The Nikkei (Japan media outlet) have a sneak leak of a Japanese Cabinet report due today, Thursday, 21 December 2023, that shows Japanese incomes will rise faster than inflation in fiscal 2024.
Saying its a hopeful sign for consumers even if much of the anticipated boost comes from one-time tax cuts.
Cabinet Office forecast:
- Per-capita income will increase by 3.8% (1.3% from tax cuts, the balance from wage rises that are barely above FY 2023) next year on a combination of lower taxes and higher wages
- Inflation is expected to be in the mid-2% range for fiscal 2024, which begins in April.
Also from the Nikkei today - the draft budget for the new fiscal year beginning in April that will reduce government spending for the first time in 12 years
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Its difficult to see the Bank of Japan falling over themselves to tighten policy with that backdrop.
