Tokyo consumer prices fell the fastest in more than a decade, while Japan’s jobs market and retail sales remained subdued, data showed on Friday, raising the risks of a return to deflation as the Covid-19 pandemic hammers demand.
The world’s third-biggest economy recovered in the three months to September from its worst post-war contraction, but a third wave of the coronavirus infections threatens the economic revival. The Bank of Japan unveiled a plan last week to examine more effective ways to achieve its elusive 2 per cent inflation target.
The core consumer price index (CPI) for Japan’s capital, including oil products but excluding fresh food, fell 0.9 per cent in December from a year earlier, the steepest drop since September 2010.
That was deeper than economists’ median estimate for a 0.8 per cent fall and deepened from a 0.7 per cent decline in November. The December drop was the fastest downturn since September 2010, when core consumer prices slumped 1.0 per cent.
Nationwide data last week for November also showed the steepest price slump since late 2010.
“There is a chance that the nation will return to deflation due to the coronavirus pandemic,” said Takeshi Minami, chief economist at Norinchukin Research Institute. “Private demand is weak as people, especially older people, stay home to keep from getting infected, making it difficult for prices to rise.”
Japan’s seasonally adjusted unemployment rate fell to 2.9 per cent, better the median forecast of 3.1 per cent, government data showed. In October, the jobless rate stood at 3.1 per cent.
There were 1.06 jobs per applicant in November, up from the previous month’s 1.04, labour ministry data showed, but still near September’s seven-year low 1.03.
The pandemic remained a drag on consumer spending, with a renewed spike in infections raising fresh risks for a weakened economy.
Japanese retail sales rose a moderate 0.7 per cent in November from a year earlier, the second straight gain but slower than October’s 6.4 per cent jump and below the median market forecast for a 1.7 per cent gain.
SPECS
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Other workplace saving schemes
- The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
- Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
- National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
- In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
- Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
ETFs explained
Exhchange traded funds are bought and sold like shares, but operate as index-tracking funds, passively following their chosen indices, such as the S&P 500, FTSE 100 and the FTSE All World, plus a vast range of smaller exchanges and commodities, such as gold, silver, copper sugar, coffee and oil.
ETFs have zero upfront fees and annual charges as low as 0.07 per cent a year, which means you get to keep more of your returns, as actively managed funds can charge as much as 1.5 per cent a year.
There are thousands to choose from, with the five biggest providers BlackRock’s iShares range, Vanguard, State Street Global Advisors SPDR ETFs, Deutsche Bank AWM X-trackers and Invesco PowerShares.
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What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
WHAT%20IS%20THE%20LICENSING%20PROCESS%20FOR%20VARA%3F
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Will the pound fall to parity with the dollar?
The idea of pound parity now seems less far-fetched as the risk grows that Britain may split away from the European Union without a deal.
Rupert Harrison, a fund manager at BlackRock, sees the risk of it falling to trade level with the dollar on a no-deal Brexit. The view echoes Morgan Stanley’s recent forecast that the currency can plunge toward $1 (Dh3.67) on such an outcome. That isn’t the majority view yet – a Bloomberg survey this month estimated the pound will slide to $1.10 should the UK exit the bloc without an agreement.
New Prime Minister Boris Johnson has repeatedly said that Britain will leave the EU on the October 31 deadline with or without an agreement, fuelling concern the nation is headed for a disorderly departure and fanning pessimism toward the pound. Sterling has fallen more than 7 per cent in the past three months, the worst performance among major developed-market currencies.
“The pound is at a much lower level now but I still think a no-deal exit would lead to significant volatility and we could be testing parity on a really bad outcome,” said Mr Harrison, who manages more than $10 billion in assets at BlackRock. “We will see this game of chicken continue through August and that’s likely negative for sterling,” he said about the deadlocked Brexit talks.
The pound fell 0.8 per cent to $1.2033 on Friday, its weakest closing level since the 1980s, after a report on the second quarter showed the UK economy shrank for the first time in six years. The data means it is likely the Bank of England will cut interest rates, according to Mizuho Bank.
The BOE said in November that the currency could fall even below $1 in an analysis on possible worst-case Brexit scenarios. Options-based calculations showed around a 6.4 per cent chance of pound-dollar parity in the next one year, markedly higher than 0.2 per cent in early March when prospects of a no-deal outcome were seemingly off the table.
Bloomberg
