Japan Economics Focus Shrinking BoJ balance sheet won’t have big impact While the Bank of Japan’s JGB holdings have started to shrink and will continue to do so now that Yield Curve Control is over, we think that the normalisation of the Bank’s balance sheet could take up... 26th March 2024 · 12 mins read
Japan Economics Focus Services inflation will moderate again While most of the recent pick-up in services inflation has been driven by just a handful of components, there’s been an upward shift in the distribution of price changes across the CPI basket. However... 15th January 2024 · 9 mins read
Japan Economics Focus Long-term debt sustainability still under threat The recent sharp fall in Japan’s ratio of public debt to GDP reflects one-off factors that won’t be sustained. While the influence of rising bond yields on the trajectory of the public finances will... 8th January 2024 · 18 mins read
Japan Economics Focus BoJ policy rate will reach 2% by 2030 The recent period of high inflation in Japan has kick-started a virtuous cycle between wages and prices. If inflation expectations remain elevated and structural forces push up the neutral rate of... 27th November 2023 · 15 mins read
Global Economics Focus The shape of the fractured world economy in 2024 Our expanded Global Fracturing database allows clients to analyse how geopolitical pressures are reshaping global economic and financial activity. Here, we highlight some of the key findings. 16th November 2023 · 10 mins read
Japan Economics Focus Faster wage growth should give BoJ confidence to tighten With wage growth set to strengthen further over the coming year, we think the Bank of Japan will soon have sufficient confidence in the sustainability of higher inflation to end negative interest... 1st November 2023 · 13 mins read
Japan Economics Focus Japan is not on the cusp of a lasting turnaround Japan bulls have proposed a range of explanations to justify the outperformance of the TOPIX relative to other equity indices over recent months. While there are some signs that firms are enjoying... 24th July 2023 · 18 mins read
Japan Economics Focus The electric vehicle threat to Japan’s car industry Japan’s carmakers face an existential threat from the emergence of cheap EV exports from China. Even in a benign scenario where carmakers eventually jump on the EV bandwagon, we suspect that they... 8th June 2023 · 18 mins read
Japan Economics Focus What to do about Japan’s large corporate surplus? Japan’s large corporate sector surpluses are a key source of deflationary pressure. Corporate savings surged in the 1990s, primarily because net interest payments slumped, and have since remained... 2nd May 2023 · 16 mins read
Global Economics Focus Introducing our new financial conditions indices (FCIs) We have revamped our financial conditions indices (FCIs) for DM economies. This document sets out a framework for analysing financial conditions, explains our methodology, presents and interprets our... 18th April 2023 · 20 mins read
Japan Economics Focus What does a weak yen mean for Japan? The yen may have bottomed out against the dollar, but it is likely to remain weak for some time. That should boost Japan’s economy as higher revenues from exports and from overseas subsidiaries... 2nd August 2022 · 15 mins read
Japan Economics Focus What would tighter monetary policy mean for Japan? We don’t expect the Bank of Japan to tighten monetary policy meaningfully but, with inflation about to breach 2%, what if we are wrong? The direct impact of higher interest rates on the corporate... 18th May 2022 · 15 mins read
Japan Economics Focus What would it take for inflation to surge in Japan? A perfect storm of surging house prices, a further worsening of supply shortages, and a pick-up in labour mobility would be needed to cause an inflation surge in Japan. Even if inflation did reach 2%... 8th February 2022 · 17 mins read
Japan Economics Focus What does deglobalisation mean for Japan? There are good reasons to think that the natural stalling in globalisation underway won’t do much damage to Japanese manufacturers. And while an abrupt severing of supply chains between China on the... 21st September 2021 · 13 mins read
Japan Economics Focus Transition to carbon neutral 2050 wouldn’t harm growth Achieving net zero emissions in Japan in three decades is a difficult but achievable task. And while the most carbon-intensive sectors may face significant headwinds, overall we agree with PM Suga... 29th June 2021 · 30 mins read
Japan Economics Focus Sluggish inflation may boost yen further We think that inflation in Japan will remain subdued while the pandemic will result in a rise in US inflation to above the pre-virus pace. With both the Bank of Japan and Fed likely to remain inactive... 13th November 2020 · 19 mins read