First, let's recognize the US's ISM manufacturing index for August for the comprehensive strength it reported. It underlined the message that this recovery in an economy running short of inventory is producing joint supply and demand shocks. Even though production surged, so also did work backlogs, whilst customer inventories shrank even more. Essentially, manufacturing supply can't keep up with the inventory-accelerated mini-cycle, and one result is also the worst inflation in prices paid since November 2018.
The bulk of today's report, however, is on Japan's massive MOF quarterly survey of private sector balance sheets and p&ls. This is detailed enough to allow us to do a nearly-full Dupont analysis of corporate Japan. What corporate Japan could and couldn't do when faced with a 17.7% yoy collapse in demand is probably very similar to what most companies have been doing.
