Japan Economics Update Wage growth set to remain contained The recent strength in Japan’s wage data largely reflects a compositional shift, as more lower-paid workers have dropped out of the workforce over the past year. With vacancies still far below pre... 10th May 2021 · 3 mins read
Japan Economics Update Can banks withstand rising corporate defaults? The pandemic has lifted the ratio of corporate debt to GDP to the highest level since the late-1990s and the Bank of Japan now fears that defaults could rise sharply in struggling sectors. However... 29th April 2021 · 3 mins read
Japan Economics Update Kuroda’s term to end with inflation still below target The Bank of Japan kept policy settings unchanged today as widely anticipated. And by predicting inflation well below its 2% target all the way to FY2023, the Bank signalled that Governor Kuroda won’t... 27th April 2021 · 3 mins read
Japan Economics Update Fourth virus wave to slow recovery The fourth virus wave has so far been largely concentrated in Osaka and a state of emergency declaration in that prefecture alone would not prevent national output from rebounding in Q2. However, as... 19th April 2021 · 3 mins read
Japan Economics Update BoJ rearranges furniture to prepare for prolonged hold The Bank of Japan’s policy review today contained various nudges to policy levers but ultimately marked neither a tightening nor an easing of policy. Governor Kuroda was keen to emphasise in the press... 19th March 2021 · 3 mins read
Japan Economics Update Why Japan isn’t suffering supply disruptions Japan’s manufacturers are not suffering from the severe supply shortages that are plaguing firms in other advanced economies. This reflects lessons learned from the Great East Japan Earthquake and a... 10th March 2021 · 2 mins read
Japan Economics Update Fiscal support not quite as large as most think The fiscal support that Japan’s government provided during the pandemic wasn’t as large as headline figures suggest. Accordingly, the withdrawal of stimulus will be a smaller headwind to the economy... 2nd March 2021 · 3 mins read
Japan Economics Update Wider tolerance band wouldn’t signal tighter policy The Bank of Japan is likely to widen the tolerance band around its 10-year yield target next month. The last time this happened, many saw it – wrongly in our view – as a form of policy tightening. It... 23rd February 2021 · 3 mins read
Japan Economics Update The risks to our upbeat vaccine assumptions While Japan’s vaccine rollout won’t begin until late February, we are assuming that inoculations proceed rapidly enough for most of the vulnerable to be protected by the middle of the year with the... 2nd February 2021 · 6 mins read
Japan Economics Update Review unlikely to herald major policy changes Despite the headwind from the third virus wave, the Bank of Japan revised up its growth forecasts for the next couple of fiscal years. And while Governor Kuroda didn’t provide much insight into what... 21st January 2021 · 4 mins read
Japan Economics Update Output may keep rising despite state of emergency It looks likely that a state of emergency will be declared in the Greater Tokyo Area over the coming weeks which could involve the closure of shops, schools and restaurants. While that will result in... 4th January 2021 · 3 mins read
Japan Economics Update Withdrawal of fiscal support won’t derail recovery On its own, the draft budget for the fiscal year that starts in April points to a sharp tightening in fiscal policy. However, there are several reasons why the headline budget figures are overstating... 21st December 2020 · 3 mins read
Japan Economics Update Review probably won’t result in major policy changes The Bank of Japan’s decision today to extend its emergency loan facility by six months didn’t come as a surprise. The announcement that the Bank would soon conduct an assessment of its easing strategy... 18th December 2020 · 3 mins read
Japan Economics Update Third round of stimulus sets stage for strong rebound The third supplementary budget announced by PM Suga today raises fresh government spending in response to the pandemic to around 12% of GDP. That lifts Japan back up the global fiscal support rankings... 8th December 2020 · 3 mins read
Japan Economics Update Business investment already turning a corner The surge in capital goods shipments in October and solid profit data for Q3 suggest that capital spending is ending the year on a strong note. We’re revising up our forecast for business investment... 7th December 2020 · 3 mins read
Japan Economics Update Bank of Japan acknowledges costs of negative rates The Bank of Japan’s new special deposit facility won’t lift the profitability of struggling banks meaningfully, nor should it result in a rise in money market rates. However, it is another sign that... 30th November 2020 · 3 mins read
