Weak data from industry and retail put once again the Bank of Japan in knockdown, pushing the central bankers to take additional measures to stimulate economy. The industrial production in Japan has remained unchanged in September from the previous month, disappointing the analysts and economists, who expected an increase of 1.0%, after the increase of the index by 1.5% in August.
The surprising stagnation in industrial production can be an important topic during the two-day meeting of BoJ starting today. The data may be evidence of how difficult it is to be encouraged the economy. After two weeks the authorities will provide data on the growth of gross domestic product for the third quarter of 2016, which might also disappoint the market participants.
One of the biggest problems for Japan in recent months is the strong JPY. Despite the efforts of the central bank to devalue JPY, the local currency has increased in value against the USD by 15% since the beginning of the year. This puts pressure on Japan over the important export industry, and thus over readiness for investment companies.
Meanwhile, today were presented report on consumer spending, which were better than expected. For example, basic household costs in Japan, a major benchmark for the contribution of private consumption to economic output, increased seriously in September. For the entire third quarter, however, there is retreat of about 1.1% from the previous quarter. This weakness is contrary to the growth of real wages and rising consumer confidence and obviously reflects unfavorable weather conditions during the summer months.
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