Japan Economics Update A close race for fourth place The slump in the yen has resulted in Germany overtaking Japan as the world’s 3rd largest economy at market exchange rates. We expect Japan to overtake Germany yet again in the early 2030s as the yen... 9th April 2024 · 4 mins read
Japan Economics Update Banks set to become major holders of JGBs yet again Once the Bank of Japan starts to reduce its huge holdings of Japanese Government Bonds (JGBs) in earnest, we think that commercial banks will once again become major holders of JGBs. Insurance firms... 2nd April 2024 · 2 mins read
FX Markets Update How worried should we be about the renminbi & yen? We continue to think that policymakers in China and Japan will do enough to keep their currencies from weakening much further, but the risk of a break lower in one, or both, is increasing. 27th March 2024 · 5 mins read
FX Markets Update Three key points on the yen’s latest fall In the wake of this week’s FOMC and BoJ policy announcements we are revising our forecast for the Japanese yen. While we still expect the Japanese yen to rebound over the course of 2024, we now... 21st March 2024 · 4 mins read
Japan Economics Update Ultra-loose policy ends but tightening cycle unlikely The Bank of Japan today called time on more than a decade of ultra-loose policy settings, but we don’t think it will lift its policy rate any further over the coming months. 19th March 2024 · 3 mins read
Japan Economics Update Better corporate governance still not paying off The decline in listed firms’ profit margins over the last couple of years despite the tailwind from a weaker yen suggests that improved corporate governance isn’t changing corporate behaviour. While... 4th March 2024 · 2 mins read
Japan Economics Update Trump tariffs a net negative for Japan in the long run We estimate that in the near-term, the drag on Japan’s exports resulting from of a universal 10% US import tariff could be nearly offset by Japan gaining market share at the expense of China in... 26th February 2024 · 4 mins read
Japan Economics Update BoJ has succeeded in creating high-pressure economy The Bank of Japan has succeeded in creating tight labour market conditions through ultra-loose monetary policy and is now reaping the benefits in the form of stronger wage growth. The upshot is that... 22nd February 2024 · 3 mins read
Japan Economics Update Japan isn’t de-industrialising Japan’s industrial production data don’t fully take into account the influence of falling prices and have systematically underestimated the strength of manufacturing output. The upshot is that rather... 19th February 2024 · 2 mins read
FX Markets Update Weakness in the yen looks overdone to us The rise in US bond yields has put renewed pressure on the yen, but we think further downside is limited. We still expect Treasury yields to resume their downward trend and for the yen to benefit most... 15th February 2024 · 4 mins read
Japan Economics Update Policy normalisation is in sight The Bank of Japan sounds increasingly confident that it will be able to achieve its inflation target on a sustained basis. With Mr Ueda at the post-BOJ-meeting press conference again emphasising the... 23rd January 2024 · 3 mins read
Japan Economics Update Looming manufacturing downturn another headwind Industrial output has usually fallen rather sharply whenever firms were as pessimistic about the production outlook as they are now. That’s consistent with our view that GDP growth next year will be... 28th December 2023 · 3 mins read
Japan Economics Update Negative interest rates will end in early-2024 The Bank of Japan left policy settings unchanged today as widely anticipated. And while Governor Ueda is sounding more confident that 2% inflation will be sustained, we now expect the Bank of Japan to... 19th December 2023 · 3 mins read
Japan Economics Update Negative interest rates will end in early-2024 We are resending this publication because it was incorrectly sent as a Japan Rapid Response. The Bank of Japan left policy settings unchanged today as widely anticipated. And while Governor Ueda is... 19th December 2023 · 3 mins read
Global Economics Update Key risks for 2024 In this Global Economics Update, we describe eight of the biggest risks to our economic forecasts for 2024. The unusual nature of this cycle and uncertainties surrounding the transmission of monetary... 30th November 2023 · 6 mins read
Global Markets Update BoJ normalisation points to higher JGB yields & stronger yen We think the Bank of Japan’s continued steps towards policy normalisation are consistent with somewhat higher JGB yields and a significant rebound in the yen over the coming quarters. In view of the... 2nd November 2023 · 4 mins read