Japan Economics Weekly Oil at $70 won’t result in policy tightening We expect the price of Brent crude oil to moderate from $70 per barrel to $55 by the end of 2018. But even if global oil prices remain close to current levels, inflation in Japan would only average 1%... 19th January 2018 · 1 min read
Japan Economics Weekly How fast will the BoJ reduce its asset purchases? A reduction in the size of the BoJ’s JGB auction moved markets this week. This wasn’t policy tapering in an effort to reduce stimulus: the Bank now only buys what is needed to maintain the yield... 12th January 2018 · 1 min read
Japan Economics Weekly “Record” budget masks continued fiscal tightening While the budget for the coming fiscal year foresees record spending, expenditure will only rise marginally and revenues may climb even faster. The upshot is that the government is set to proceed with... 5th January 2018 · 1 min read
Japan Economics Weekly What could be done to lower private surpluses? Unless private sector surpluses fall, the planned increase in the sales tax in 2019 will result in weaker domestic demand. Incentives to increase investment spending or lift dividend payments would... 21st December 2017 · 1 min read
Japan Economics Weekly What to expect in 2018 We expect Japan’s GDP growth to slow next year as the economy is now operating above capacity. Price and wage pressures should strengthen somewhat but inflation will remain well below the Bank of... 15th December 2017 · 1 min read
Japan Economics Weekly Has the unemployment rate reached a floor? The jobless rate has been effectively flat since February despite continued strong growth in the economy. The economy is now close to full employment which suggests that wage growth will continue to... 8th December 2017 · 1 min read
Japan Economics Weekly Are low policy rates contractionary? Governor Kuroda has recently discussed the idea that extremely low interest rates could undermine bank profits and capital and, ultimately, lending. Evidence for this idea is lacking in Japan, where... 1st December 2017 · 1 min read
Japan Economics Weekly Will private consumption continue to disappoint? Private consumption fell last quarter for the first time since end-2015. However, solid growth in household incomes, an elevated household saving rate and upbeat consumer confidence suggest that this... 24th November 2017 · 1 min read
Japan Economics Weekly Is monetary easing doing more harm than good? Some commentators are arguing that the costs of continued loose monetary policy outweigh the benefits as house and stock prices have soared and banks’ lending margins have slumped. By contrast, we... 17th November 2017 · 1 min read
Japan Economics Weekly Why is wage growth still subdued? Wage growth is likely to pick up over coming months as the labour market remains extremely tight. But unusually low job mobility in Japan, which is linked to the widespread use of seniority wages and... 10th November 2017 · 1 min read
Japan Economics Weekly Is Japan still being hollowed out? Outward investment from Japan has soared in recent years but this doesn’t seem to have been to the detriment of domestic manufacturing. This isn’t entirely surprising: firms say their main reason for... 3rd November 2017 · 1 min read
Japan Economics Weekly How risky is overseas lending? Overseas lending by Japanese banks has risen sharply in recent years and now almost matches domestic lending. The bulk of foreign lending is financed in yen which exposes lenders to a sizeable... 27th October 2017 · 1 min read
Japan Economics Weekly How worried should we be about corporate scandals? Recent scandals underline that Japan’s corporate governance practices are still poor. Investors often pay a heavy price as shown by the bankruptcy of Takata and the slump in Kobe Steel’s stock prices... 20th October 2017 · 1 min read
Japan Economics Weekly Will exports continue to impress? Export values rose the most since 2013 in August but the recent acceleration largely reflects a pick-up in export prices that is unlikely to last. While business surveys suggest that export volumes... 13th October 2017 · 1 min read
Japan Economics Weekly Signs the recovery sputtering in Q3 Weak consumer spending data suggest that the expansion faltered in the third quarter. This might not spell the end of the economy’s extended growth spurt. But with the economy running into capacity... 6th October 2017 · 1 min read
Japan Economics Weekly Abe recommits to sales tax hike Prime Minister Abe has pitched the snap legislative election that he has called for next month as a plebiscite on fiscal policy. He is arguing that the sales tax hike scheduled for October 2019 should... 29th September 2017 · 1 min read
