Japan’s “Where is the Recovery” As Seen From Today’s Economic Numbers

Just a few days back I posted here that despite the Japanese equity benchmark,  the Nikkei 225, drifting at fresh 15 year highs and a supposed 4Q 2014 turnaround, an overwhelming number of Japanese—based on a recent survey—have shown skepticism of the much touted “recovery”.

I guess that the skepticism from the ‘man in the street’ can be seen in today’s government economic numbers

All data are from investing.com

Japanese household spending month on month has been on a sharp decline since the BOJ’s pump last November 2014

The decline in Household spending year on year seems at even worst degree than from the Lehman incited global financial crisis in 2008

And the poor showing of household spending chimes with retail activities.  Retail sales (y-o-y) has been sluggish since the 2Q 2014

The deliberate attempt to combust inflation and to tax consumers has led to the distortion of (core) consumer prices…

...that has also been manifested in National CPI

On a month on month basis, only Food has considerably increased (+1.6%). Four out of ten categories posted declines, namely clothes and footwear (-5%), culture and recreation and transportation according to the latest data from the statistics bureau of the Ministry of Internal Affairs and Communications. The rest had zero or marginal increases.

Such are signs of depressed leisure activities from the average Japanese.

And unemployment has spiked in January. Officials rationalize this as “a rise in the number of people seeking jobs”

Nonetheless there seem as one good news.

Industrial production (month on month) rose to its highest level since 1q 2014

However as seen from a longer time frame, since the introduction of Abenomics, industrial production growth rates have been sharply oscillating. In addition, growth expectations for February has been at only .2% and at –3.2% in March, thus hardly a basis for optimism.

Bottom line: Abenomics continues to drive a wider wedge between the real economy and financial assets—a parallel economy.

The above will only add pressures for the BoJ to ease from vested interest groups.

Yet the latest promise by BoJ’s Kuroda to further stimulate has pacified the recent rebellion in the JGB markets. But question is how long will bond vigilantes be kept sidelined without real actions by the BoJ?

Record stocks in the face of record imbalances at the precipice.