Abenomics Leads To Worst Core Deflation In Three Years
Six months in and a 30% devaluation in the JPY and it would appear Abenomics is not having quite the desired effect. With an oh-so-exciting 2% inflation target that we are sure will be appearing any second now, Nationwide CPI just printed -0.9% YoY - its worst (most deflationary) levels since April 2010, missing expectations by the most in 10 months! But wasn't Abenomics supposed to be... inflationary? Well it is in one place - Utilities costs are the only sub-index higher YoY (by 2.3%) - that's a good thing, right? Given that the only reason Abenomics will work is the propagandized concerns of inflation (as we noted here), this could be a problem for Kuroda (perhaps triple the monetary base will do it).
The market's immediate reaction: gold is pushing higher, breaking above
$1473, as this means moar, moar, MOAR balance sheet doubling by the
Gold has now retraced Fib 61.8% of its record plunge...