Japan’s growth prospects remain positive, at least in the short term

Jul 01 (think.ing) - Today's numerous data releases, from inflation to labour to business surveys, suggest a positive outlook for Japan in the near term. The overall picture is still mixed and the figures aren't good enough to change the central bank's current stance

Japan's jobless rate unexpectedly rose to 2.6% in May (vs 2.5% market consensus), but that's the first rise in four months. However, the labour participation rate hit an all-time high at 62.7% and the jobs-to-application ratio improved for three consecutive months, which indicates labour tightening going ahead. Although no signs of wage growth have been detected yet, the reopening of the economy and the better Covid situation have improved overall labour market conditions.

Tokyo CPI decelerate to 2.3%YoY in June (vs. 2.5% market consensus) from 2.4% in May, but core CPI, excluding fresh food, rose 2.1% YoY in June (vs 1.9% in May). Energy prices remained high at 21.7% but a bit down from the previous month’s 22.3%. We think government subsides curbed additional price gains in gasoline and diesel. But, manufactured food prices are scheduled to rise in the coming months, thus near-term CPI will stay above 2% for a while.

The Tankan survey results were a bit disappointing as the outcomes missed the market consensus. However, large companies hold more optimistic views on the future outlook, certainly for non-manufacturing companies. The survey's large non-manufacturing outlook rose to 13 (vs 7 in the first quarter) while the manufacturing outlook made a mere 1 point rise to 10 (vs 9 in the first quarter).

Six people dead, two missing in Ishikawa Pref. after torrential downpours

Six people are dead in the wake of torrential downpours in Japan's central Ishikawa Prefecture that have caused rivers to flood and mudslides across the Noto region. Some people living in temporary shelters following the New Year's Day earthquake are once again facing recovery efforts, this time from flooding. (NHK)

First Snow of Season Observed at Mount Rishiri

Signs of winter are already arriving. Mount Rishiri in Hokkaido recorded the first snowfall of the season on Sunday, making it the first observed in Japan this year.

Flying Car Shows Potential for Disaster Relief

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Ohtani Hits Milestone with 52-52 Record

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China to Lift Japanese Seafood Ban

Japanese Prime Minister Kishida Fumio says Japan and China have reached an agreement that will lead to the resumption of China's imports of Japanese seafood. (NHK)

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