger a recovery in the world's second-largest economy. The sentiment index dropped to 31.4 last month from 32.6 in June, the Cabinet Office said today in Tokyo, the lowest since the government began compiling the figures in 1982. The government last week said Japan may be

Japan - Gearing Down for a Recession

By Claus Vistesen CopenhagenIn my last note on Japan, I asked how much longer Japan could continue to fight off the incoming recession faced with a continuing shaky outlook on exports as well as a domestic economy steadily slowing down. Well, it seems as if the answer to this question can now be provided. With the recent news that industrial production continues its slowdown as well as the news

Economy Watchers Index Falls Again In July

Sentiment among Japanese small businesses fell in July to the lowest level since the last recession as higher food and oil prices discouraged consumers from spending. The Economy Watchers index, a survey of barbers, taxi drivers and others who deal with consumers, dropped to 29.3, the lowest since October 2001, from 29.5 in June. An index of forward looking conditions two to three months ahead

Japan Leading Indicator Drops Again and June Machinery Orders Fall

The Japanese government conceded yesterday that Japan's longest running postwar period of economic expansion might now be over as it reported a drop in its key measure of underlying economic conditions for June. The June coincident indicators index fell a preliminary 1.6 per cent and the government downgraded its assessment of the economy to "deteriorating". This effectively constituted an

Japanese Wages Fall Again In June

Even nominal wages fell in June in Japan, the first time this year that this has happened. Falling nominal wages had been a commonplace with Japan's deflation, but now that we have some form of inflation back, then this is rather more surprising. Monthly wages, including overtime and bonuses, decreased 0.6 percent in June from a year earlier to 463,013 yen ($4,294), according to the latest data

Japan Industrial Output Falls In June

Japan's industrial production fell back in June, the same month as exports declined for the first time in four years. Factory output was down 2 percent from May, when it rose 2.8 percent, according to the latest data from the Trade Ministry.The Trade Ministry also lowered its assessment of industrial production, saying output is weakening after previously describing it as flat with signs of

Japanese Unemployment Rises In June Earnings Fall

Japan's seasonally adjusted unemployment rate rose to its highest level in almost two years in June adding to signs that the economy's longest postwar expansion may now finally be coming to an end. The June jobless rate climbed to 4.1 percent, according to the latest data from Japan's statistics bureau. Thi si the highest rate since September 2006. The ratio of job offers available for each

Japanese Consumer Price Rises Accelerate in June

Japan’s core consumer prices, which include energy and processed food, increased in June at the fastest rate since the Japan's lost decade-and-a-half began in 1992 - at least if we strip out the temporary spike caused by the effect of the consumption tax increase in 1997. The increase however came almost entirely from higher energy costs and food prices. Core prices, which exclude fruit, fish

As Exports Slow, Is Japan Recession Bound?

This is an interesting question, and my immediate response is yes, recession looks almost inevitable in Japan with exports folding the way they are in an economy where domestic consumption is unable to sustain growth.Japan's exports fell year on year for the first time in more than four years in June (although they had been down month on month in both May and April, and ironically they were up in

Not Much News from the East

By Claus Vistesen CopenhagenAs predicted, the Bank of Japan ended its two day policy meeting with a holding operation. In its statement which, it has to be said, is relative brief the BOJ emphasised that significant downside is present with respect to the future course of domestic activity in the form of fixed capital formation and consumption. It was also interesting to note that the BOJ moved

Japan Consumer Confidence Fall To Record Low In June 2008

Japanese consumers became more pessimistic than they have been at any tim in at least 26 years in June as higher energy prices and food costs steadily eroded their spending power. The Japanese Consumer Confidence Index dropped to 32.6 from 33.9 in May, according to data from the Japanese Cabinet Office earlier today. This the lowest reading registered since the government began compiling the

The BOJ to Stand Pat

By Claus Vistesen CopenhagenMonetary policy makers are often difficult to gauge, but looking forward to the BOJ meeting come next week (Monday and Tuesday) one thing seems fairly certain; the BOJ is going to hold off its guns yet again. That was also the conclusion reached by Bloomberg as they conducted a survey of 39 economists who unanimously called it a holding operation.On the face of it the

Japan Exports Slow and Current Account Surplus Drops in May 2008

Japan's current-account surplus narrowed for a third month in May as export growth slowed and record oil prices pushed up the import bill. The surplus shrank 5.9 percent to 2 trillion yen ($18.7 billion) from a year earlier, according to the latest data from the Ministry of Finance. Exports rose 4.2 percent in May from a year earlier, compared with 4.9 percent in April. Imports climbed 4 percent,

Uptick in New Machinery Orders In May

Well, nothing in economics is ever a one way street, and just to prove it orders for Japanese machinery rose at 10 times the pace most economists were expecting in May, as demand increased for equipment used to make semiconductors and steel. Machinery and equipment orders, which give some indication of likely capital spending in the next three to six months, rose 10.4 percent from April when they

The Japan Economy Watchers Index Falls Again In June

by Edward Hugh: BarcelonaThe Economy Watchers index - a survey of barbers, taxi drivers and others who serve the general public directly was down again in June, falling to 29.5 (a six year low)from 32.1 in May, according to data from the Cabinet Office today. The forward looking index for conditions in two to three months time slid to 32.1, its worst reading since September 2001 (down from 35.1.

Japan - Still Fighting off the Recession; When Will the Strength Ebb Out?

By Claus Vistesen CopenhagenJapan is still hanging on it seems, but for how long? This is what I will try to clarify in this entry. In the following I will thus continue my ongoing analysis on two months' worth of data as well as loads of timely analysis from other sources where, as usual, Ken Worsley and Takehiro Sato/Feldman from Morgan Stanley have my complete attention. In accordance with

Japan Wages May 2008 and the June Tankan

Japan's wages grew at the slowest pace in five months in May, suggesting that households will continue to reduce spending as inflation rises faster than workers' paychecks. Monthly wages, including overtime and bonuses, climbed 0.2 percent from a year earlier to 275,815 yen, according to the Japanese Labor Ministry. Due to the impact of inflation this becomes a 1.2% fall in real terms.Households

"Good" and "Bad" Inflation in Japan

Well, one good turn deserves another. Claus and I are currently doing a spell of guest posting on the RGE Europe EconoMonitor at the moment (here, and here, for example), and true "just in time" fashion RGE Analyst Mary Stokes has a piece today about Japan's inflation issue.Inflation is rearing its ugly head around the world, keeping many central bankers awake at night. In Japan, by contrast, it

Japan Consumer Prices, Household Spending and Industrial Output May 2008

Japan's household spending fell in May, job vacancies dropped to a three-year low, the inflation rate almost doubled and the government downgraded its assessment of industrial production despite a report issued today, which showed output rose 2.9 per cent in May from April, the first increase in three months. As might be imagined opinions are now pretty divided about what happens next in Japan,

Japan Machinery Orders, Leading Indicator, Economy Watchers April 2008

Japanese machine orders rose in April after falling for two consecutive months, however Economic and Fiscal Policy Minister Hiroko Ota stressed that demand for machinery still remains weak. Machinery orders, which give an indication of likely capital spending in the coming three to six months, were up by 5.5 percent in April after declining 8.3 percent in March and 12.3 percent in February,

Japan Capital Spending Q1 2008

Japanese businesses investment fell less than previously anticipated during the last quarter according to the latest data from the Ministry of Finance. Capital spending (excluding software) fell 5.3 percent in the three months ended March 31 from a year earlier. While business investment has now fallen in each of the last four quarters, the pace of decline is less than half that recorded during

Japan Wages and Employment April 2008

Average total cash earnings rose in Japan rose in April for the fourth consecutive month as companies added full-time workers to comply with new labor regulations. However the arrival of inflation has meant that in real terms (ie allowing for inflation) contractual wages actually fell year on year. Monthly wages, including overtime and bonuses, were up 0.6 percent from a year earlier to 281,246

Japan's Savings - Going for Yield

The idea of having a large pool of funds to place on the world's asset markets in order to livf off of the derived income seems alluring to most I think. In fact, you could argue that it is precisely this allure and many an economy's pursuit of it that is causing much of the current debacle in the global economy. In Japan's case we are arguing as a part of our ongoing observations that Japan is

Japan Industrial Ouput, Inflation, Household Spending and Employment April 2008

Japan's household spending fell the most in 19 months in April, factory production dropped and unemployment climbed, giving us yet more evidence that Japan's longest postwar expansion may now, slowly but surely, be coming to an end.Industrial OutputJapan's industrial output fell a seasonally adjusted 0.3 percent in April from March as companies cut production due to rising inventories amid

Japan Retail Sales

Japan's retail sales rose at the slowest pace in nine months as higher prices for food and energy seem to have prompted consumers to spend less on clothing and other items. Sales climbed 0.1 percent in April from a year earlier, the Trade Ministry said today in Tokyo.Sales at department stores, supermarkets and convenience stores also declined in April. Sales at the Japan's largest retailers were

Japan Exports April 2008

Japan's year on year rate of export growth rebounded slightly in April as shipments to Asia and emerging markets helped the nation weather problems caused by the U.S. slowdown and a slowing expansion in Western Europe.Exports, the main driver of Japanese growth (accounting for more than half of last quarter's expansion), rose 4 percent from a year earlier after climbing 2.3 percent in March, the

Japan Services Index and BoJ Economic Outlook

Despite the relatively healthy performance turned in by the Japanese economy in Q1 2007, the signs are that the impact of rising food and energy costs and slowing global economic growth (and hence demand for Japanese exports) are now taking their toll. Japan's services sector, for example, bounced back slightly in March as consumers spent more to repair their cars, play golf and go to the theater

Japan Economy Watchers and Consumer Confidence April 2008

Sentiment among Japanese merchants fell for the first time in three months in April as higher prices of daily necessities sapped consumers' spending power. The Economy Watchers index, a survey of barbers, taxi drivers and others who deal with consumers, dropped to 35.5 from 36.9 in March, the Cabinet Office said today in Tokyo. The outlook index of conditions in two to three months fell to 36.1.

Japan GDP Q1 2008

Japan’s economy accelerated slightly in the first three months of 2008, driven by exports to China and other emerging economies, turning in in the process the strongest quarter of export shipments in the last four years. Gross domestic product expanded at a seasonally adjusted annualised pace of 3.3 per cent, up from a revised 2.6 per cent pace in the fourth quarter, the cabinet office said in

Inflation Returns to Japan - Tightroping Between a Slowdown and Recession

In this note, I am going to have a look at the recent slew of economic data for the month of March as well as other relevant information. Last time I did my monthly review of Japan the data had not budged much. This time is different. As per usual my analysis will progress by looking at Japan's economy from five angles which should subsequently yield a full picture of the current important

Japan Employment and Wages March 2008

Japan's wages rose for a third month in March as companies hired full-time workers at the fastest pace in almost 16 years. Total cash earnings, including overtime and bonuses, climbed 1.2 percent from a year earlier, the Labor Ministry said in Tokyo today.In part this increase seems to reflect bonuses and overtime, since if we look at the real wage index this dropped back again at a minus 0.1

Japan Employment and Unemployment March 2008

Seasonally adjusted unemployment dipped to 3.8 per cent in March. While that was better than the flat result of 3.9 per cent in a consensus market forecast, economists focused instead on a fall in the ratio of job offers to job seekers. That slipped to 0.95, meaning 95 jobs were available per 100 applicants.”The trend shows hiring is slowing for the moment especially among small businesses, while

Japanese Household Spending March 2008

Overall household spending fell 1.6 per cent in March from a year earlier in price-adjusted real terms, countering a median market forecast for a 0.5 per cent increase and further signalling weak consumer spending. Such weakness in the domestic economy will likely keep the BOJ concerned about downside risks in coming months.Still, like other central banks, the BOJ faces rising fuel, raw materials

Japan Industrial Output March 2008

The Bank of Japan kept interest rates on hold as expected on today as rather gloomy industrial output, household spending and job figures pointed to weakening growth in the wake of the credit crisis. The weak data, along with a slump in U.S. consumer confidence, pushed up Japanese bond prices, amid worries that American economic woes were hitting the big exporters that are sustaining Japanese

Japan Retail Sales March 2008

Japan's retail sales rose in March as households paid more for gasoline and food, leaving them less to spend on clothing and furniture. Sales climbed 1.1 percent from a year earlier, the Trade Ministry said today in Tokyo.

Japan Consumer Price Inflation March 2008

Well inflations seems to be making all the news at the moment, even in Japan. Japan's consumer prices rose at the fastest pace in a decade in March as companies passed on higher costs of gasoline and food to protect profits. The headline core CPI rate, which includes fast-rising energy prices - but excludes fresh fruit, fish and vegetables - was up 1.2 per cent on-year the statistics bureau

Japanese Exports March 2008

Well Japan's "indian summer" of growth may well be drawing to a close as the slowing rate of increase in world trade gradually takes its toll. Japan's exports rose in March at the slowest pace in almost three years as shipments to Asia - which had been giving some additional impetus - lost momentum while the impact on U.S. exports of the slowdown there continued to bite. Exports, which were

Japan Consumer Confidence March 2008

Well, Japan's consumer confidence ticked back up ever so slightly again in March, but as you can see from the chart, this is really nothing to write home about.Japan's consumer confidence rose from February's five-year low in March after households said they were more optimistic about job prospects. The sentiment index climbed to 36.7 last from 36.1 in February, the Cabinet Office said today in

Japan Machinery Orders February 2008

Japanese machinery orders fell in February after accelerating at the fastest pace in seven years January. Equipment orders, which give an indication of capital spending levels over the next three to six months, declined 12.7 percent from January, when they climbed 19.6 percent, the Cabinet Office said today in Tokyo. Perhaps it is just worth taking a look at the cabinet office charts on the

Japan Economy Watchers Index March 2008

Sentiment among Japanese merchants bounced back slightly to its highest level in four-months in March. The Economy Watchers index, a survey of barbers, taxi drivers and others who deal directly with consumers, rose to 36.9 from 33.6 in February, the Cabinet Office said today in Tokyo. Meanwhile the outlook index of conditions in two to three months fell to 38.2. Basically I think this is

2008 OECD Survey of Japan

Today we learned, if anything, that Japan is indeed balancing on the knife's edge of a recession. With the leading economic index clocking in a score of 50 which is right in the bulls eye between expansion (>50) and contraction (<50). For more on the cyclical assessment I am referring to my most recent write up here as well as the numerous analytical posts Edward has made in the context of

(Un)steady as She Goes in Japan

Last time I had a look at the economic state of play in Japan I asked the rhetorical question of whether Japan was resisting the signs and claims that she is heading towards a recession. Upbeat signs from household spending and a smaller than expected revision of Q4 GDP suggested that this might be the case. In my note however I reiterated my general discourse on Japan in which I have argued

Tankan Index Hits Four Year Low

Just to follow up briefly on yesterday's post, the results of the latest Tankan index of manufacturer sentiment is now out, and it shows that confidence among major Japanese manufacturers fell to its lowest level in more than four years as the plunging dollar in this quarter. The closely watched quarterly central bank "tankan" survey, released this morning, showed a fallll to 11, eight points

Japan Industrial Output February 2008, Updated

Japan's manufacturers cut production for the second consecutive month in February, and output fell month on month by 1.2 percent from January, when it also dropped by 2.2 percent, the Trade Ministry said today in Tokyo. The seasonally adjusted index is now, as can be seen in the chart, at its lowest level since last July when Japan was suffering from earthquake issues. This means that Japanese

Japan Inflation and Unemployment February 2008

Japan's consumer prices rose again in February, according to the general index, while the unemployment rate increased for the first time in five months, reinforcing concerns that the economy maybe heading into a recession. Core prices, which exclude fruit, fish and vegetables, climbed 1 percent in February from a year earlier, the statistics bureau said today in Tokyo. Core prices started rising

Japan Exports February 2008

Japan's export growth resumed its upward march in February as demand from emerging markets, and especially in Asia, continued to surge strongly. Exports, which accounted for over half of the Japanese economy's growth last quarter, climbed 8.7 percent from a year earlier after increasing 7.6 percent in January, according to the latest data from the Finance Ministry in Tokyo today. If we look at

Ms Watanabe Not Easily Deterred

As Bloomberg puts it on their news site sometimes markets roar and sometimes they whisper. In the last couple of weeks they have certainly roared as the crisis in financial markets have haunted the steps of Wall Street bankers and the Fed. At this point in time we are wearily waiting in Europe to see whether (or more precisely when and where) the fangs of the credit crunch will take hold. In the

The BOJ Debacle, better than Shakespeare

As most of our readers without a doubt have discovered most of the action is taking place in the US at the moment as the credit turmoil has moved from sporadid skirmishes to a full blown bataille. However, the US is not the only place where the sh't is waiting to hit the fan although of course you might say that the fan is already blowing at full force in the US. The issues facing Japan at this

Japan Consumer Confidence February 2008

Japan's consumer confidence dropped to its lowest level in five years in February. The Index fell to 36.1 in February, down from 37.5 in January, the Cabinet Office said today in Tokyo this morning. Confidence among consumers hasn't been this low since March 2003, when the unemployment rate was close to a postwar high.

Japan Q4 2007 GDP Revisions

Following today's release of revised figures for Japan GDP in Q4 2007 we can now see that Japan's economy grew better than anticpated (incuding by those on this blog) in the fourth quarter as exports held up much better than expected. Gross domestic product expanded an annualized rate of 3.5 percent in the three months ended Dec. 31, which was down only slightly on last month's preliminary

Deciphering the USD/JPY - A Credit Turmoil Story?

In a time where the USD continues its roller coaster ride and where analysts and other market sages are effectively predicting the USD/JPY to break 100 anytime soon I think it might be a good idea to have a more reflective look at what is happening to the JPY (the USD/JPY in this case). Of course, exchange rates, like the lord, move in mysterious ways and most empirical studies have grappled with

Japan Economy Watchers Index February 2008

Japanese merchant sentiment improved slightly in February but was still near a six-year low as soaring oil and food prices continued to sap consumers' spending power. The Economy Watchers index, a survey of barbers, taxi drivers and others who deal with consumers, rose to 33.6 from 31.8 in January, the Cabinet Office said today in Tokyo.

Japan Machinery Orders January 2008

Japanese machinery orders rose at the fastest pace in seven years in January, a sign that demand from emerging markets may offer some kind of support for Japan's export driven economy during difficult times. Equipment orders jumped 19.6 percent from December, when they dropped 3.2 percent, the Cabinet Office said today in Tokyo. Machinery orders,which give some indication of capital spending

Is Japan Resisting?

(Cross-post from Alpha.Sources)There is only one thing which you can be certain of these days. Trying to keep up with the pace of record breaking and nail biting pieces of data pouring in at the moment carries with it a distinct risk of suffering a heart attack. You shouldn't worry too much about the author of this space though but I am merely pointing towards the fact that 'keeping up' these

Japan Leading Index January 2008

Japan's leading index fell to 30 percent in January, below the threshold of 50 that signals growth will slow in the next three to six months, according to the Cabinet Office yesterday. The December number was revised to 50 from 45.5.With consumer confidence at a four-year low it seems unlikely that household spending will continue to sustain the Japanese economy in the face of slowing export

Japan Capital Spending and Q4 2007 GDP Revision

This is just a brief note on the news from the Japanese Ministry of Finance this morning that capital spending excluding software declined 7.3 percent year on year in the three months ended Dec. 31. This was the fastest decline in capital spending to be registered in the last five years, and almost certainly means that the Japanese government will use the data to substantially revise down its

Japan Housing Starts January 2008

Japan's housing construction sector crisis does seem to be flattening out, and new starts fell at the slowest pace in seven months in January. Ground broken on new homes and condominiums was still down - 5.7 percent from a year earlier - but this following a much stronger rate of decline - 19.2 percent - in December, and if we look at the chart - which is based on data from the Japanese Land

Japan Inflation and Retail Sales January 2008

Japan's consumer prices as measured by the General Index (ie including food and energy costs) rose for a fourth consecutive month in January at a year on year rate of 0.7%, maintaining the fastest pace achieved in more than nine years, as companies passed the higher costs of oil, wheat and soybeans onto consumers. Core consumer prices (ie stripping some foodstuffs) climbed 0.8 percent from a

Japan Unemployment January 2008

Japan's unemployment rate was unchanged (since last November) at 3.8 percent in January. The male jobless rate rose to 3.9 percent last month from 3.8 percent in December, while the female unemployment rate was unchanged at 3.7 percent, the Ministry of Internal Affairs and Communications said. The unemployment rate fell to a low of 3.6 percent last July, and this was the lowest level since

Japan Industrial Output January 2008

Japan's factory output fell in January at a much faster rate than most economists were expecting. Output was down 2 percent from December, when it rose 1.4 percent, the Trade Ministry said today in Tokyo.The report also showed that companies plan to cut production further in February, with manufacturers antipitaing that output will slide 2.9 percent from January, before rebounding by 2.8% in

Japan Trade Statistics January 2008

Bloomberg have a pretty misleading article today on the latest set of trade figures published by the Japanese finance ministry (let's say even more misleading than I have unfortunately become rather accustomed to in the Japanese context). Basically the Bloomberg story is:Japan's export growth unexpectedly quickened in January, as rising demand for cars and steel from China and Russia made up for

Toshihiko Fukui's Term At The BoJ

Toshihiko Fukui will retire as governor, after five years at the helm of the Bank of Japan, on the 19th March. His successor may well be announced this week. This morning in the Financial Times David Pilling has a long, and very "fair and balanced" asseessment of Fukui's time at the BoJ, which is more than worthwhile reading for those of you who would like to understand the workings of this

Q&A on Japan

In the context of Francois Guillaume's pertinent comments and questions to my review and preview note and in the light of today's much surprising Q4 GDP release I have chosen to present my comments and answers to Francois' questions/comments above the fold à la Q&A.---1) GDP much higher than expected...how do you explain that ?? I want to focus on two issues here. First of all, the current

Japan Q4 2007 GDP Preliminary Estimate

Well the preliminary Q4 GDP numbers are now out and they are definitely better than expected. Japan's economy grew at an annualised rate of 3.7 percent in the last quarter of 2007, and this was at least double the pace most economists were expecting, as strong business investment and exports to Asia and Europe helped the Japanese economy weather the U.S. slowdown. Gross domestic product in the

Review and Preview on Japan

(Cross-post from Alpha.Sources)I realize that I am moving in a bit late with this but the data I use to input in my analysis only recently came out for December 2007. More generally, this post is going to be quite big since I have a lot of things I want to get off my chest this time around. I have two main areas of focus I want to cover.Firstly I want to finalise my analysis of Japan in 2007 with

Japan Consumer Confidence January 2008

Since Claus has just written a substantial analysis, this is just a brief note to keep the data up to date. The news, hardly unexpectedly, isn't good, since Japan's consumer confidence dropped in January to its lowest level in more than four years as rising prices and falling wages continued to squeeze households. The Consumer Confidence Index fell to 37.5 last month from 38 in December,

Japan Economy Watchers Index January 2008

Japanese merchant sentiment fell to a six-year low in January as stagnant wages and rising oil and food prices forced consumers to cut back on spending. The Economy Watchers index, a survey of barbers, shopkeepers and others who deal directly with consumers, fell to 31.8 in January from 36.6 in December. This is the biggest monthly drop ever the Cabinet Office said today in Tokyo. The index is

Japan Machinery Orders December 2007

Japan's machinery orders fell for the second consecutive month in December as manufacturers scaled back investment in anticipation of slowing global economic growth. Machinery orders which provide us with a useful indicator of business spending for the coming three to six months, dropped by 6.8% in December from November (on a seasonally adjusted basis) the Cabinet Office said today in Tokyo.

Japan Index of Leading Indicators December 2007

Japan's leading index, which is the government's broadest indicator of the economic outlook today signaled slowing economic growth for a fifth consecutive month. The leading index was at 40 percent in December, below the threshold of 50 that signals growth will slow in the next three to six months, the Cabinet Office said today. Nonetheless the reading is up on November's 10, and if you look at

Japan Wages and Housing Starts December 2007

Well the storm clouds really seem to be gathering over Japan at the moment, and as I commented to Claus this morning, it seems that Japan could now enter quite a protracted recession. No one is expecting this I feel.Bloomberg quote the official BoJ view from central bank policy maker Kiyohiko Nishimura that the cycle of profits feeding into wages and spending by Japan's consumers remains intact

Japan Unemployment December 2007

Japan's job vacancies fell to a two- year low and the jobless rate was unchanged, adding to evidence that consumer spending may slow. The jobless rate remained at 3.8percent in December, the statistics bureau said today in Tokyo. The number of positions available for each applicant slipped to 0.98.Job seekers outnumbered positions available last month for a second consecutive month, with the

Japan CPI December 2007

According to the Japanese Statistics Office this morning consumer prices in Japan rose in December at an annual rate of 0.8 per cent according the so called "general index", double November’s pace, as higher oil prices pushed up the index up another time. As David Pilling in the Financial Times:The faster-than-expected inflation rate is causing a dilemma for the Bank of Japan, which is coming

Japan Exports and Trade Surplus December 2007

Japan's export growth slowed for the second consecutive month in December as a decline in U.S. demand reduced sales of items like cars and electronics in what is still the country's largest overseas market. Exports, which were the key factor responsible for almost all of Japan's third-quarter GDP growth, rose 6.9 percent from a year earlier, after climbing 9.7 percent in November, according to

Japan Consumer Confidence Index December 2007

Japan's consumer confidence dropped to its lowest level in more than four years in December as a combination of falling wages and rising prices continued to squeeze households. The sentiment index slid to 38 last month from 39.8 in November, the Cabinet Office said today in Tokyo. There isn't that much more to say about this at the present time, since it is unfortunately now all too predicatble.

Japan Machinery Orders Fall in November 2007

Japan's machinery orders fell last November as companies seem to have cut back on spending in anticipation the U.S. slowdown will spread to Europe and Asia and hurt Japanese exports. Orders fell 2.8 percent from October, a month in which they rose 12.7 percent, the Cabinet Office said in Tokyo today. The Topix stock index also fell 3.5 percent today, following an unexpected drop in U.S. retail

Economy Watchers Index December 2007

This post is more to keep the data set up to date than to register any real sense of surprise about the fact that Japanese merchant sentiment fell to a five-year low in Decemebr, as stagnant wages and record petrol prices left consumers with less cash to spend at restaurants and shops. Unfortunately, as I said yesterday, this is now becoming - at least in the short term - all too predictable.

Japan Leading Indicator November 2007

Japan's broadest indicator of future economic activity was down again this month, the fourth cosnecutive weak showing, suggesting that the what has been the longest expansion in more than 60 years may well now be coming to an end. The leading index was at 10.0 percent in November, the Cabinet Office said today in Tokyo. A reading of below 50 signals slower growth in the next three to six months

Talking Japan

I am sure most of our readers are already familiar with the other big Japan watching site out there run by Ken Worsley and its timely analysis of the economic and political situation in Japan. Now Ken, alongside co-host Albrecht Stahmer, has also decided (the podcast has been running since March 2007 actually) to bring the Japan economic/business news and commentary to the podcasting media over