Japan Economics Update Employment income to rebound in H2 Many firms have furloughed employees during the state of emergency and stopped paying wages. But with the economy now opening up again and the government’s employment subsidy scheme starting to be... 3rd June 2020 · 3 mins read
Japan Economics Update Large fiscal response should support recovery The large supplementary budget drafted by PM Abe’s Cabinet today lifts fresh government spending in response to the virus to around 8% of GDP. That should provide the platform for a strong recovery in... 27th May 2020 · 3 mins read
Japan Economics Update Massive support from BoJ should contain bankruptcies The Bank of Japan launched a new lending facility today to support bank lending to small businesses and we suspect its measures will now be sufficient to secure the financing needs of firms throughout... 22nd May 2020 · 3 mins read
Japan Economics Update Wage subsidies to temper surge in unemployment Most of the fresh spending in PM Abe’s fiscal package will not provide meaningful support to employment. But as was the case during the financial crisis, the government’s employment adjustment fund... 28th April 2020 · 3 mins read
Japan Economics Update Chances of rate cut dwindling The Bank of Japan today scaled up its measures to ease corporate and household financing strains significantly. However, the Board didn’t cut the policy rate even though all members expect a slump in... 27th April 2020 · 3 mins read
Japan Economics Update Japan’s push to reshore production won’t succeed The government is encouraging manufacturers to return production of components from their overseas subsidiaries to Japan. Given the large scale of production that is now located abroad, a major... 23rd April 2020 · 3 mins read
Japan Economics Update Banking system should withstand corona shock Regional banks in Japan will face mounting loan losses due to the virus outbreak. But as their linkages with other financial institutions are small, this won’t precipitate a financial crisis. 16th April 2020 · 2 mins read
Japan Economics Update Only modest fiscal support as lockdowns loom The government today laid the groundwork for lockdowns in prefectures that generate nearly half of Japan’s economic output. The accompanying fiscal package has some impressive headline numbers... 7th April 2020 · 3 mins read
Japan Economics Update What would a lockdown mean for Japan’s economy? Tokyo Governor Yuriko Koike is mulling a lockdown for the capital in response to a rise in coronavirus cases. Taking into account the composition of Tokyo’s economy, we estimate that a lockdown in the... 26th March 2020 · 3 mins read
Japan Economics Update Counting the cost of Olympic postponement With the global coronavirus pandemic set to last for months, it now looks almost certain that this summer’s Tokyo Olympics will be postponed. The impact on the economy this year of such a move should... 24th March 2020 · 3 mins read
Japan Economics Update Bank of Japan still likely to cut interest rates The measures announced by the Bank of Japan today lack teeth and we still expect policymakers to cut the short-term policy rate over the coming weeks. 16th March 2020 · 3 mins read
Japan Economics Update Intervention won’t prevent yen from strengthening We suspect that Japan’s government won’t intervene in the foreign exchange market until the yen hits 90 against the dollar. The key point is that foreign exchange intervention probably won’t prevent... 10th March 2020 · 4 mins read
Japan Economics Update How vulnerable is Japan to supply chain disruptions? Manufacturers in Japan are on the whole less dependent on imported components than those in other major rich economies and so are less vulnerable to global supply chain disruption. But there’s a... 9th March 2020 · 2 mins read
Japan Economics Update Coronavirus will force Bank of Japan to cut rates Two developments over the past couple of days have caused us to change our thinking on the outlook for monetary policy in Japan. We now assume that the coronavirus will spread widely across most of... 3rd March 2020 · 4 mins read
