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28 Dec 2015
BoJ still of the mark? - Nomura
FXStreet (Guatemala) - Analysts at Nomura explained that there is little probability of all-Japan core CPI picking up sharply in December.
Key Quotes:
"The latest data showed the all-Japan core CPI rising more than the consensus forecast, but that was attributable chiefly to the all-Japan core core CPI.
Looking at individual categories, however, there was a marked boost from overseas package tours and accommodation charges, where prices are volatile. Considering the lack of any accelerated rise in the Tokyo core core CPI, which provides a pointer for the all-Japan core core CPI, we also see little prospect of the latter rising sharply in December.
All-Japan core CPI could hold flat y-y for time being depending on oil price
Based on the assumption of a gradual rise in crude oil prices (as of 14 December, our Japanese economic outlook envisages a North Sea Brent price of USD52.9/bbl at end- FY15 and USD58.9/bbl at end-FY16), we think it likely that the all-Japan CPI will turn up y-y as the negative contribution from energy prices drops away.
Oil prices, however, have fallen significantly since the start of December. If the North Sea Brent price were to hold around USD35/bbl, the all-Japan core CPI inflation rate could in our view well stay around ±0% for the time being."
Key Quotes:
"The latest data showed the all-Japan core CPI rising more than the consensus forecast, but that was attributable chiefly to the all-Japan core core CPI.
Looking at individual categories, however, there was a marked boost from overseas package tours and accommodation charges, where prices are volatile. Considering the lack of any accelerated rise in the Tokyo core core CPI, which provides a pointer for the all-Japan core core CPI, we also see little prospect of the latter rising sharply in December.
All-Japan core CPI could hold flat y-y for time being depending on oil price
Based on the assumption of a gradual rise in crude oil prices (as of 14 December, our Japanese economic outlook envisages a North Sea Brent price of USD52.9/bbl at end- FY15 and USD58.9/bbl at end-FY16), we think it likely that the all-Japan CPI will turn up y-y as the negative contribution from energy prices drops away.
Oil prices, however, have fallen significantly since the start of December. If the North Sea Brent price were to hold around USD35/bbl, the all-Japan core CPI inflation rate could in our view well stay around ±0% for the time being."