Japan Economics Update When will energy inflation peak? We expect energy inflation to peak next quarter and then drop back, providing another challenge to the Bank of Japan’s efforts to reach a 2% inflation target. 31st May 2017 · 1 min read
Japan Economics Update Much greater capacity shortages needed to lift inflation Japan is on the longest streak of growth in more than a decade. But the lesson of the last growth spurt is that capacity shortages would have to intensify much further to generate major price... 23rd May 2017 · 1 min read
Japan Economics Update Monetary Indicators Monitor (Apr.) Credit growth is the strongest it has been in years but continues to fall short of growth in bank deposits. Meanwhile, the volume of external lending dipped slightly in Q4 but remains close to a... 16th May 2017 · 1 min read
Japan Economics Update Will the BoJ again follow the Fed and the ECB? There is less evidence of spare capacity in Japan’s economy than in the euro-zone which might suggest that the Bank of Japan is likely to hike rates before the ECB. However, the Bank has pledged to... 8th May 2017 · 1 min read
Japan Economics Update Will the primary budget be in surplus in 2020? Japan’s budget deficit has fallen sharply in recent years but improvements are now likely to slow, with the result that the government will struggle to achieve its target of a primary budget surplus... 2nd May 2017 · 1 min read
Japan Economics Update Bank of Japan remains too upbeat about inflation The BoJ upgraded its assessment of the economy at today’s meeting but lowered its inflation forecast for the current fiscal year. We think that the Bank remains too optimistic about inflation and... 27th April 2017 · 1 min read
Japan Economics Update Will Japan and the US sign a free trade agreement? High-level discussions with the US today have revived talk in Japan of a bilateral trade deal that could in principle generate sizeable productivity gains for Japan and make up for the US abandoning... 18th April 2017 · 1 min read
Japan Economics Update Monetary Indicators Monitor (Mar.) Bank lending is rising at the fastest pace since 2009, led by non-manufacturing firms. A combination of record-low bank lending rates and extremely loose bank lending attitudes has fuelled the credit... 17th April 2017 · 1 min read
Japan Economics Update Does QQE expose the Bank of Japan to large losses? A sharp rise in interest rates could result in large losses for the Bank of Japan if it were ever to sell its huge stock of government bonds. But the Bank is keeping a lid on bond yields and will... 11th April 2017 · 1 min read
Japan Economics Update Services set to pull inflation higher A recent acceleration in producer prices of services combined with more upbeat survey evidence suggest that the prices that consumers pay for services will soon start picking up again. However, there... 30th March 2017 · 1 min read
Japan Economics Update Departure of BoJ hawks suggests policy will remain loose The impending exit of two hawks from the Bank of Japan’s Policy Board suggests that calls for the Bank to scale back policy support will diminish. The Bank is likely to reduce the volume of its asset... 21st March 2017 · 1 min read
Japan Economics Update Monetary Indicators Monitor (Feb.) Aggregate private sector debt rose the most on record in Q4 on the back of plunging funding costs. While household and corporate debt are rising again relative to output, the level of indebtedness... 20th March 2017 · 1 min read
Japan Economics Update Bank of Japan unlikely to tighten anytime soon The Bank of Japan left policy settings unchanged today as widely anticipated and Governor Kuroda remained cautious about the prospect of hitting the inflation target. While the consensus is... 16th March 2017 · 1 min read
Japan Economics Update Tokyo Olympics unlikely to provide major boost to economy Public construction activity for the 2020 Olympic Games should pick up next year, providing a boost to growth. However, the impact on aggregate economic activity will be modest. 7th March 2017 · 1 min read
Japan Economics Update More still needed to lower public debt ratio The surge in nominal GDP since the launch of Abenomics reflects a number of one-off factors whose impact has started to fade. While a smaller budget deficit should keep the ratio of public debt to GDP... 22nd February 2017 · 1 min read
Japan Economics Update Monetary Indicators Monitor (Jan.) Despite record-low bank lending rates and extraordinarily loose credit conditions, growth in bank lending has not picked up since the launch of Quantitative and Qualitative Easing. One consequence is... 15th February 2017 · 1 min read
