Japan: Full slate of economic reports this week - BBH

Analysts at BBH suggests that Japan has a full slate of economic reports this week but the consensus view is unlikely to change.  

Key Quotes

“Japanese growth may be improving, but it is not firing on all cylinders.  Industrial production, exports, and government spending are largely offsetting the drag of consumption and domestic demand.  A small increase in Q4 capex appears to be mostly in the export sector, and industrial output is accelerating.  The median expectation is that capex rose 0.6% in the last three months of 2016, recouping less than half the decline in Q3.”  

“Household consumption in January is not expected to improve from the 0.3% year-over-year contraction reported in December.  The poor consumption is not a function of the high level of unemployment as is the case in parts of Europe.  The Japanese unemployment rate is expected to slip to 3.0% in January, matching the cyclical low, from 3.1% at the end of last year.”

“Also, Japan is the last of the large high income countries that continue to wrestle with deflation.  The core measure, which excludes fresh food finished 2016 at minus 0.2% year-over-year.  It is expected to be at zero in January when it is reported at the end of next week.  The core measure more comparable to the US measure, which excludes food and energy fell to 0.1% in December, the lowest year-over-year pace in three years.  The recent peak was 1.3% at the end of 2015.  It may have risen to 0.2% in January.”