JAPAN: Here’s everything you need to know about today’s massive data dump


Japan has released a swathe of economic data this morning — most of it weak — which will do nothing to dispel speculation that the Bank of Japan (BOJ) will announce additional monetary policy easing measures later in the session.

Outside of industrial output and labour market data, the data was underwhelming, continuing the trend seen in recent months.

Household spending rose by 0.5% in March, beating expectations for a decline of 0.3%, although, thanks to revisions to prior data, the year-on-year rate tumbled to -5.3%, the lowest level seen since March 2015.


The news was little better on retail sales with a contraction of 1.1% recorded. Although an improvement on the 1.5% decline expected, sales have now fallen in four of the past five months.


On inflation — a key component when it comes to the outlook for monetary policy — the news was not good, with the national core inflation rate — that which excludes fresh food — contracting 0.3% in the year to March. Not only was this below forecasts for a smaller decline of 0.2%, it marked the fastest annual contraction since April 2013.


The so-called core-core inflation rate — similar to core readings used in other countries given it excludes both food and energy prices — rose by 0.7% over the same time period, down from 0.8% in February.

In overall terms, headline inflation fell by 0.1% having increased by 0.3% in the 12 months to February.

While the news on households and inflation wasn’t great, there were signs that labour market conditions continued to strengthen.

The national unemployment rate fell to 3.2% in March, below the unchanged reading of 3.3% expected. The chart below reveals the downward trend in the rate seen since 2011.


Adding to signs that labour market conditions are tightening, the national jobs-to-applicants ratio — simply a measure of available jobs to job seekers — rose to 1.3.

That means that for every 100 persons who are looking for work, there are now 130 positions available — labour market conditions that will only help to spur on wage inflation should it persist.


The final piece of the data piece was also pleasing, with preliminary industrial output rising 3.6% in March following an ugly 6.2% contraction in February that was blamed partly on temporary factory closures. The figure beat forecasts for a smaller gain of 2.9%.

Looking further ahead, firms indicated that they expect output to increase by a further 2.6% in April before retracing 2.3% in May.


The enormous data dump comes at an opportune time for the BOJ who are currently meeting to discuss monetary policy, with its decision due out later this afternoon.

In a research note released early Thursday, Ray Attrill, global co-head of FX strategy at the NAB, suggested that the BOJ will likely announce an increase in the target for its QQE asset purchase program from the current level of ¥80 trillion per annum to as much as ¥100 trillion.

He also suggests that bank will cut its deposit rate to -0.2% from -0.1% in conjunction with a scheme that will effectively allow Japanese banks to get paid to borrow from the BoJ.

The BOJ decision is likely to arrive shortly after 1pm AEST.