Japan has just released a whole lot of of economic data and, with the exception of CPI, it’s come in below expectations.
Starting with the good news first, core CPI, the preferred measure of price pressures used by the Bank of Japan, rose by 0.1% in the year to June. The figure, unchanged from May, was above expectations for no growth overall.
While the national inflation figure topped expectations, deflationary pressures returned to Tokyo in July with CPI declining 0.1% from a year earlier. The reading, a lead indicator for national price movements in the month ahead, indicates that disinflationary pressures are building, rather than subsiding at present.
While it has little relevance for monetary policy, headline CPI increased by 0.4% from a year earlier, fractionally below the 0.5% level of May.
Aside from the core CPI figure, the news elsewhere wasn’t good.
Household spending, having jumped by 4.3% in the year to May, slumped in June. Spending fell by 2.0%, well below expectations for an increase of 1.7%.
Elsewhere the unemployment rate ticked up to 3.4% in June, above the 3.3% level of May. Markets had been expecting no change overall.
Having trended higher in recent months, the national jobs-to-applicants ratio, essentially the number of available jobs to the number of active job seekers, held steady at 1.19, below the 1.20 level expected.
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