Japan Economics Update How much power will the DPP have? Our base case is that the LDP/Komeito coalition will be able to push through major pieces of legislation, including a supplementary budget by year-end, with only minor concessions to the Democratic... 13th November 2024 · 5 mins read
Japan Economics Update BoJ opens door to another rate hike BoJ Governor Ueda sounded more optimistic today and we’re sticking to our forecast of another rate hike at the Bank’s next meeting in December, though we don’t expect further tightening in 2025. 31st October 2024 · 3 mins read
Japan Economics Update Yen could weigh further on the TOPIX We argued last year that the relative strength of Japan’s stock market mostly reflected the weak yen rather than a fundamental transformation of its corporate sector. Developments since then suggest... 23rd October 2024 · 6 mins read
Japan Economics Update Tourism industry still struggling Despite the surge in foreign visitors, Japan’s tourism industry is still struggling as domestic tourists have slashed holiday spending in the face of plunging real incomes. 9th October 2024 · 3 mins read
Japan Economics Update Incoming PM unlikely to veto further rate hikes The government tried to prevent the Bank of Japan from hiking interest rates in 2000 but that attempt was unsuccessful and the government has respected the Bank’s independence ever since. Renewed... 24th September 2024 · 5 mins read
Japan Economics Update Bank of Japan will hike rates once more in December The Bank of Japan today signalled that it’s in no rush to tighten monetary policy any further and we’re pushing back our forecast for a final rate hike to 0.5% from October to December. 20th September 2024 · 3 mins read
Japan Economics Update Producer price inflation set to slow further The persistent strength in producer price inflation probably still mostly reflects the lagged influence of the surge in import costs rather than any pick-up in wage growth. If the yen keeps... 26th August 2024 · 4 mins read
Japan Economics Update Kishida’s resignation won’t affect economic outlook Prime Minister Kishida’s resignation is hardly a surprise. At this stage, it’s very difficult to predict who will succeed him and the ruling LDP will probably remain in power for the foreseeable... 14th August 2024 · 3 mins read
Japan Economics Update The financial stability risks from recent market moves Even though it’s difficult to identify what could have broken as a result of the recent rapid market moves, a stronger yen is a bigger threat to the health of Japan’s financial institutions than... 7th August 2024 · 3 mins read
Japan Economics Update FX intervention to weaken yen unlikely Japan’s government has intervened in the FX markets to weaken the yen far more often than to strengthen it. But FX interventions have become very rare over the past two decades and our sense is that... 6th August 2024 · 4 mins read
Japan Economics Update Bank of Japan will hike rates yet again in October The Bank of Japan outlined a plan for reducing its bond purchases and hiked its policy rate by 20bp today. We think it will follow up with another 20bp hike at its October meeting. 31st July 2024 · 3 mins read
Global Economics Update Latest thoughts on r* and where rates end this cycle In detailed analysis last year, we concluded that equilibrium nominal interest rates would settle at between 3% and 4% in advanced economies in the next ten years. We maintain that opinion and in fact... 30th July 2024 · 4 mins read
FX Markets Update Yen intervention: fourth time’s the charm? Japan’s intervention in support of the yen is not enough in itself to generate a sustained rebound in the yen. But with the FOMC (finally) nearing its first rate cut while the BoJ continues to tighten... 17th July 2024 · 4 mins read
FX Markets Update Revisiting the outlook for the renminbi & the yen The continued weakness of the renminbi and the yen against the US dollar despite the narrowing of interest rate differentials via-a-vis the US is something of a conundrum, but our sense remains that... 11th July 2024 · 5 mins read
Japan Economics Update More dynamism not lifting productivity yet While there are tentative signs that Japan’s economy is becoming more dynamic, this has yet to produce significant improvements in aggregate productivity. We still think that a more meaningful pick-up... 10th July 2024 · 3 mins read
Japan Economics Update Bank will hike its policy rate once more in July The Bank of Japan disappointed markets today by announcing that it will only present a detailed plan for reducing its bond purchases at its July meeting. We think it will also deliver a final policy... 14th June 2024 · 3 mins read
