Japan Economics Weekly Inflation overshoot will trump BoJ’s tariff concerns The new US auto tariffs and the looming reciprocal tariffs due next week pose clear downside risks to Japan’s economic outlook. But policymakers at the Bank of Japan have signalled that those tariffs... 28th March 2025 · 6 mins read
Japan Economics Weekly Japan Weekly: Tariff front-running will be followed by export slump The recent strength in export volumes seems to reflect efforts to front-run US tariffs. While that is providing a boost to activity now, it will only magnify the hit to exports once those tariffs are... 21st March 2025 · 4 mins read
Japan Economics Weekly Japan Weekly: Ueda cautious despite strongest pay hikes in 34 years Even though this year’s spring wage negotiations resulted in the largest pay hike since 1991, Bank of Japan Governor Ueda this week sounded worried about developments overseas. That creates risk to... 14th March 2025 · 5 mins read
Japan Economics Weekly Japan Weekly: Shunto bonanza points to more rate hikes Japan’s trade unions are requesting an even larger pay hike in this year’s spring wage negotiations than they did a year ago and we expect employers to comply. With inflation already on track to... 7th March 2025 · 5 mins read
Japan Economics Weekly Japan Weekly: Demographic crisis worsening as births keep falling Japan is now recording more than twice as many deaths as births, with that ratio only surpassed in war-ravaged Ukraine and celibate Holy See. While the number of employed people nonetheless hit a... 28th February 2025 · 4 mins read
Japan Economics Weekly Japan Weekly: Strong inflation underpinned by soaring labour costs With the economy growing well above trend and inflation double the Bank of Japan's target, the financial markets are starting to come around to our view that the Bank will lift its policy rate to 1%... 21st February 2025 · 4 mins read
Japan Economics Weekly Japan Weekly: Banks starting to benefit from higher interest rates The 10-year JGB yield rose to a 14-year high this week and we think it will reach 1.75% by the end of the year as the Bank of Japan tightens policy more rapidly than most anticipate. Banks were... 14th February 2025 · 6 mins read
Japan Economics Weekly Bank of Japan will hike rates again soon While the surge in bonus payments in December in principle bodes well for the upcoming spring wage negotiations as it signals strong corporate profitability, it's worth highlighting that growth in... 7th February 2025 · 4 mins read
Japan Economics Weekly Structural labour shortages point to more rate hikes The Tokyo CPI suggests that the Bank of Japan’s Board will need to revise up their inflation forecasts yet again at the May meeting. And with the expansion in employment running on fumes as the... 31st January 2025 · 5 mins read
Japan Economics Weekly Japan Weekly: Bank of Japan will lift rates above 1% next year The Bank of Japan signaled further tightening when it lifted its policy rate to 0.5% this week and we expect rates to climb further than most expect over the coming year. Meanwhile, the budget deficit... 24th January 2025 · 5 mins read
Japan Economics Weekly Japan Weekly: January rate hike now looking likely A flurry of communication by the Bank of Japan this week suggests that a rate hike at next week's meeting is very likely. And whereas the financial markets foresee just one additional 25bp rate hike... 17th January 2025 · 5 mins read
Japan Economics Weekly Japan Weekly: Case for tighter policy remains intact Wage growth continues to accelerate and all signs point to this year's Shunto delivering another strong pay hike. However, the Bank of Japan wants to see more clarity on US economic policy and we... 10th January 2025 · 5 mins read
Japan Economics Weekly Japan Weekly: BoJ still signalling room – and desire – to hike further Governor Ueda delivered two messages in the press conference after yesterday’s policy meeting: first, the Bank of Japan thinks that policy normalisation is still on track and it intends to raise rates... 20th December 2024 · 7 mins read
Japan Economics Weekly Japan Weekly: Tankan adds to case for December hike We’re in a minority of analysts expecting the Bank of Japan to hike rates next week. But the ongoing labour shortages and strength of output price pressures flagged in today’s Tankan have only made a... 13th December 2024 · 5 mins read
Japan Economics Weekly Japan: December rate hike still looking more likely than not Conflicting messages by the Bank of Japan have once again left the outcome of the Bank's December meeting wide open, but on balance we're sticking to our forecast of another rate hike in a couple of... 6th December 2024 · 6 mins read
Japan Economics Weekly Bank of Japan will hike rates further to 1.25% by 2026 The pick-up in inflation excluding fresh food and energy in Tokyo in November points to the nationwide measure rising further above the Bank of Japan’s 2% target. With the yen set to remain weak for... 29th November 2024 · 4 mins read
