The government is due to announce its medium-term fiscal plans in June. Either this will mark the start of a long period of fiscal restraint, weakening the economy again and requiring further monetary loosening (we think this is the most likely outcome). Or the plans will lack credibility, in which case Japanese government bonds and financial markets generally would be hit hard. In either scenario, the yen looks vulnerable.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services