Following last night's record plunge in Japanese retail sales, tonight was another slew of crushingly bad data for Abe and his motley crew of money printers to reflect on. First Household Spending cratered 4.6% YoY - its biggest drop since the Tsunami (and markedly worse than expectations which were bad enough due to the tax hike repurcussions). Then, Industrial Production tumbled 2.5% MoM - its biggest drop since the Tsunami (considerably worse than the 2.0% drop expected and the slowest YoY growth in 8 months). While this would typically be the kind of bad news that is great news for QQE-hopers, it was disastrously capped by a surge in Japanese CPI (well above BoJ target 2% levels) crushing moar-easing hopes as Barclays see no further easing in 2014 (and even Goldman pushes any hope off til October at the earliest).
First Houshold spending missed and plunged...
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Then Industrial Production missed and plunged...
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And then inflation took off - as Goldman so handily exposes below, adjusted for the tax-hike, this was a major spike in inflation...
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We accordingly revise our outlook for the BOJ’s next easing action to October 2014, from July 2014 previously.
and then Barclays gets even more bearish...
- BARCLAYS SEES NO FURTHER BOJ EASING IN 2014 IN 'BASELINE' VIEW
Goldman sounds glum, having already given up on the J-Curve...
We get the impression the correction is larger than the government anticipated, but in line with our expectations. With domestic demand likely to fall, we see external demand leading growth in FY3/15. We highlight risk factors in the form of protracted weakness in China and other Asian economies and a decline in corporate Japan’s structural export capacity.
Time to stock up on Depends...Time to blame El Nino again
The reaction so far...
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