A hawkish super-core inflation release this morning from Japan! Either you do Japan or Japan will do you. Here is what to take notice of.
1) The trimmed mean of inflation re-increased to 2.9% from 2.7% in SHARP contrast to analyst expectations and BoJ forecasts
2) The share of increasing items in the consumer basket set a new record high of >82%. The inflation is getting more and more broadbased in Japan
3) The “mode” inflation measure (the inflation rate with the highest density in the distribution) is accelerating like crazy, which could be a harbinger of rising services inflation in 1-2 months from now
4) Services inflation is printing above 1% for the first time in many decades (outside of the VAT hike in 2014) and it may lag the service inflation cycle seen in the US by up to 12 months
Bank of Japan will meet later this week.
