Japan: Labor market remains tight - BBH

Research Team at BBH, suggests that the key takeaway from today’s Japanese data is that the labor market remains tight, with the unemployment rate slipping to 3.0%, the lowest since 1995, and consumption appears to have begun Q3 on a firm note. 

Key Quotes

“Employment rose by 200k in July, while unemployment fell 70k.  The participation rate slipped to 60.3% from 60.5%.  Although both retail sales and overall household spending remain lower than a year ago, both rose in July and by more than expected.  Household spending rose 2.5% in July, and retail sales rose 1.4%. 

The market's focus is on the BOJ meeting later this month and Kuroda's recent reiteration that monetary policy has not been exhausted.  The dollar has already traded on both sides of yesterday's narrow range against the yen.  Yesterday's high was near JPY102.40, and a close above it would be constructive.  Resistance is seen near the month's high in the JPY102.65-JPY102.85 range.  Rising equities today and the firmer US bond yield, (though the 10-year is below the 1.63% level seen at the end of last week),  may see the dollar probe higher in early North American turnover.”