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Thursday, April 24, 2014 9:05 PM


Japan CPI +2.7%; Tale of Two Headlines


Japan's CPI spiked to 2.7% this month. What's more interesting is how it was reported in various places.

Less Than Expected

The Wall Street Journal reports Japan CPI Rises Less Than Expected.

A closely watched Japanese inflation gauge rose a bit less than expected in April, the government said Friday, creating room for possible doubts among Bank of Japan 8301.TO +0.81% policy makers that the recent increase in the domestic sales tax would stoke strong upward price movements.

The core consumer-price index for the Tokyo metropolitan area climbed a preliminary 2.7% from a year earlier in April, the largest gain since 1992, according to data released by the Ministry of Internal Affairs and Communications. Core CPI exclude volatile fresh food prices.

Economists polled by The Wall Street Journal and the Nikkei had expected an increase of 2.8%.

While the figure dwarfed a 1.0% rise in the previous month, the big jump was largely due to a sales tax increase of three percentage points that kicked in at the start of this month. By a Bank of Japan measure that cleans CPI data of the effects of the tax change, underlying inflation in Japan's capital was unchanged at a 1.0% increase.

The nationwide core CPI for March increased 1.3%, the same as in February, the Internal Affairs Ministry said. Economists had expected a 1.4% rise.
Tokyo CPI Spikes To Highest Since 1992

The ZeroHedge headline reads: Tokyo CPI Spikes To Highest Since 1992 (Well Above Abe's 2% Target)
If this evening's data from Tokyo on April's Consumer Price Inflation is any guage on the national inflation picture, those hoping for moar stimulus had better start praying for war. Thanks to favorable comps and the April 1st tax rise, Tokyo CPI jumped to 2.9% YoY - its highest since 1992 - and well above the BoJ's 2% inflation goal. Mission accomplished (almost)... except that the economy just won't play ball and now stocks are fading too (along with Abe's approval ratings).
Which story more accurately reflects what happened? I vote for the WSJ.

 Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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