Japan Economics Update How much of a buffer do government assets provide? Japan’s government holds more financial assets than governments elsewhere. While the value of the government’s domestic asset holdings could plunge during a crisis, a large share is invested overseas... 5th February 2026 · 4 mins read
Japan Economics Update Using GPIF to stabilise JGB market not a panacea Shifting the asset allocation of Japan’s largest pension fund back towards domestic bonds could help stabilise the JGB market should yields start to surge again. However, it would come at a sizeable... 28th January 2026 · 3 mins read
Japan Economics Update Bank of Japan will lift rates to 1.75% by next year The BoJ turned more upbeat when it left policy settings unchanged today and there’s a risk that the next rate hike will come earlier than our current forecast of July. And despite the recent surge in... 23rd January 2026 · 3 mins read
Japan Economics Update How would Japan respond to a further surge in yields? Should JGB yields continue to surge, PM Takaichi may be forced to offset some of the expansionary fiscal measures announced recently with tightening elsewhere. However, those moves may not be seen as... 21st January 2026 · 4 mins read
Japan Economics Update Is PM Takaichi creating her own Liz Truss moment? Our base case remains that Japan will avoid a fiscal crisis as its public debt dynamics are more favourable than is widely understood. However, there are mounting risks that PM Takaichi will only rein... 19th January 2026 · 4 mins read
Japan Economics Update Snap elections won’t result in major fiscal loosening While the ruling LDP/Ishin No Kai coalition will probably enhance its majority in the upcoming Lower House elections, we aren’t convinced that this will herald a further major loosening of fiscal... 15th January 2026 · 4 mins read
Japan Economics Update Has Japan become a leading ICT economy? While Japanese firms seem to be investing more in information & communication technology than those in almost any other advanced economy, broader measures suggest that the country is not a leading... 6th January 2026 · 3 mins read
Japan Economics Update Bank of Japan isn’t falling behind the curve just yet We aren’t convinced that the Bank of Japan is falling behind the curve despite the recent acceleration in bank lending. Nonetheless, there are few signs that BoJ rate hikes are resulting in tighter... 5th January 2026 · 3 mins read
Japan Economics Update Government net debt set to fall below 100% of GDP Japan’s fiscal health has continued to improve. While the expansionary measures taken by PM Takaichi mean that the budget deficit won’t narrow any further next year, it will remain very low. And with... 30th December 2025 · 4 mins read
Japan Economics Update BoJ signals additional rate hikes are in the pipeline When the Bank of Japan delivered a much-anticipated 25bp hike at its meeting today, it signalled a willingness to tighten policy further. With wage-price dynamics set to remain favourable, we expect... 19th December 2025 · 3 mins read
Japan Economics Update BoJ set to hike further as business conditions strengthen The Q4 Tankan Survey struck all the right notes from the Bank of Japan’s perspective. It showed that business conditions are improving, profit margins remain elevated, and that firms are upbeat about... 15th December 2025 · 3 mins read
Asset Allocation Update Three reasons to be positive on Japan’s markets Although they’ve struggled lately, we think the yen and Japanese equities will fare well next year, and that JGBs will outperform many other developed-market bonds in common-currency terms too. 4th December 2025 · 4 mins read
Japan Economics Update Resilience of profits adds to case for tighter policy With corporate profits hitting fresh record highs, the BoJ’s concern that US tariffs will provide a major headwind to business investment and wage growth looks increasingly overdone. To be sure... 1st December 2025 · 3 mins read
Japan Economics Update Looser fiscal policy adds to case for BoJ tightening The large supplementary budget announced today includes generous energy subsidies that will push inflation below 2% early next year. However, by boosting underlying price pressures, looser fiscal... 21st November 2025 · 3 mins read
Japan Economics Update Takaichi unlikely to curb immigration much Concerns that new Prime Minister Sanae Takaichi will drastically reduce immigration inflows seem overdone. But we suspect that the increase in immigration inflows over the past decade will come to a... 19th November 2025 · 3 mins read
FX Markets Update Why is the yen still so weak? The Japanese yen continues to suffer from the wide monetary policy gap between Japan and other major economies. We think that gap will gradually narrow and the yen recover some ground over the next... 14th November 2025 · 5 mins read
