From Europe to Japan, inflation expectations slows
Inflation in Japan slowed for a second month, giving central bankers reason to wait before ending their negative rate policy. While the data support the view the Bank of Japan officials won’t rush into the first rate hike since 2007 when they meet next week, services prices remained elevated and suggest that an eventual normalizing of policy remains on the table.
Inflation expectations declined in Europe, while retail sales and consumer sentiment in the US increased.
Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:
World
Bank Indonesia left its benchmark interest rate unchanged, and signaled caution in easing monetary policy as it awaits more convincing signs of rupiah stability and manageable inflation. Angola also held while Kazakhstan and Paraguay continued their rate-cutting campaigns.
Asia
Japan’s latest inflation report gives the BOJ another reason to wait beyond next week’s meeting before ending the negative rate policy, while also adding to the case for a hike in coming months.
For a second month, services prices rose at the fastest pace in three decades when excluding periods distorted by sales tax hikes.China’s deflation was driven by falling prices in its manufacturing sector last year, adding to the risk of trade tensions with the US and Europe amid a major ramp-up in Chinese industrial capacity.
Japan welcomed 25 million tourists in 2023, the largest number since 2019, as a weak yen helped attract post-pandemic visitors in a boost to the nation’s fragile economy. The return of large numbers of visitors to Japan is a positive development for an economy that shrank at the sharpest pace since the height of the pandemic in the summer.
China’s
