Economic data points to softer growth for the Japanese economy to start the year
The recent strength in the Japanese yen appears to be hurting the economy by quite a bit at the start of 2018. While Japanese data points are often overlooked and not paid attention to, it culminates into something bigger when you start to spot a trend.
The manufacturing PMI released earlier here continues to show a declining trend, and last week's industrial production figures here also dipped lower.
Production figures are slowing, and that's not a surprise since exporters would be disadvantaged to do so when the yen is showing such strength over the last few months.
To cap things off, we had the monthly GDP proxy data and the figure there also doesn't really show an encouraging sign for the Japanese economy to start the year.
The worst part about it for the BOJ is that with rising trade tensions, geopolitical tensions, and the fact that the dollar remains weak, this could carry on for quite some time still. And that will dampen any optimism on growth in the economy - and quite possibly set them back further from having to normalise monetary policy.
