Nakajima Quant Desk - English

📊 Japan's Cabinet Office reported the Consumer Confidence Index rose to 35.5 in August, up 0.6pt for a 4th straight month.

📈 The durable-goods buying-time sub-index jumped 1.9pt to its highest since February.

📉 But income growth and employment expectations both declined for the first time in months. Expectations for 5%+ inflation plunged 6.0pt.

💡 We break down the split between headline improvement and internal cracks, plus what it means for BOJ policy and consumer stocks.

⚠️ Next release (September data) is due early October — watch whether income/employment sentiment rebounds.

▶️ Full video on YouTube: https://youtu.be/EF9r7a4wpjM

📊 Deep dive into Brazil's weekly Focus Market Readout survey (data as of Aug 28, 2026).

Selic rate forecasts are unchanged across every horizon, with the 2029 estimate flat at 10.00% for 17 straight weeks.

📉 Yet the 2026 IPCA inflation forecast remains at 5.01%, still above the BCB's 4.5% tolerance ceiling.

GDP growth was cut for a second week, and fiscal deficit forecasts widened too.

💹 We break down what this means for BRL/JPY carry trades and risks for Japanese investors.

▶️ Full video on YouTube: https://youtu.be/8baYdhYna44

📊 Deep dive into Japan's July 2026 Industrial Production Index (preliminary) released by METI.

Production rose 0.1% MoM, marking a 4th straight monthly gain, yet the official assessment remains "flat/directionless."

💡 Beneath the surface weakness, semiconductor manufacturing equipment output surged +45.3% YoY, and capital goods shipments jumped +13.5% YoY—signaling robust capex momentum.

Meanwhile, operating ratio jumped +4.1% MoM even as production capacity fell for a 28th consecutive month—a structural shift in Japan's manufacturing base.

⚠️ The forecast survey points to +6.4% for August, but realization ratios have persistently disappointed, and the business sentiment DI has deteriorated.

We unpack the strength-weakness crosscurrents and their implications for Japanese equities and BOJ policy.

▶️ Full video on YouTube: https://youtu.be/-YA_D28xrrg

📊 This week (Aug 23-30), the RBA and Riksbank both held rates with hawkish undertones, while new Fed Chair Warsh signaled at Jackson Hole that easing won't come easily.

📈 US personal income stayed resilient even as consumer sentiment plunged to 51.7. In Japan, Tokyo core CPI accelerated for a second month and payroll employment extended a 53-month streak.

💡 A week of strength and weakness moving side by side, broken down for investors.

⚠️ Next week's key event: the US August jobs report on Sep 4.

▶️ Full video on YouTube: https://youtu.be/ECy30v2OoJY

This week's top 3 US macro releases, explained📊

💼 Labor: Initial jobless claims at 203K — near historic lows, though the 4-week average is drifting up📈

🛢️ Energy: WTI crude jumped to $87.21/bbl, up 36% YoY. Distillate inventories are 14% below the 5-year average⚠️

🏦 Fed Liquidity: Balance sheet roughly flat, but the reverse repo cushion has shrunk to just $362B💡

Labor, energy, and liquidity are sending mixed signals this week. We break down what to watch in next week's jobs report and CPI data.

▶️ Full video on YouTube: https://youtu.be/GQSC8O0lUZw

New Fed Chair Kevin Warsh delivered his first Jackson Hole address. 📊

Capex surged 9% YoY and S&P 500 profits jumped over 20%, showing real economic resilience.

⚠️ Yet PCE inflation sits at 3.7%, with 54% of price components still rising above 3%.

💡 Warsh declared he's abandoning forward guidance, favoring "discipline, not decision." We break down what this means for rates, markets, and the dollar.

▶️ Full video on YouTube: https://youtu.be/V_KJjOO62Ww

📊 University of Michigan's final August Consumer Sentiment Index came in at 51.7, down 6.3% MoM and 11.2% YoY.

📉 Both current conditions and expectations weakened, with Republicans, older, and lower/middle-income households hit hardest.

💡 Yet 1-year inflation expectations eased from 4.2% to 4.0%, and 5-year expectations held at 3.3% for a third straight month.

⚠️ This mixed signal of weak sentiment and stabilizing inflation expectations complicates the Fed's next move.

▶️ Full video on YouTube: https://youtu.be/ODPTbQ0B1EY

📊 A deep dive into Japan's Tokyo-area CPI for August 2026, released by the Ministry of Internal Affairs and Communications (MIC) on August 28, 2026.

Headline CPI +1.9%, core (ex-fresh food) +1.8%, and core-core (ex-fresh food & energy) +2.0%—all accelerating from July.

💡 Notably, core-core inflation accelerated even as energy prices fell 2.0% year-on-year, and now exceeds the latest national print of 1.9%. As Japan's earliest inflation indicator, this carries real weight for BOJ policy expectations.

⚠️ But temporary factors—like childcare subsidy base effects and decelerating telecom/lodging prices—complicate a simple 'inflation is accelerating' narrative. We break down both sides.

Next national CPI (August) releases September 18.

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

📊 Eurostat's July 31 flash estimate shows euro area annual inflation accelerating to 2.9%, up from 2.8% in June.

🔥 The main driver: energy prices, whose annual rate jumped from 8.5% to 10.0%.

💡 Meanwhile, core inflation (ex-energy, food, alcohol & tobacco) held steady at 2.2%, suggesting underlying pressures haven't intensified.

⚠️ Services inflation ticked up from 3.2% to 3.3%, a sign wage-driven stickiness hasn't fully faded.

🌍 Country divergence remains wide — Germany accelerated to 2.8% while Greece fell sharply to 2.7%.

We break down what this means for the ECB's next move and the euro, with balanced analysis.

▶️ Full video on YouTube: https://youtu.be/EBozPrNy6K0

The Bank of Japan held its policy rate steady at around 1.0%, with Board Member Takata's proposal to hike to 1.25% rejected by majority vote.

📊 Governor Ueda stated the BOJ needs to be "more mindful than ever" of upside inflation risks.

⚠️ He explicitly said the BOJ aims to avoid being "behind the curve."

📈 The Outlook Report expanded risk factors from one (Middle East tensions) to three, adding AI-related demand and FX volatility.

💡 This deep dive decodes the gap between the hold decision and Ueda's increasingly hawkish rhetoric.

This video is for informational purposes only.

▶️ Full video on YouTube: https://youtu.be/hA4160jra6g