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Monday, 30 May 2016

Japan index: markets put speed bump in Abe’s path

Japan index: markets put speed bump in Abe’s path

For the first time in six months, Japanese Prime Minister Shinzo Abe’s economic experiment stumbled in May amidst skittish stock and bond markets. But the drop in the Breakingviews Abenomics Index to 93.8, from 94.4 in April, may be temporary as deflation continues to ease. 

Breakingivews' Abenomics Index

Breakingivews’ Abenomics Index

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The Breakingviews Abenomics Index slipped to 93.8 in May, from a revised 94.4 in April. The decline was the first since November.

Six of the 10 components of the index eased. Stock prices dropped, inflation expectations worsened, bond yields spiked up, the current account surplus narrowed, and wages and bank credit dipped.

Among the positive contributors to the index, consumer prices declined at a slower pace in May, spending volumes improved, manufacturing inched up and new housing starts picked up speed for a second month.

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