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
Japan Economics Focus Unpacking Suganomics Japan’s incoming Prime Minister Suga Yoshihide has said he will “inherit Abenomics” and has been keen to emphasise that not much will change. As such, a major shift in economic policy is not on the... 15th September 2020 · 17 mins read
Japan Economics Focus Will the pandemic hurt Japan’s long-run prospects? We do not expect the coronavirus crisis to undermine Japan’s long-term prospects. Capital accumulation will slow but there shouldn’t be a big impact on the supply of labour. And given that the... 23rd July 2020 · 21 mins read
Global Economics Focus Lasting blow to supply capacity is not inevitable It is by no means inevitable that the coronavirus crisis puts a big permanent hole in the supply capacity of economies (i.e. their ability to produce goods and services). With the right government... 29th June 2020 · 28 mins read
Japan Economics Focus Why did huge monetary stimulus not boost inflation? Premature fiscal policy tightening is part of the reason why inflation did not gain much momentum after the BoJ launched large-scale quantitative easing in 2013. But the main reason why inflation has... 23rd June 2020 · 17 mins read
Japan Economics Focus How worried should we be about regional banks? The profitability of Japan’s regional banks is likely to deteriorate further over the next few years. However, there’s little evidence of asset price bubbles and corporate balance sheets have... 19th February 2020 · 22 mins read
