Ratings agency Fitch have released commentary this morning in relation to the surprise decision from the Bank of Japan to increase the size of their QQE...

Ratings agency Fitch have released commentary this morning in relation to the surprise decision from the Bank of Japan to increase the size of their QQE program. The group states the decision weighs on their A+ sovereign rating with a negative outlook. Perhaps the most striking line from their analysis is this - 'Fitch believes Abenomics' prospects for a sustainable rise in nominal GDP growth - leading to a lasting exit from deflation - hinge on strengthening wage growth. Nominal wages rose 1.5% on a three-month rolling average, yoy basis, in August 2014, but real wages fell 2.6% as the consumption tax hike feeds through to higher inflation.' In other words, despite the weaker Yen, firmer asset prices and higher nominal inflation, in real terms, Japanese household purchasing power is diminishing at present. (VIEW LINK)