Japan Economics Update Is helicopter money an option in Japan? We believe that public spending financed permanently by central bank transfers would be a viable option to boost demand and lift price pressures. However, until the existing policy measures are... 26th April 2016 · 1 min read
Japan Economics Update Earthquake unlikely to have major economic impact While the earthquake that hit Kyushu Island during the weekend is a human tragedy, we doubt that it will have a severe impact on Japan’s economy. The scale of damage does not appear huge and... 18th April 2016 · 1 min read
Japan Economics Update What is the end-game for Japan’s debt problem? If the end-game for Japan’s public debt problem is direct financing of the budget deficit by the Bank of Japan, this could be a step towards a solution rather than the disaster that many assume... 14th April 2016 · 1 min read
Japan Economics Update Monetary Indicators Monitor (Mar.) While corporate debt has been broadly stable relative to output in recent years, firms have never been in a better position to service their debt as interest rates have collapsed and profits have... 14th April 2016 · 1 min read
Japan Economics Update Has monetary policy lost its power? We do not share the view that monetary policy has become impotent. However, scope to step up monetary stimulus much beyond current levels is small. The Bank of Japan’s efforts to boost growth and lift... 13th April 2016 · 1 min read
Japan Economics Update Will shopping vouchers boost consumption? The proposed distribution of shopping vouchers to households would only boost spending temporarily. In order to lower precautionary savings and provide a longer-lasting impetus to private consumption... 6th April 2016 · 1 min read
Japan Economics Update Underlying inflation to moderate further The Bank of Japan’s new favourite inflation gauge remained below its December peak in February. Sizeable spare capacity and falling import prices suggest that price pressures will moderate further. 28th March 2016 · 1 min read
Japan Economics Update Delay in sales tax hike becoming more likely PM Abe has invited outspoken opponents of tighter fiscal policy to a panel debating whether or not to raise the sales tax next year, which suggests that the chances of a renewed postponement are... 16th March 2016 · 1 min read
Japan Economics Update Dovish Bank of Japan to announce more easing next month The Bank of Japan did not announce additional monetary easing at today’s meeting, but dropped some strong hints that it believes more stimulus will eventually be needed. We now expect policymakers to... 15th March 2016 · 1 min read
Japan Economics Update Monetary Indicators Monitor (Feb.) Corporate bond yields have collapsed since the Bank of Japan adopted negative interest rates. However, with bonds only accounting for a quarter of corporate debt, bank lending rates would also have to... 10th March 2016 · 1 min read
Japan Economics Update Nominal GDP growth set to slow again The surge in nominal GDP last year reflects temporary factors and should not be taken as a sign of success for Abenomics. In fact, nominal GDP growth is set to slow this year. 29th February 2016 · 1 min read
Japan Economics Update Will negative JGB yields result in an operating loss for the BoJ? JGB yields would have to fall by another 40bp to wipe out the Bank of Japan’s profits, and they would have to remain that negative for many years to erode its capital base. However, that would be a... 23rd February 2016 · 1 min read
Japan Economics Update Outlook for consumer spending remains weak We don’t expect the recent slump in the stock market to create a major drag on consumer spending. But with wage growth unlikely to accelerate, we think that private consumption will be weaker this... 19th February 2016 · 1 min read
Japan Economics Update Monetary Indicators Monitor (Jan.) While domestic lending continues to expand at a steady pace, the bigger story is the continued expansion in cross-border lending. Even though banks have curtailed their exposure to China, overall... 16th February 2016 · 1 min read
Japan Economics Update Will a stronger yen derail the BoJ’s efforts to hit 2% inflation? The recent appreciation of the yen, even if sustained for longer, should not have a major impact on external demand nor consumer prices. However, it will lower corporate profits and could reduce firms... 15th February 2016 · 1 min read
Japan Economics Update Will negative rates hamper the BOJ’s ability to buy JGBs? With longer-term interest rates falling alongside short-term rates, the introduction of negative rates will not hamper the Bank of Japan’s ability to purchase large amounts of government bonds. Nor... 3rd February 2016 · 1 min read
