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FX & Equities: Japanese Inflation Slows; NZ Firms Less Optimistic

Posted by Akhilesh Ganti on Jul 24, 2014 10:45:00 PM

Japan's CPI figures came out pretty much in-line with estimates but those expectations had factored in a deceleration in the rate of inflation, an ominous outcome for a nation that is desperately trying to end decades of deflation. This further highlights the difficult task that the BOJ faces as they try to achieve their inflation target. While BOJ Governor Kuroda has conceded that inflation will ease near term before resuming its ascent and appears confident that the goal will be met, the slowdown in consumption and falling income growth paints a much more alarming picture.

New Zealand's ANZ Business Confidence numbers fell to 39.7, markedly lower than last period's reading of 42.8, as the percentage of companies with an optimistic outlook of the economy declined. This is another data point that suggests that the RBNZ will likely be in holding pattern with respect to near-term monetary policy initiatives.  

Ranges:{WWM's New ALPHA Trader - DAILY charts [EUR, GBP, AUD, YEN, GOLD, OIL, DXY]}(click to enlarge)

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Economic Data - {Source: Bloomberg}

Country Event Period Survey Actual Prior Revision
Japan Natl CPI YoY Jun 3.50% 3.60% 3.70% --
  Natl CPI Ex Fresh Food YoY Jun 3.30% 3.30% 3.40% --
  Natl CPI Ex Food, Energy YoY Jun 2.30% 2.30% 2.20% --
  Tokyo CPI YoY Jul 2.80% 2.80% 3.00% --
  Tokyo CPI Ex-Fresh Food YoY Jul 2.70% 2.80% 2.80% --
  Tokyo CPI Ex Food, Energy YoY Jul 2.00% 2.10% 2.00% --
  PPI Services YoY Jun 3.60% 3.60% 3.60% --
  Japan Buying Foreign Bonds 18-Jul -- ¥116.1B ¥671.5B ¥681.6B
  Japan Buying Foreign Stocks 18-Jul -- ¥163.0B ¥71.9B --
  Foreign Buying Japan Stocks 18-Jul -- ¥139.2B -¥160.9B -¥160.6B
  Foreign Buying Japan Bonds 18-Jul -- ¥450.3B -¥2.9B ¥1.0B
New Zealand ANZ Activity Outlook Jul -- 45.1 45.8 --
  ANZ Business Confidence Jul -- 39.7 42.8 --

Equities:{WWM's New ALPHA Trader - DAILY charts [Dow30, SP500, Nasdaq100, Nikkei225, China, HKG40, Nifty50, ASX200]}(click to enlarge)

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