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Consumer inflation rises slower than expected in August

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Shouldn't that be "more slowly"?

-3 ( +0 / -3 )

However, there are fears it will derail economic recovery by taking a bite out of consumer spending.

Pffft! They did that already, hence the low growth in inflation. If Abe was to put his boot where his mouth is and get the corporations to pass on their tax cuts as salary and/or bonus increases there might be some increase in spending. Increasing sales tax without increasing salaries and expecting spending to increase is just ludicrous!

1 ( +3 / -2 )

The recent yen weakness (or perhaps more accurately dollar strength) seen over the past month or so should add to inflationary pressures once again.

Disillusioned,

If Abe was to put his boot where his mouth is and get the corporations to pass on their tax cuts as salary and/or bonus increases there might be some increase in spending.

Wouldn't he have to nationalize the corporations to do that?

His only feasible option to boost wages is to enact policies to increase the demand for labour. That 3rd arrow stuff he keeps talking about. (Oh and beg companies to raise wages, but he's already done that.)

Increasing sales tax without increasing salaries and expecting spending to increase is just ludicrous!

Would make sense if that were the case, but the sales tax didn't increase in isolation.

Recent figures showed Japanese household wealth increased to record levels - that should have some kind of positive effect on consumer sentiment.

3 ( +3 / -0 )

Yup the Strong Dollar will help with inflation, and also help with exports, so export related business' their suppliers and related service industries all get some spin off, from trucking companies right through.

Strong Dollar is good.

The pessimists will always find some fault though regardless.

-4 ( +1 / -5 )

Japanese household wealth is artificial like this inflation. Demography is making pay its toll to Japan slowly. Japan is losing its labor slave workers and without 3rd arrow, no change. Artificial inflation, real deflation. The fact to cut in 2 parts VAT increase is to make think there would have been continuous inflation over time to people, politician trick. Prices are reducing only because of loss of spending power with time.

0 ( +2 / -2 )

The rich get richer and the poor get poorer. This is Abenomics at it's core.

Recent figures showed Japanese household wealth increased to record levels - that should have some kind of positive effect on consumer sentiment.

Don't be fooled by this, it just means that there is more CASH hidden under mattresses and between the walls. Japanese consumers historically do not use any extra income when prices rise.

0 ( +1 / -1 )

"Consumer inflation rises slower than expected in August" giving Japanese more purchasing power than expected. Additional printing of money is needed to devalue their savings and income, and to create inflation reducing their purchasing power.

-3 ( +2 / -5 )

You can't have strong export numbers, a weak currency AND inflation. Gotta pick your poison, and in Japan's case, they should have let the yen get stronger a long time ago. We all know the current rate is artificial.

0 ( +2 / -2 )

Abegnomics -- especially for the small minded

-2 ( +1 / -3 )

Is 3.1% up real? I feel if food were included this igure it would be a lot higher, even with fluctuation.

3 ( +3 / -0 )

“The Japanese economy would go back to a deflationary state by the second half of fiscal 2015” if the central bank, out of caution against further weakening of the yen, decided against putting yet more money into the markets, he said in a note.

Rock meet hardplace. You need to dump more money into the economy to create inflation, but that will weaken the yen further and increase the costs of imports, especially food and energy. Not a pretty picture.

-2 ( +2 / -4 )

@fxgai,

Recent figures showed Japanese household wealth increased to record levels - that should have some kind of positive effect on consumer sentiment.

How did they measure this ? Did they cherry pick households that are invested in the Japanese stock market ? More reason for BoJ to keep printing moneys to buy up nikkei 400 ETFs. Or, did they cherry pick households that purchased a house before tax raise ? When you purchase a house, the house IS included in the calculation of your wealth right ? Seems rigged for sake of "good" figures.

-1 ( +1 / -2 )

||The nations core consumer inflation, stripping out volatile fresh food prices, was 3.1 percent year-on-year, the internal affairs ministry said || Excluding the impact of the tax increase, the rise in core consumer prices was 1.1 percent, Dow Jones Newswires said, quoting a formula by the Bank of Japan (BOJ).||

Nonsense. Stripping out volatile fresh food prices makes these inflation figures virtually meaningless in tracking consumer economic conditions. (To be fair, the same game is also played by both the U.S. and U.K. governments). Food prices matter above everything else when it comes to managing most family budgets. Claiming that they are too volatile to be fit into an index is just plain baloney. Japanese family consumers and the pension budgeting seniors are in grocery store shock at the moment. Costs to fill the classic dento teki nabe have more than doubled from what they were just 10 years ago. That means national food price inflation is running above 7% per annum and has been for some time. That rate is very likely to trend even higher once the TPP mirage fades; the general sales tax bumps to 10%; and the yen slides down to 120 versus the dollar. Kuroda and Abe are trapped in their Keynesian delusions of using quantitative easing to spend the country back into a self perpetuating virtuous cycle. Creating the more healthy demand pull inflation is just not in the cards without some radical structural and fiscal policy reorganization measures. Meanwhile, waiting on good times to make tough choices is only political denial.

2 ( +2 / -0 )

Selling all Nikkei 400 ETF's as we speak.........if the BoJ is buying them up and propping up the stock prices of hollowed out money losing companies, what happens when the crap hits the fan and they bail? Disaster.

0 ( +1 / -1 )

horizon360Sep. 27, 2014 - 12:27AM JST Japanese family consumers and the pension budgeting seniors are in grocery store shock at the moment.

Problem is the weak yen. Mainly because 60 percent of the food is imported from another country. Also, utilities cost have gone up 9 percent in the last 12 months. Why? because 99 percent of the oil and LNG is imported and paid by the weak yen.

1 ( +1 / -0 )

"Selling all Nikkei 400 ETF's as we speak."

If Abe decides not to raise the consumption tax, that could be a bad idea.

-1 ( +0 / -1 )

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