Sun rising in Japan

The sun appears to be rising in the Land of the Rising Sun. Japanese consumer confidence rose to a reading of 43.1 in December from 40.9 in the previous month supported by a rally in the stock market and the yen's depreciation versus the US dollar.

This is sharply above market expectations for an improvement to 41.3 and is the highest level in three years (September 2013).

The Nikkei-225 index jumped by 9.6% in the two months to the end of December 2016 as the yen depreciated by 10.6% versus the greenback over the same period. Yes, 'twas spurred by Trump.

Japanese consumers' confidence rose in all categories: overall livelihood (42.0 in December from 40.7 in November); employment (45.7 from 42.5); income growth (41.9 from 40.4); and, willingness to buy durable goods (42.8 from 40.5).

This follows earlier reports of a strong lift in Japanese business confidence. The Tankan survey of large manufacturers jumped to 10 in the fourth quarter -- its highest reading in a year - from a reading of 6 - the lowest since June quarter 2013 -- in the previous three quarters.

This is consistent with the Markit/Nikkei PMI surveys that showed improvement in both the manufacturing (up to 52.4 in December from 51.3 in November) and services sector (up to 52.3 from 51.8).

Read more: USJapanMarkit/Nikkei PMITankanTrump
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