Japan Economics Weekly Economy spluttering, Korea tensions thaw The plunge in retail sales and factory output following the 1 st October sales tax hike points towards a sharp contraction in GDP this quarter. However, we think there are still reasons to believe the... 29th November 2019 · 5 mins read
Japan Economics Weekly Abe makes history, supplementary budget, 50-yr JGBs? Shinzo Abe became Japan’s longest serving Prime Minister this week but his track record on the economy is mixed. Meanwhile, the ¥10 trillion supplementary budget that the government are reportedly... 22nd November 2019 · 6 mins read
Japan Economics Weekly Impact of tax hike on consumption set to remain small Private consumption growth in Q3 was much weaker than ahead of the 1997 and 2014 sales tax hikes. While that’s partly because underlying consumer demand is subdued, the muted spending rush on durables... 15th November 2019 · 5 mins read
Japan Economics Weekly Government heeds Kuroda’s call for fiscal stimulus The Bank of Japan has urged the government to address the mounting downside risks to economic activity with additional spending and the government has confirmed it will do so. Meanwhile, the available... 8th November 2019 · 6 mins read
Japan Economics Weekly Markets expect BoJ rate cut next year, we don’t The surge in retail sales in September increases the chances of a steep slump in spending after the sales tax hike on 1 st October. And the rise in the unemployment rate in September suggests that... 1st November 2019 · 5 mins read
Japan Economics Weekly Bank of Japan to remain on hold next week We now expect the Federal Reserve to cut interest rates by another 25bp next week, which could result in a renewed strengthening of the yen and increase the pressure on the Bank of Japan to lower... 25th October 2019 · 6 mins read
Japan Economics Weekly JGB yields to rise next year despite lower BoJ buying The Bank of Japan is on course to reduce its government bond holdings next year. But the Bank is merely reacting to market conditions rather than setting the tone itself. Our view that risk aversion... 18th October 2019 · 5 mins read
Japan Economics Weekly Supermarket sweep, cash’s reign under threat The boom and bust in supermarket sales around last week’s sales tax hike has been interpreted by some as a sign the government’s countermeasures are not working. Afterall, most food is exempt from the... 11th October 2019 · 5 mins read
Japan Economics Weekly Are we any closer to a rate cut? This week brought more evidence that consumers rushed to bring forward spending ahead of the tax hike that took place on Tuesday. Meanwhile, capacity shortages are diminishing and firms are becoming... 4th October 2019 · 6 mins read
Japan Economics Weekly Kuroda targets short end, “phenomenal” trade deal The shift in the Bank of Japan’s bond purchases from long towards short maturities has helped to lift very long-term yields from their recent lows. And if US Treasury yields rise further next year... 27th September 2019 · 8 mins read
Japan Economics Weekly 10% sales tax, could BoJ change tiering system? With the 1 st October sales tax hike fast approaching, we think the government’s countermeasures will ensure consumer spending doesn’t fall off a cliff next month, as it did after the previous tax... 20th September 2019 · 4 mins read
Japan Economics Weekly Is it time to do the twist again? 10-year government bond yields have rebounded this week but are still at the lower end of the BoJ’s tolerance band. Some commentators have suggested that the Bank will cut the short-term policy rate... 13th September 2019 · 5 mins read
Japan Economics Weekly Weak consumer confidence, BoJ pre-emptive easing? The recent slump in consumer confidence underlines that consumer spending will fall sharply after October’s sales tax hike. But it doesn’t tell us much about the extent of the slowdown and the fact... 6th September 2019 · 6 mins read
Japan Economics Weekly Regional banking shake-up gathering momentum Japan’s banking regulator announced this week several measures to accelerate consolidation in the ailing regional banking sector. The changes should discourage banks from taking on too much risk... 30th August 2019 · 5 mins read
Japan Economics Weekly Subsidies for Lost Generation, rugby spending boost The planned subsidies to encourage firms to hire more regular workers may lift wage growth a bit. Meanwhile, the upcoming Rugby World Cup could provide a welcome boost to demand as it will happen... 23rd August 2019 · 6 mins read
Japan Economics Weekly What drove strong consumer spending in Q2? While many commentators have attributed the strength in Q2 consumer spending to purchases being brought forward ahead of the sales tax hike, we think it had more to do with the longer-than-usual... 16th August 2019 · 5 mins read
