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JPY Slides After Japanese GDP Disappoints (Again); Economy Minister "Hopes" For Wage Increases

Submitted by Tyler Durden on 02/15/2015 20:39 -0400

It appears "hope" is a strategy in Japan. Abe's nation emerged from recession in Q4 but with business spending (capex grew at a mere 0.1%) and private consumption (+0.3% - which Amari defined as "solid private demand supporting economic recovery") both coming in considerably below estimates, Japanese GDP QoQ SAAR grew at+2.2% (missing expectations of 3.7%) but real GDP growth was negative for the 3rd quarter in a row. Of course the GDP deflator grew at 2.3%, beating expectations, is desperately clung to by Japan's economy minster Amari as evidence of the end of deflation in Japan.

Real GDP growth negative for 3rd quarter in a row...

Japanese GDP Deflator surged (again) to 2.3% - its largest on record... (since 1995)

And on th eback of that load of crap... Japan's Economy Minister Amari said the following:

*AMARI: DEFLATOR SHOWS CONDITIONS FAVORABLE FOR DEFLATION EXIT
*AMARI: JOB, INCOME CONDITIONS MAY CONTINUE TO IMPROVE
*AMARI: HOPES FOR WAGE INCREASES AGAIN THIS YEAR

But

*AMARI: CONSUMER SENTIMENT HAS IMPROVED CONSIDERABLY

Which - as far as we remember - sentiment never actually spent any money... actions speak louder than surveys...

*AMARI: CONDITIONS FOR ECONOMIC UPTURN ARE FORMING

Oh yes they are... any year now..

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Sun, 02/15/2015 - 20:46 | 5788391 HonkyShogun

YORO.

Sun, 02/15/2015 - 21:43 | 5788580 Publicus

Just print yen to fund personal startups for every Japanese. Problem solved.

Sun, 02/15/2015 - 23:06 | 5788823 ILLILLILLI

Maybe we could send them an emergency supply of Hopium...

Sun, 02/15/2015 - 20:48 | 5788396 knukles

Hope and Change
"Please Lord Balnkfiend, please throw us more red hot pennies."

Sun, 02/15/2015 - 20:50 | 5788406 Thenardier

Krugman to the rescue!

Sun, 02/15/2015 - 22:15 | 5788672 BrosephStiglitz

For real. I love the way these politicians in Japan are harping on about wage rises:

They know damn well they are busy trying to squirrel wealth away from their citizenry by increasing their monetary supply. No way the Japanese see a wage rise while their supreme overlords are busy seizing wealth from the productive assets within the Japanese nation.

Sun, 02/15/2015 - 20:52 | 5788408 kristian01

uh, I'm no Kyle Bass, but if the market is up strongly following the report, then I'm guessing the expectations were *not* for 3.7%

Sun, 02/15/2015 - 21:26 | 5788528 i_call_you_my_base

No other way to say it, you are wrong.

Sun, 02/15/2015 - 21:47 | 5788592 remain calm

Not at all. The markets are up because the number was very disappointing, so much so, that they now know that twiddle dee and twiddle dumb ( Kuroda and Abe) will give the markets more of what they love and that is QE, more fucking free money created out of thin air. don't be so simplistic.

Sun, 02/15/2015 - 20:52 | 5788409 ms8173

One of these fuckin countries needs to flat ass go under......that way we can use them as the example! Do it!!!

Sun, 02/15/2015 - 22:12 | 5788600 BrosephStiglitz

If one goes under, many go under. Think Lehman/Sterns/Northern Rock/WaMu. One domino topples and a chain reaction occurs.

Japan holds most of their public debt internally, so they aren't going to be in a Greece scenario.. More likely they will descend into public unrest as their politicians start seizing assets and justifying various reasons to increase the money supply to infinity.

The European nations have higher levels of external debt. It is trickier for them. They have to deal with external creditors. That sort of crap will probably lead to gunboat diplomacy and attempts by external parties to forcibly seize assets and/or find nice ways to freeze them out of the markets. Very much an Athens style scenario, but expanded for the entire European bloc.

I think Armstrong is probably right in that the strengthening USD is going to cause a nation of consequence (not an Iceland) to default on dollar denominated debts, and that will spark a contagion.

Edit: Though honestly, it need not play out as Armstrong has stated, there are so many potential flash-points in the debt markets globally. Looking back in hindsight it will be completely obvious. A subject for Krugman to write about ad-nauseum and act like an expert on. My guess is, whatever is coming will sucker-punch conventional logic, and send the participants in (most) markets into a tail-spin.

Sun, 02/15/2015 - 22:30 | 5788710 ThroxxOfVron

" they will descend into public unrest as their politicians start seizing assets and justifying various reasons to increase the money supply to infinity. "

IMHO, counterfeiting credit/money and using it to buy reits/real property, bonds/tax revenue streams and equity stakes in financial and industrial corporations fully meets the definition of 'seizing assets'..

I think they Abe and Kuroda already told the Japanese stright up that they were gonna flat-out print as much as they felt they needed to in order to achieve their unachievable objectives, and in my book that pretty much means that they are 'increasing the money supply to infinity', too...

Sun, 02/15/2015 - 22:52 | 5788779 BrosephStiglitz

I agree that they haven't exactly made a secret of their intent, but Debt:GDP in Japan hasn't declined, even after Abenomics. Which signals much more destructive policy to come.

Sun, 02/15/2015 - 23:04 | 5788817 disabledvet

The dominos fell in the USA because the Fed was jot afraid to pop the "bubble that did not exist."

Turned out the bubble did exist, the dominos fell...and then "extraordinary measures" were taken...the bulk of which have been wound down now save the real estate one.

Everyone else laughed at the USA for basically "blowing itself up" but none now have the courage to even normalize let alone stop/begin to start QE.

The USA looks like a King Cobra to me right now..."don't tread on me" and "staring the global economy" (sic) "down."

Wanna watch an elephant run for its life? See it see a King Cobra on the roadway.

Still no explosive growth in the USA though.

Very odd...

Sun, 02/15/2015 - 23:22 | 5788854 BrosephStiglitz

The US is not in a strong position. It is just in a slightly less weak position than everyone else.

International investors will be herded into the US economy and then they will get cut down when the US slips.

Sun, 02/15/2015 - 20:55 | 5788416 Atomizer

Japan will have to compete with rival Smart TV manufacturing. Send the product to another semi peripheral port, re-label product for US petrodollar interchange and jerk off with Yen currency exchange to recoup profits.

Sun, 02/15/2015 - 20:56 | 5788419 Atomizer

That's how it works..

Sun, 02/15/2015 - 20:57 | 5788424 kowalli