Japanese stocks closed higher today after mixed economic data releases showed inflation grew slower than expected, the unemployment rate fell to everyone's surprise and consumer spending fell less than expected year-over-year. What all this data means is the BoJ is less likely to raise rates in January. Of particular concern is the minimal growth in inflation, +0.2% in Nov. y-o-y, versus +0.1% in Oct., capped by lower fuel costs from peak summer levels and the wide availability of cheap imports. Also, consumer spending has fallen every month this year (y-o-y), -0.7% in Nov., compared to analysts' estimate of -1.5%. November unemployment fell 0.1% from Oct. to 4.0%. PM Shinzo Abe called on business leaders in a year-end address to the Keidanren (Japan Business Federation), saying "I would like you as company executives to shift your high earnings to individual households. It is necessary to build an economy in which everyone can share the benefits." The BoJ concludes its next rate decision meeting on Jan. 18.
• Sources: Bloomberg, Forbes XFN-ASIA, Taipei Times
• Related commentary: BoJ Keeps Target at 0.25%, More Data Watching, BoJ's Tankan Improves In-line, Stocks Climb Higher, Still No Love for Japan's Mega Banks, Japan: No "Soft Patch" Despite Weaker Economic Data,
• Potentially impacted stocks and ETFs: Mitsubishi UFJ Fin. Grp. (NYSE:MTU), Mizuho Fin. Grp. (NYSE:MFG). ETFs: iShares MSCI Japan Index (NYSEARCA:EWJ), iShares S&P/TOPIX 150 (NYSEARCA:ITF)
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