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Japanese Inflation Holds Near 23 Year Highs As Food, Energy, & TV Costs Soar

Tyler Durden's picture




 

Japanese CPI printed 3.6% in June, modestly down from May's 3.7% YoY, but hotter than the expected 3.5% YoY analysts predicted. If you don't eat food or use energy then inflation merely bit 2.3% of your income this year but if you did then you may have noticed that energy costs are 9.1% higher YoY, TVs +8.0%, and Food +4.1% (both showing no signs of making Japan's Misery Index any less, well, miserable). PPI also printed at 3.6% (23 year highs). So when the Japanese politicians say "Abenomics is well on its way to achieving its goals..." they must mean 'of lowering living standards for all Japanese people'.

 

 

Charts: Bloomberg

 

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Thu, 07/24/2014 - 19:47 | 5001441 Spungo
Spungo's picture

Super bullish for stocks. Why buy JGBs at no interest when you could buy anything and get a better return. Also means inflation spiral as people dump bonds.

Thu, 07/24/2014 - 20:21 | 5001584 WhackoWarner
WhackoWarner's picture

When I saw the title to this saying cost of TV was up up and away.  I missed the point.  Cost of a device called a TV is up.  But what about trying to explain how an industry that used to be free to anyone who plunked an aerial on their home has no evolved to this mega expensive monthy fee

Used to be that all the major networks were free to the viewer/household and supported by advertising revenue. Now we pay for every piece of nonsense and still have no way of cutting out the commercials.

 

Thu, 07/24/2014 - 21:15 | 5001775 aVileRat
aVileRat's picture

Yeah. +1 on this insight

Content creation margins are falling hard in Japan in line with the collapse in consumer purchasing power. Unit costs are up, but that is not flowing into guys like Sony or Nintendo/LG.

The plug in the Abenomics is nominal inflation must somewhere lead to impoved consumption and welfare impovement. Sofar ? Not so much. Until Abe figures that piece out, he is looking at a redux of his first term.

At this point, Japan will end up where it was in 1993, only with a negative surplus and zero savings. This is the same problems which led to the first imperial revolts in the 19th c.

 

Thu, 07/24/2014 - 22:06 | 5001949 strannick
strannick's picture

I'm sure Abe will let rates rise as he stops the money printing, for the good of the nation, despite its political unpopularity. Course then he cant buy Treasuries, but America will understand, since we are their friends.

Thu, 07/24/2014 - 19:52 | 5001452 darteaus
darteaus's picture

Print money for 25 years and prices go up.

Who knew...

Thu, 07/24/2014 - 19:53 | 5001462 kaiserhoff
kaiserhoff's picture

Well, you import most of that stuff, and you just trashed your currency.

Whocouldaknowed?

Thu, 07/24/2014 - 20:19 | 5001575 buzzsaw99
buzzsaw99's picture

they trashed their currency by levering up and buying foreign assets. somehow i don't think they are pissing and moaning too much. the only division in the boj is between the uber doves and the ultra uber doves. the ultra uber doves want to call on the gubbermint for moar spending on top of everything else. do not look for fiscal restraint from japan ever.

Thu, 07/24/2014 - 19:58 | 5001479 monopoly
monopoly's picture

Will it ever end. Taking so long. 

Thu, 07/24/2014 - 20:06 | 5001513 NOTaREALmerican
NOTaREALmerican's picture

Assuming you mean by "it" the bullshit, then no, it will never end.  Human consciousness swims in a sea of bullshit.  

Thu, 07/24/2014 - 20:17 | 5001569 Elvis the Pelvis
Elvis the Pelvis's picture

Things are tough all over.  I'm just glad I wasn't born in Djibouti.  Bitchez.

Sat, 07/26/2014 - 00:47 | 5006471 syntaxterror
syntaxterror's picture

Go to Detroit then. Enjoy.

Thu, 07/24/2014 - 20:02 | 5001495 Fuku Ben
Fuku Ben's picture

Inflation & Radiation, it's whats for dinner...

Thu, 07/24/2014 - 20:06 | 5001515 Not Too Important
Not Too Important's picture

And for dessert, Hyperinflation and Hyperradiation!

Both requiring extra-absorbant Depends . . .

Thu, 07/24/2014 - 22:32 | 5002035 yogibear
yogibear's picture

Japan sees hyperinflation and then the US sees it sometime afterwards. Japan is the US Federal Reserve experiment.

At least we get to see how we'll end up.

Thu, 07/24/2014 - 20:05 | 5001509 NOTaREALmerican
NOTaREALmerican's picture

Well,  assuming Krugman is right - and with a beard like that, how could he NOT be - Japan's economy should soon be booming.

Thu, 07/24/2014 - 20:09 | 5001523 Navymugsy
Navymugsy's picture

Buh, buh, buh, Prime Minisiter Abe, right? I mean like Abenomics, right? RIGHT?

 

-Paul Krugman

Thu, 07/24/2014 - 20:13 | 5001539 1stepcloser
1stepcloser's picture

Raise rates, I dare ya!

Thu, 07/24/2014 - 20:15 | 5001554 buzzsaw99
buzzsaw99's picture

now that's er, never mind

Thu, 07/24/2014 - 22:33 | 5002038 yogibear
yogibear's picture

Na it happen until the US dollar blows.

Thu, 07/24/2014 - 20:36 | 5001643 short screwed
short screwed's picture

Any word on wage inflation? Or is this just stagflation?

Thu, 07/24/2014 - 20:42 | 5001663 NoWayJose
NoWayJose's picture

Japan will win the race with the US for self-destruction, but only barely, as the US is too far down the path to reverse itself.

Thu, 07/24/2014 - 20:49 | 5001686 buzzsaw99
buzzsaw99's picture

In the shuffling madness
Of the locomotive breath,
Runs the all-time loser,
Headlong to his death.
He feels the piston scraping --
Steam breaking on his brow --
Thank God, he stole the handle and
The train won't stop going --
No way to slow down...

Thu, 07/24/2014 - 22:35 | 5002046 yogibear
yogibear's picture

The US sees it's own currency self destruct with Japan, after all the US Federal Reserve geniuses financially engineered Japan's economy. 

Thu, 07/24/2014 - 20:51 | 5001698 SillySalesmanQu...
SillySalesmanQuestion's picture

Coming soon to a neighborhood near you... If it has'nt already arrived.

Thu, 07/24/2014 - 22:42 | 5002062 AdvancingTime
AdvancingTime's picture

 The moment the Japaneses stock market fails to rise enough to offset inflation this will turn into a tsunami of  money fleeing Japan and constitute the end of the line for those left holding both JGBs and the yen. This has been a long time coming and I contend the cross-border flow of money leaving Japan is why some stock markets have remained so resilient . When Japan crumbles it will be felt across the world. More on this subject in the article below.

 http://brucewilds.blogspot.com/2014/05/japan-sliding-towards-abyss.html

Thu, 07/24/2014 - 23:32 | 5002171 Jimmy Carter wa...
Jimmy Carter was right's picture

Ok Bruce we got you,

Exports just went over the cliff. The trade imbalance is due to LNG and coal, not the end of the world, yet. However Abe needs the yen to go down to 120 to boost exports from the big guns like Mitsubishi heavy industries etc. the problem now is that gasoline for Mrs. Watanabe's car is at 170/liter or 6.80 a gallon, if the yen drops 20% and gasoline rises, there will be demonstrations by the fishing industry first, then others will follow. When this happens, the normally quiet Japanese take notice and start throwing geezers out of office. It's lose lose right now. If you throw out Abe with the slim chance his policy might have worked you lose. If you drop the yen the people get squeezed even more.

Fri, 07/25/2014 - 00:51 | 5002324 royal
royal's picture

inflation is never a good thing, deflation is far preferable

Fri, 07/25/2014 - 06:25 | 5002652 1stepcloser
1stepcloser's picture

hmmm only have a $20 and Tic Tacs are $100 or have no money and tic tacs are $.01.  Either way, you aint get no fucking tic tacs.

Fri, 07/25/2014 - 08:53 | 5002954 Chuck Knoblauch
Chuck Knoblauch's picture

The Globalists don't want Japan or the U.S. to succeed.

I thought you guys would have figured that out by now.

Sure, the multi-national corporations are important.

The nations are not.

Fri, 07/25/2014 - 13:56 | 5004296 dragoneyes74
dragoneyes74's picture

If anyone knows Kuroda over at the BoJ, I wrote a speech for him at his next press conference: 

Dear Holders of JGBs, I would like to take this moment to thank you for your loyalty to our country as we continue to double our monetary base and force you to takes losses as the inflation rate soars over the paltry yield you are receiving for holding our doomed and very toxic bonds.  With CPI holding at 3.4% and the 30-year JGB yielding 1.65%, we feel losing nearly 2% of your clients' money is quite the bargain.  But do we ever have an offer for you!  

To express our great appreciation for matching our madness with madness of your own, and by that we mean still holding our bonds, we have decided to change the way we measure inflation.  Our goal is to bring the inflation rate in at 1% so we can forever be chasing our 2% target!  This way you won't feel like you're losing money.  You totally will be, but no one will be the wiser.  We know, it's a win-win situation for all.  But we're not done!  Since we are well aware that even having a bad dream with a hawk in it will lead the Yen to spike in value, cause a global carry trade unwind, and undermine our attempts at undermining our country, we have decided that our QE programs must continue forever.  Therefore, we fear a day will come when even creating phony inflation numbers to keep the bond holders from selling will be in vain, so we've devised a plan B and plan C.  We leave the choice up to you.  It's kinda like a Choose Your Own Adventure.  

Plan B is to is devalue the Yen in half overnight.  We understand that will cause everyone holding assets denominated in Yen to take great losses, but what choice do we have?  Look to foreign markets to buy our bonds?  Ha!  

Plan C is for you to take a 50% haircut on your bonds.  Yes, we understand for you that is the same thing.  But what choice do we have?  Look to foreign markets to buy our bonds?  Ha!  

In closing, I would like to sprinkle my magic pixie dust and hypnotize you with great optimism and promises of a bright future.  We are NOT heading toward inevitable default that will drag the world down.  We will NOT need foreign buyers.  And we will NOT have a hyperinflation-like loss of faith in our currency due to an increasingly obvious monetization of our debt.  Anyway, everyday, I'm trying to get to it.  Turn down for what.  I'm so fancy.  O.P.P.  And 2 legit to quit.  We will buy all your bonds (but not really).  Wiggle wiggle wiggle.  Shots. Shots. Shots.  Selfie! 

I believe my work is done here.  Good day, gentlemen.      

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