News Out of Japan Points to Strength

A slew of Japanese data came out today, pointing towards a mediocre pace of growth for Japan. A list of the reported data is as follows:

- Markit/JMMA PMI for May was 51.5, as compared to the 51.1 expected, showing signs of expansion and growth
- Household Spending 1.5% year over year, below the expected 3.0%
- Unemployment rate came in at 4.1%, as expected
- Job-applicant ratio was 0.89, higher than the expected 0.87
- Industrial production (preliminary) was up 1.7%, almost triple the expected 0.6%
- April Industrial Production (preliminary) registered -2.3%, better than the expected -3.4%
-  National CPI y/y for April: -0.7%  (expected -0.7%, prior was -0.9%) as expected
- National CPI Ex-Fresh Food y/y for April: -0.4% (expected -0.4%, prior was -0.5%) as expected
- National CPI Ex Food & Energy for April y/y: -0.6 % (expected -0.7%, prior was -0.8%) better than expected
- Tokyo CPI y/y for May : -0.2 % (expected -0.4%, prior was -0.7%) better than expected
- Tokyo CPI Ex-Fresh Food for May y/y: +0.1 % (expected -0.2%, prior was -0.3%) better than expected
- Tokyo CPI Ex Food & Energy for May y/y: -0.3  % (expected -0.7%, prior was -0.7%) better than expected

All in all, gains in the markets reflected the mostly positive news releases, the Nikkei posted gains of 2.06% as of writing. Bank of Japan Deputy Governor Nakaso spoke at the Japan Cabinet Office ESRI international conference, stating that aims to hit 2% inflation were in place and a time frame to hit that target was approximately two years.As such, the Bank of Japan is committed to maintaining their QE, while keeping a close eye on the yields of Japanese bonds. He doesn't expect a big spike in yields and believes that recovery for Japan will be evident mid 2013 with a stronger economy.