ASIA STOCKS: Foreign Investors Continue Selling Asian Equities

• MNI: UK JAN BRC SHOP PRICES -0.4% M/M, -0.7% Y/Y

BRC-NielsenIQ Shop Prices became less deflationary in January at -0.7% Y/Y (vs -1.0% in December). However, recall that the December data was impacted by including Cyber Monday and the late Black Friday sales (which weren't included in the prior year). So it is more beneficial to compare the January Y/Y prints with November's fall of -0.6%Y/Y for a more representative comparison that is less impacted by calendar effects.

• Overall the Shop Price Index remains in deflation for the sixth consecutive month.
• Food price inflation softened to 1.6% Y/Y from 1.8% in both December and November. Absent any revisions this was the lowest Y/Y food price inflation reading since November 2021, prior to the escalation of the Russia-Ukraine war. On a M/M basis food prices rose 0.5% but January is usually sees strong food price growth and the 0.5% print was the softest January M/M increase since 2015.
• Non-Food Prices returned to their November Y/Y reading of -1.8%Y/Y in January (they reached -2.4%Y/Y in December but as noted above last month's print was skewed by the timing of Black Friday sales). This was the tenth successive that non-food prices have remained in deflationary territory. The press release notes there were "significant discounts, particularly for furniture and fashion."
• On a sequential basis, the overall shop price index fell 0.4% M/M while non-food prices fell 0.9%M/M. Note that this is non-seasonally adjusted data, and is also impacted by calendar effects in December as noted above.
• Looking ahead, the Chief Executive of the BRC highlights price cuts may not last much longer as Budget policies including higher employer NICs, wages and a new packaging levy are implemented.
• We note there continues to be divergence between the official ONS series and the BRC-NielsenIQ Shop Price series with both the official food and non-energy industrial goods categories both having shown signs of bottoming out in the middle of 2024. while the BRC Shop Price series shows food prices remaining in deflation and non-food Y/Y prices having not picked up substantially since the middle of 2024.
• Survey Period: 1 to 7 January 2025.

• MNI: JAPAN DEC SERVICES PPI +2.9% Y/Y; NOV UNREV +3.0%
• JAPAN DEC SERVICES PPI 0.0% M/M: NOV REV +0.3%