Tags: AS | Japan | Economy

Japan Gloomy Data Reinforce Expectations for More BOJ Easing

Wednesday, 27 April 2016 09:36 PM

TOKYO (AP) — Japan's factory output rose in March while core inflation and consumer spending fell, underscoring a lack of confidence among households whose buying power remains the key to sustained growth.

The date released Thursday raised expectations that the Bank of Japan may tweak its already lavish monetary stimulus to better support the recovery in the world's third-largest economy.

BOJ Gov. Haruhiko Kuroda has said he will do whatever it takes to attain an inflation rate of about 2 percent, which the government's planners say is crucial for spurring growth.

Kuroda has made it his mission to vanquish deflation, which tends to discourage companies from investing in new plants and equipment and hiring more workers. But in March, Japan was teetering back toward deflation, with core inflation excluding volatile food prices at minus 0.3 percent.

The recent relapse in crude oil prices has been a major obstacle for the BOJ: the price index excluding energy prices rose 0.7 percent on an annual basis.

"We would not go so far as to say that the BOJ is 'boxed in' to deliver an easing; but it is fair to conclude that the expectations bar for easing has been hoisted rather high," Mizuho Bank economists said in a commentary.

Industrial output rose 3.6 percent in March from a year earlier, better than most forecasts, as manufacturers ramped up production of transport and metal working machinery and office equipment.

But consumer spending contracted by 5.3 percent.

Japan's jobless rate shrank to 3.2 percent in March from 3.3 percent the month before, while household incomes edged up 0.3 percent from a year earlier.

Raising wages is key to enticing consumers to spend more, but despite the tight job market, so far most increases have gone to low paid part-time workers whose budgets are already stretched tight.

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Japan's factory output rose in March while core inflation and consumer spending fell, underscoring a lack of confidence among households whose buying power remains the key to sustained growth.The date released Thursday raised expectations that the Bank of Japan may tweak...
AS,Japan,Economy
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2016-36-27
Wednesday, 27 April 2016 09:36 PM
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