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Household spending: sagging. Industrial production: fragile. Unemployment: edging back up. With exception of a surprise ...
lift in retail sales, it's not great news for Japan's economy - especially after the painful 6.8 percent plunge in GDP last quarter following Prime Minister Shinzo Abe's sales tax hike.
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Household spending: sagging. Industrial production: fragile. Unemployment: edging back up. With exception of a surprise lift in retail sales, it's not great news for Japan's economy - especially after the painful 6.8 percent plunge in GDP last quarter following Prime Minister Shinzo Abe's sales tax hike. (SOUNDBITE) (English) REUTERS REPORTER, JON GORDON, SAYING: "If you strip out the inflationary effects of the sales tax hike from this latest CPI number, they come in at just 1.3 percent - a fair ways off from the two percent target held by the Bank of Japan. And while the street is increasingly sceptical of the BOJ's ability to meet that pledge, sources tell us the central bank will not revise it down anytime soon." That's important because it suggests Japan's central bank will likely hold off on increasing stimulus measures for now. But at least the Japanese currency is playing ball, right? Dollar/yen now within striking range of 104, the softest it's been since the Abenomics hype was at a fever pitch way back in January. And Abe still does have a few interesting ideas. An upcoming re-shuffle of his cabinet should see more female ministers appointed - a move aimed at inspiring the country's women to emphasize their own careers, and also to support his political party. Looking ahead though, more clouds linger. A planned second sales tax hike risks bruising already frail consumption. Separately, the rising cost of importing energy, a downside of the weaker yen, means higher production and manufacturing costs, limiting gains for the country's exporters. For Shinzo Abe, the difficulties highlighted by these competing and at times contradictory effects are becoming more acute as we go further along into his economic revitalization plan. ENDS