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Japan wants to believe the sales tax impact is fading … but here’s the tell its not confident

Japan’s Cabinet released its economic assessment late yesterday, Mike had the headlines here: Japanese government maintains overall economic view and I had a preview of the more cautious tone expected here: Nikkei reports: Japan government to say production weak in August

Analysts at Brown Brothers Harriman are saying of the Cabinet report:

  • “Officials want to believe… that the impact of the sales tax hike is fading; However, a small tell that it is not as confident as it may appear was revealed in how it characterized industrial output.” Prior to Tuesday’s report, government had said “industrial production had ‘weakened recently’, but this time it dropped the word ‘recently’”

BBH go on to say the Cabinet report “should raise the significance of Friday’s industrial production report”

  • The market consensus is to look for a +1% in July, but … “even if the consensus is right, the year-over-year rate would fall into negative territory”

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Japan Industrial Production preliminary for July is due at 2350GMT on the 28 August.

Source: 

Japan wants to believe the sales tax impact is fading … but here’s the tell its not confident

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