Nakajima Quant Desk - English

📊 Tokyo's September flash CPI (released Oct 2 by Japan's MIC) rose 2.7% headline, 2.7% core and 3.0% core-core, a sharp step up from August.

📈 Core-core widened by a full point from Tokyo's 2.0% in August, and core rose 0.9% month on month (seasonally adjusted).

⚠️ But water charges and childcare fees alone added 0.53 points to the change in contribution, so some of the jump may be one-off. Food ex-fresh held at 3.6% and energy was still down 1.9%.

💡 Next up: national September CPI on Oct 23 and Tokyo October CPI on Oct 30. We separate trend from special factors.

📊 Tokyo's September CPI flash (published Oct 2 by Japan's MIC) showed core CPI at 2.7% YoY (Aug: 1.8%) and core-core at 3.0% (Aug: 2.0%), well above the national August readings of 1.7% and 1.9%.

📈 Food ex-fresh at 3.6% and rents at 2.0% point to firm underlying momentum, but water and childcare fees alone added 0.53 points to the acceleration, and last September's weak base also helped the headline.

💡 Mechanically excluding those two items, core accelerated by roughly 0.4 points.

⚠️ This is a mid-month flash and a single month. National September CPI (Oct 23) is the key check.

📊 Tokyo's September CPI flash (MIC) shows core at 2.7% (Aug 1.8%) and core-core at 3.0% (Aug 2.0%), versus Japan's August nationwide core of 1.7% and core-core of 1.9%.

📈 Strength: ex-fresh-food at 3.6%, dining out 4.7%, rent 2.0%, and seasonally adjusted core-core up 0.7% m/m.

⚠️ Caveats: water charges (+0.24) and childcare fees (+0.29) alone add +0.53 to the contribution gap; fresh food slowed to 0.8% and energy is still -1.9%.

💡 Nationwide September CPI is due Oct 23. Whether this is trend or one-off is the key question for BOJ debate.

📊 A deep dive into the Central Bank of Brazil's Focus Market Readout dated Oct 2, 2026.

📈 The 2026 IPCA forecast rose for a third week to 5.01%, above the 4.5% tolerance ceiling.

📉 GDP forecasts were cut for a fourth straight week: 1.85% for 2026 and 1.40% for 2027.

💡 Yet the Selic path was unchanged (13.50% in 2026, 12.00% in 2027), the BRL/USD forecast was flat at 5.20 for 16 weeks, and the 2028 IPCA forecast held at 3.80% for 10 weeks.

⚠️ We also cover the 12.52-point Selic vs BOJ spread and the FX and fiscal risks for yen-based investors.

▶️ Full video on YouTube: https://youtu.be/MWYL2FAi-0c

📊 Deep dive into Japan's September Consumer Confidence Survey from the Cabinet Office.

The index slipped 0.1 to 35.4, but the 3-month moving average rose 0.6 and the official view stayed at 'showing signs of recovery'.

📈 Income (40.5) and employment (40.0) outlooks each edged up 0.1.

📉 Livelihood (33.8), durable goods timing (27.3) and asset value (45.3) fell.

💡 Share expecting prices to rise 5%+ in a year: 47.6% (+1.5pt); any rise: 90.6%.

⚠️ A mixed picture: gradual recovery alongside elevated price expectations. Next up: the October survey.

▶️ Full video on YouTube: https://youtu.be/5oxuHS7PQ0k

This week revealed a clear policy divergence between Japan and the US.

📊 The Bank of Japan delivered another rate hike on Sep 17-18, just 3 months after its last move. The Tankan survey (Oct 1) showed large manufacturers' sentiment beating June forecasts by 7 points.

📉 Meanwhile, the US jobs report (Oct 2) showed nonfarm payrolls rising just 29,000, with the diffusion index falling below 50 for the first time in about a year. July-August gains were revised down by a combined 60,000.

💡 Yet US GDP was revised sharply up to 2.2%, and core PCE remains elevated near 3%. Strength and softness are coexisting in the US economy.

⚠️ We also cover Brazil's fiscal data, Australian CPI, BOE, ECB, and the Riksbank, plus next week's key calendar.

▶️ Full video on YouTube: https://youtu.be/Kmh03U8-K-I

📊 A full breakdown of this week's three key US macro releases.

Initial jobless claims improved to 197,000, with no sign of accelerating layoffs.

📉 Meanwhile, WTI crude plunged roughly 16% in a week. Yet retail gasoline remains 43% higher y/y, keeping energy-driven inflation risk alive.

💰 The Fed's balance sheet grew $148.4B y/y, as Treasury purchases effectively paused QT even as MBS runoff continues.

⚠️ Labor, energy, and liquidity: three signals point to a 'stable but watchful' US economy. We break down the data professionally.

▶️ Full video on YouTube: https://youtu.be/junu6YdhHDY

📊 Breaking down the U.S. August Durable Goods report.

Total new orders grew just +0.1% MoM, down from July's +0.8%, while durable goods orders turned negative at -0.1%.

📉 The main drag: nondefense aircraft orders, down -4.3%.

💡 But core capital goods orders (ex-defense, ex-aircraft)—the key business investment proxy—rose +1.6%, accelerating for a third straight month.

⚠️ Both the unfilled orders and inventory ratios to shipments rose, a sign worth watching.

Next release: Advance September report, October 27.

▶️ Full video on YouTube: https://youtu.be/Y-PEGs3W35M

📊 The September 2026 U.S. Employment Situation report is out.

Nonfarm payrolls rose just +29,000, below the 12-month trend, while unemployment ticked up to 4.2%.

⚠️ The bigger story: July and August were revised down a combined 60,000, and the diffusion index tumbled from 57.6 to 49.0 — a sign of broadening softness.

💡 Yet participation rose to 61.8% and wage growth cooled to a moderate 3.0% YoY.

We break down the mixed signals data point by data point, free of bias.

▶️ Full video on YouTube: https://youtu.be/OC-mWH_Z2Dk

Japan's Ministry of Finance released weekly capital flow data for Sep 6-12. 📊

Foreign investors sold ¥1.52tn of Japanese stocks while buying ¥2.24tn of JGBs — the second-largest bond inflow in a year. ⚠️

The pattern is a complete reversal from the prior week, and USD/JPY fell from 156 to 153.71. 💹

We break down what this contradictory flow means for yields and the yen.

▶️ Full video on YouTube: https://youtu.be/DpoY0NGDeHw