Japan
Wood Products Prices
Dollar Exchange Rates of 25th
January
2019
Japan Yen 109.5
Reports From Japan
Economy expanding but consumer spending
flat
Recent reports from the Cabinet Office have been
interpreted as showing the economic recovery has now
extended to over 6 years however, analysts have pointed
out that, while economic data tends to support this,
Japanese consumers say they do not feel any
improvement.
Although there have been modest wage increase over the
past years, consumer spending power has been eaten away
by a host of tax and social security contribution increases
such that consumers now have less to spend.
In its January Monthly Economic Report the Cabinet
Office kept its assessment that the economy is "recovering
at a moderate pace."
Strong exports on the back of the weak yen and business
investment have been the main drivers of growth but
recently the government lowered its forecast for export
growth due to the worsening trade dispute war between the
US and China. The Cabinet Office, report says exports
have weakened recently.
See:
https://www5.cao.go.jp/keizai1/mitoshi/2019/h310128mitoshie.
pdf
Bank of Japan lowers inflation forecast
In its most recent Economic Outlook Report the Bank of
Japan has lowered its inflation forecast for the next fiscal
year which begins in April 2019. The BoJ has shaved its
forecast to 0.9% from 1.4%.
The BoJ also said it will maintain its current monetary
which, along with the reduced inflation forecast,
underscores the difficulties faced in achieving a 2% annual
inflation. The latest inflation downgrade is the fourth
consecutive reduction.
The BoJ Quarterly Report can be found at:
https://www.boj.or.jp/en/mopo/outlook/gor1901a.pdf
Lowest consumer confidence since mid-2016
Japan's Consumer Confidence Index dropped for a fourth
consecutive month in January. While not a major
economic indicator, the movement of the index compiled
by the Cabinet Office, underlines concerns that consumers
are growing less optimistic about economic prospects.
The Consumer Confidence Index for January 2019 was
41.9, a level not seen since mid-2016. Prospects in all of
the four components assessed in the Cabinet Office
survey; overall livelihood, income growth, employment
and willingness to buy durable goods were reported as
negative.
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