Japan will not exit YCCC

Pantheon with a note I agree with. JPY and the energy bust is taking care of inflation as we speak.

The BoJ Likely will Stand Fast, Despite the Jump in Tokyo Inflation

Tokyo inflation beat expectations in January, but this is likely to be the peak before headline CPI slows, as a result of government energy subsidies. Tokyo headline CPI accelerated 0.5pp to 4.4% year-over-year in January, well above market expectations for 3.9%. Food and energy remain the chief drivers, while price rises of clothes and footwear, and recreational services also contributed to the ratcheting up of inflation. The contribution of food to the headline CPI rose 0.1pp to 1.9pp, while that of energy was steady at 1.2pp.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.