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Robert Carnell – Chief Economist Head of Research, Asia-Pacific at ING – offered his take on Tuesday’s rather disappointing release of average cash earnings data from Japan.

Key Quotes:

Japan’s labour cash earnings just released were in line with expectations, falling 0.2%YoY in August. In real terms, earnings fell 0.6%YoY, an improvement from -1.7% in July. But these figures are still dreadful, and with business investment and exports in Japan hampered by the ongoing tech slump and trade war uncertainty, if the outlook for consumer spending is not supported by earnings, then overall GDP growth has little underpinning.
Fortunately, the consumption tax hike is providing some impetus for continued spending, and household spending is bucking these earnings figures and growing by 1.0%YoY (August figure). That’s unlikely to last.