Japan: Unemployment Down, GDP & Consumption Up

The latest data on the Japanese unemployment rate has moved back to the 4.1%. It's been popping around this level for the past few months.

The level itself is healthy, to say the least. We may have some gains to go with this. Here's the chart:

That was a chart from the Japanese Statistics Bureau. I've not been able to get all of the historical data for Japan on unemployment.

Nonetheless, I looked at consumer consumption just the other day. Consumption is still heading higher, along with GDP. As long as the rate of growth in consumption continues higher, a factor of personal earnings moving higher, then there's likely to be some room for the continued strength in employment. The only real crux is the looming slowdown in the U.S. economy. That will likely have a factor in the world economies.

For now, however, I don't see this release having a huge affect on interest rate decisions at the BoJ. I think they are going to continue to move rates up ever so moderately. There's no real hurry, and with that, any large moves pending in the yen.... for now. One factor to keep in mind is that if the U.S. economy slows, there is going to be a drag on the Japanese economy. The world has proven that it is not immune to the U.S.'s economic woes. If the U.S..... scratch that... WHEN the U.S. hits its recession, then the world will feel it. This will likely pause any BoJ moves temporarily. At the same time, the U.S. will be likely moving rates lower. The interest rate differential will narrow because of that. That will likely start happening in the late fall of this year, going into winter. Look out for that economic scenario as it will drag the dollar down when interest rates begin to fall.