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Japan Debt in the ‘Quadrillion’ Zone

According to an article published in the Wall Street Journal today,Japan’s central-government debt topped the quadrillion-yen mark for the first time ever in the second quarter.
The central government’s outstanding liabilities totaled ¥1.009 quadrillion ($10.44 trillion) at the end of June, up from Y991.601 trillion three months earlier. 

The figure is more than 200% of what Japan’s economy, the world’s third-largest, produces per year. That’s by far the highest debt load among industrialized economies.

Add some ¥200 trillion of outstanding long-term municipal debt and the ratio jumps to 250%.

Still, the data may help Prime Minister Shinzo Abe to follow through with a plan to raise the consumption tax.

“Given that the fiscal deficit is running high and government debt outstanding has already reached extremely high levels, it’s quite important for the government to show a clear path toward fiscal consolidation, and implement it,” Bank of Japan Gov. Haruhiko Kuroda said Thursday.

The debate over the plan to raise the 5% sales tax to 8% in April and 10% in October 2015 has intensified recently as two of Mr. Abe’s economic advisors say the hike should be phased in more slowly to cushion any blow to growth and let the recovery take root. 

The Japanese central bank, Finance Ministry and International Monetary Fund are trying to refute the arguments for delaying the planned tax hikes. Mr. Kuroda said Japan’s recovery is solid enough to take tax hikes in stride.

Unnerving tax-hike proponents is the fact that Mr. Abe belongs to a group of so-called “reflationists,” whose want to rely mainly on monetary easing to revive Japan’s deflating economy. Many of them prefer to rely more on growth than on tax hikes to fix government finances.

Backers and critics of the tax plan are closely watching initial estimates for Japan’s April-June quarter gross domestic product, out Monday morning. Mr. Abe has said that data point will be key in deciding whether he will push the tax rate higher next year.

Source: WSJ

BOJ: Keeps ultraloose monetary policy

The Bank of Japan on Thursday maintained its ultraloose monetary policy introduced in April and left unchanged its assessment of the national economy that it is "starting to recover moderately," after upgrading the view for seven consecutive months.

On Japan's consumer prices that turned higher in June for the first time in one year and two months, the central bank said the size of the year-on-year increase in the index is likely to expand gradually. The BOJ is aiming to achieve an inflation target of 2 percent in about two years.

Source:  NewsonJapan

China's fixed asset investment grew 20.1%

China's urban fixed-asset investment grew 20.1 percent year on year in the first seven months, staying flat from the figure for the first half, the National Bureau of Statistics announced on Friday.

Source:  Xinhua

China's: Industrial output rose 9.7% in July

China's industrial output growth picked up in July, according to data released Friday by the National Bureau of Statistics (NBS).

Industrial value-added output expanded 9.7 percent year on year in July, 0.8 percentage point higher than June's 8.9 percent and the highest growth in past five months, data show.

The industrial output growth data reflected a similar acceleration in the manufacturing purchasing managers index (PMI), which rose slightly to 50.3 percent in July from 50.1 percent in June, according to survey results published by the China Federation of Logistics and Purchasing and the NBS last week.

On a month-on-month basis, industrial output growth in July added 0.88 percent from June, according to the NBS.

During the first seven months of the year, industrial value-added output increased 9.4 percent year on year.

State-owned enterprises registered an annual growth rate of 8.1 percent in July, while overseas-funded companies posted growth of 7.9 percent in the month. Joint-equity companies led the gains by expanding 11.1 percent in the month.

Source:  English.news.cn

China's retail sales grew 13.2% in July

China's nominal retail sales grew 13.2 percent year on year in July to 1.85 trillion yuan (300.2 billion U.S. dollars), the National Bureau of Statistics (NBS) announced on Friday.

The growth rate was down by 0.1 percentage point from June, but it was higher than the 12.7-percent growth for the first half of 2013, according to NBS data.