Japan Economics Update Monetary Indicators Monitor (Apr.) Claims that the launch of negative interest rates has caused a flight to cash are exaggerated. However, there are clear signs that negative rates have lowered borrowing costs for Japan’s private... 25th May 2016 · 1 min read
Japan Economics Update Manufacturing PMI points to sharp slowdown in Q2 The fifth straight drop in the manufacturing PMI in May suggests that economic momentum slowed sharply in the second quarter. 24th May 2016 · 1 min read
Japan Economics Update Is consumer spending stronger than we thought? The new measure of consumer spending developed by the Bank of Japan does not appear to be an improvement on the Cabinet Office’s “synthetic consumption index”. In any case, both measures show that... 4th May 2016 · 1 min read
Japan Economics Update Bank of Japan will be forced to ease more before long The Bank of Japan’s decision to forgo additional easing today came as a major disappointment to markets and resulted in a sharp appreciation of the yen. Amid sluggish growth and moderating price... 28th April 2016 · 1 min read
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
