Summary:

• Tokyo inflation for March points to a slowdown in headline price growth for the whole country
• Industrial output disappoints while the labour market remains in good shape
• NIKKEI (JAP225 on xStation5) makes a big comeback this week, yesterday’s gains on Wall Street come to help as well

It’s Good Friday therefore most of stock markets around the globe are closed today except the Japanese one which is benefiting from decent results seen on Wall Street Thursday. The NIKKEI is adding 1.1% at the time of writing starting the last trading day this quarter with a bullish gap. In terms of currencies there have been no moves of note but the greenback is losing a bit more than 0.15% in early very thin trading. Due to a holiday the macroeconomic calendar is almost empty and the sole numbers being worth paying attention to are those coming from Japan. First of all, Tokyo CPI for March disappointed coming in just at 1% in a year-over-year basis falling short of expectations set at 1.3%. On the flip side, the core gauges did not undershoot forecasts so heavily. The core CPI (stripping out fresh food) increased 0.8% against 0.9% expected by economists surveyed by Bloomberg while the core-core measure (excluding both food and energy) met the consensus at showed a modest 0.5% gain. Do notice that the inflation data from the Japan’s capital is known roughly three weeks ahead of the release for the entire economy, and therefore it is regarded as a guide to the national outcome.

The Japanese labour market keeps tightening with the employment rate surging over the past two months. Source: Macrobond, XTB Research

Apart from inflation there were readings concerning the domestic labour market and they proved to be much more favourable. Although the jobless rate increased to 2.5% from 2.4% in February but this uptick was lower than estimated by analysts. Whereas the job-to-applicant ratio ticked down from 1.59 to 1.58 making a modest disappointment as 1.6 had been forecast. However, there is nothing to scare though as a slight increase in the unemployment rate was taken for granted due to a January’s decline of the jobless rate being driven by higher employment in accommodation, eating and drinking services as well as tourism on increased demand during the Lunar New Year. Do notice that despite a meagre rise in the jobless rate the employment rate kept rising suggesting that more people came back to the labour force last month.

Last but not least, industrial output for February grew 1.4% yoy missing the median estimate at 2.3% yoy marking the slowest growth since October 2016. Obviously, the data did not exert any impact on either the yen or the NIKKEI (it’s up due to decent moods across the pond) albeit they illustrated that the overall macroeconomic backdrop in Japan stayed on a strong footing and this is especially true when it comes to the labour market.

The NIKKEI made a strong rebound from its crucial support line, hence bulls could eye 21900 points as their another checkpoint. If they deal with it successfully a way to higher levels should open. Source: xStation5