Tuesday, 21 January 2014

Favourite charts today - Japan, Asia and 10% corrections

A few charts that caught my eye today...

This chart, about Japan, I sourced from Fast FT.  It speaks for itself.  To me this is the key downside risk with Abenomics: that trying to stimulate growth and inflation without a rise in wages is fraught with risks.  I have cited a couple of times in the last few weeks recent research that shows only a small minority of Japanese companies are increasing wages at the moment.  This needs to change if fading consumer confidence is not going to threaten to pull down the Nikkei - ex maybe a further fall in the Yen, which itself heightens import prices and potentially further reducing consumer purchasing power. 

Interesting growth/interest rates related chart for the Asia ex-Japan region.  Implies a more challenging time than seen outside the 2008-9 period over the last ten years. 

A long time since the last big correction in global equity markets?  Yes...but not statistically very extreme...yet


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