Japan's core machinery orders were expected to post a modest -2.6% drop. Instead they had a worse collapse than anything seen in the aftermath of the Fukushima disaster, plunging by a stunning 14.8% . And the kick in the groin cherry on top was the current account surplus plunged by 62.6%: consensus forecast: -14.5%. The Japanese economy has once again ground to a halt, only this time it has no earthquake or nuclear explosion to blame. This time it is the entire world's fault, where demand has collapsed proportionately. As a reminder the BOJ expanded its QE yet again on April 27. Must be time for another QE because this time will certainly be different after more than 30 years of failures. It is time for those brilliant central planners Ph.D's to do engage in more of the same insanity that Einstein warned about decades ago. And incidentally this is not a joke: on Thursday the BOJ is expected to ease yet again. As a reminder, the BOJ already buys ETFs, Corporate Bonds, and REITs. What's left: gold?
Instant View via Reuters:
HIROSHI SHIRAISHI, ECONOMIST, BNP PARIBAS
"The numbers are weak. Although the BOJ tankan indicated stronger (capital spending), uncertainty about the outlook for the overseas economy is making Japanese companies cautious. "Things won't be as strong as the tankan suggested. We didn't think capital spending would be that strong, because we can't expect much growth in overseas economies. "The pace of capital spending is gradually becoming weaker. "We believe that BOJ will loosen monetary policy (at Thursday's meeting)."