Japan just reported inflation of three.5%.
It is a big deal.
Why?
Initially, it’s significantly higher than expectations: 3.5% vs 3.2%.
Secondly, it shows that inflation is popping back upwards in Japan. Last month’s inflation data was 3.2% which was down from the prior month’s 3.3% which was down from the prior month’s 4.3%.
Put simply, after trending down for 3 months, inflation is popping back upwards in Japan.
And eventually… Japan stays the last central bank that continues to be easing monetary conditions.
The Fed is aggressively tightening monetary conditions. So is the European Central Bank in addition to the Bank of England. Only the Bank of Japan stays engaged in Quantitative Easing.
With inflation coming in hot in Japan, the Bank of Japan will soon be forced to finish its money printing. Which suggests the economic system would lose its last and final source of excess liquidity.
Put one other way, the good monetary easing from 2020-2023 would completely over. Every major central bank could be tightening. Liquidity could be exiting the system at an excellent more rapid clip.
What do you think that this could do to stocks?
My proprietary crash trigger knows. It just triggered its third confirmed “SELL” signal in 25 years.
The last two time sit signaled?
2000 and 2008.