Japan Economics Weekly Yen still set to fall further as monetary policies diverge Japan’s economy probably shrank yet again last quarter, resulting in a renewed increase in spare capacity. With the outlook for growth and inflation both worse than policymakers predict, we continue... 30th October 2015 · 1 min read
Japan Economics Weekly Exemptions won’t dampen blow from sales tax hike The government intends to mitigate the impact of the sales tax hike scheduled for April 2017 by lowering the tax rate on food and other daily necessities. However, the benefits even for low-income... 23rd October 2015 · 1 min read
Japan Economics Weekly Capital spending to remain sluggish A range of indicators suggest that business investment dropped for the second straight quarter in Q3. However, the Bank of Japan is continuing to argue that the outlook for capital expenditure is... 16th October 2015 · 1 min read
Japan Economics Weekly Lower price expectations add to case for more easing Expectations of future price rises among Japanese households and firms have been undermined by the energy-related collapse in observed inflation. Even though the drag from cheaper energy will fade in... 9th October 2015 · 1 min read
Japan Economics Weekly Would negative interest rates hamper QQE? We do not share BoJ Board member Shirai’s view that the introduction of negative rates would hamper the ability of the Bank to purchase JGBs. However, Ms Shirai’s views have been close to those of the... 2nd October 2015 · 1 min read
Japan Economics Weekly Clampdown on tertiary education is worrisome An onslaught on humanities and social sciences by the Ministry of Education threatens to undermine the competitiveness of Japan’s economy. Encouragingly, the country’s leading universities have... 25th September 2015 · 1 min read
Japan Economics Weekly Is weak external demand holding back the recovery? The Bank of Japan has blamed weak exports for the recent sluggish performance of the economy, but domestic demand has hardly been vigorous either. We believe the Bank is pointing the finger at... 18th September 2015 · 1 min read
Japan Economics Weekly Consumer spending to remain sluggish With poorly paid non-regular jobs accounting for the bulk of new job creation and the tight labour market not providing the hoped-for boost to wages, we think that the near-term outlook for consumer... 11th September 2015 · 1 min read
Japan Economics Weekly How useful are the BoJ’s alternative inflation gauges? With falls in headline inflation raising questions about its policy approach, the Bank of Japan has recently been highlighting alternative price gauges that show inflation to be rising. These... 4th September 2015 · 1 min read
Japan Economics Weekly Equity sell-off to reverse soon The recent equity market sell-off in Japan, which originated in China, does not reflect a major deterioration in the economic outlook for Japan. In fact, there are signs that Chinese demand for... 28th August 2015 · 1 min read
Japan Economics Weekly GPIF's higher returns won’t solve social security woes The Government Pension Investment Fund achieved a record profit last year, and the value of its assets climbed to a fresh high. However, the fund won’t earn double-digit returns on a sustained basis... 21st August 2015 · 1 min read
Japan Economics Weekly The government giveth, the BoJ giveth straight back The Bank of Japan will soon become the largest holder of Japanese government bonds. Since the income it earns on those securities is mostly transferred back to the government, the Bank’s JGB purchases... 14th August 2015 · 1 min read
Japan Economics Weekly The “Third Arrow” has slowed to a crawl Prime Minister Abe returned to power in late 2012 with the intention to lift average real GDP growth to 2% by implementing policies at “unprecedented speed”. Despite some success incertain areas... 7th August 2015 · 1 min read
Japan Economics Weekly Economy to recover only slowly from Q2 slump The June activity and spending data cemented our view that Japan’s economy shrank last quarter.While business surveys point to a rebound in Q3, growth will likely remain too slow to create strong... 31st July 2015 · 1 min read
Japan Economics Weekly Net government debt to remain stable We expect the ratio of net government debt to GDP to remain broadly unchanged in coming years, as a weaker yen and a buoyant stock market should lift the value of public assets by enough to offset... 24th July 2015 · 1 min read
Japan Economics Weekly Growth to remain sluggish over medium term We expect Japan’s GDP growth rate to average under 1% over coming years, too slow for the Bank of Japan to take its foot off the monetary pedal any time soon. For financial markets, this is likely to... 17th July 2015 · 1 min read
