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Japan’s negative CPI result in April being blamed on plunge in mobile phone costs

Don’t worry about the negative Japan CPI print its just from a huge drop in cellphone fees in the month

is the new

Don’t worry about the huge jump in the US CPI in April its just used cars. 

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OK, for Japan:

  • cellphone costs dropped 26.5% y/y In April
  • this is almost all of the negative print for the whole CPI
  • Its a temporary distortion.
For the US in April the vehicle price jump is also a temporary distortion and it wasn’t nearly so important in the jump in the index (much more detail here)

If the ‘temporary distortions’ prove not to be, or are replaced by some other unusual factor or factors, it gives the two central banks something to mull, in opposite directions – what more can the BOJ do? and when does the Fed start to talk taper?  And how high does USD/JPY go?

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