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cloud-init generate not correctly /etc/locale.gen, like this :
# Created by cloud-init v. 0.7.6 on Thu, 03 Mar 2016 06:25:03 +0000 LANG=en_US.UTF-8
This should be
en_US.UTF-8 UTF-8
LANG=en_US.UTF-8 is valid only for /etc/locale.conf I think the confusion comes from here.