The smoke signals ahead of BoJ meeting next week/Some earnings comments

Ahead of the BoJ meeting next week, the leaked and political signals so far are mixed on what they will do. There was a Bloomberg story yesterday that said "Bank of Japan officials see weakness in consumer spending complicating their decision over whether to raise interest rates at a policy next week, according to people familiar with the matter." I'm not sure why they don't realize that it is falling REAL wages that helps to explain that and why they should raise rates to contain inflation that would lift REAL wages. 

The article further said "Some officials take the view that skipping a rate hike in July is an option to provide more time to examine incoming data to confirm if consumer spending will pick up as expected, the people said. Some of them hold the position that the BoJ should avoid giving the impression of being overly hawkish, they said." As the BoJ has redefined the word 'patience', I don't think the BoJ would ever get accused of being 'hawkish.'

Regardless of how these BoJ officials feel though, the persistent weakness in the yen has the Japanese government not happy and the yen is rallying to the highest vs the US dollar since early June, notwithstanding the BoJ comments, because of what a ruling party member of the LDP said overnight "Excessive yen declines are clearly negative for Japan's economy." This official wants the BoJ to lay out a plan for a pullback in the easing and said the economy can handle it. "The BoJ needs to clearly communicate that it will firmly proceed with the normalization of monetary policy." The 10 yr JGB yield was up 1 bp to 1.07%.