Out in Japan yesterday afternoon - Tertiary Activity Index for May
-0.1% m/m
- expected -0.5% m/m , prior +1.4%, revised from +1.2%
I posted in the heads-up to this a fall was expected:
- partially a 'give back' from the big upmove the previous month. Despite the fall in the data expected today tertiary sector activity is still likely to be good positive growth for Q2 as a whole.
And that is pretty much what we got. Slightly weaker on the m/m. But a beat on expectations, which were much lower. The revision for April shows it as the biggest one-month increase in any single month since March 2014, which was pre-tax hike. On a three-month basis, the index was +0.5% q/q (biggest in more than a year). Mike posted a graph of this index, here
Earlier in the session yesterday we got PPI:
- Unchanged on the month (post is here for the data). As I said in the heads up for this data: energy prices dripping lower to weigh on this month's result
- And that's what we got - import prices in yen for petroleum fell. And, final goods inflation is still very low, consumer goods PPI still very low ... which all adds up to pressure on the CPI remaining very limited indeed.
As long as the Bank of Japan retains their 2% inflation target there will be no let up in accommodative monetary policy from them, this is a negative factor for the yen. there is some talk of 'tapering' from the BOJ, and indeed their pace of JGB buying has slackened, the change to YCC has taken some of their JGB buying needs down a touch.
