Japan Economics Weekly Weaker yen starts to restrain import volumes Almost three years after the yen started its steep fall, there is still little evidence of any boost to export volumes. Instead, a weaker exchange rate has mostly improved the non-energy trade balance... 10th July 2015 · 1 min read
Japan Economics Weekly Would Grexit matter for Japan? With trade and direct financial ties between Japan and Europe relatively weak, the main channel through which Greek exit from the euro-zone could affect Japan is a pick-up in safe haven flows. If that... 3rd July 2015 · 1 min read
Japan Economics Weekly How fast do wages have to rise to reach 2% inflation? We estimate that wages would have to rise by 3% or more to reach the Bank of Japan’s 2% inflation target. Even if the unemployment rate drops further in the months ahead, we think that wage growth may... 26th June 2015 · 1 min read
Japan Economics Weekly Deflationary threat from cheaper oil far from over Only a small part of the recent plunge in energy prices has been passed on to consumers in Japan, in large part because firms rather than households are the biggest users of oil and they have not... 19th June 2015 · 1 min read
Japan Economics Weekly Is Abenomics working after all? The jump in output in Q1 and, over a longer period, rapid growth in the number of people available for work are signs that Abenomics is starting to have an impact. However, the economy likely slowed... 12th June 2015 · 1 min read
Japan Economics Weekly What to make of the renewed weakening of the yen? We remain convinced that a weaker yen is needed to boost demand, lift inflation and put the public finances on a sustainable path. As long as the exchange rate continues to weaken gradually rather... 5th June 2015 · 1 min read
Japan Economics Weekly Who benefits from the recovery in national income? Households have benefitted less from the plunge in energy prices and the surge in overseas investment income than other sectors. With wage growth set to remain subdued, we think that consumer spending... 29th May 2015 · 1 min read
Japan Economics Weekly Boost from net exports to fade next year There are increasing signs that the weak yen is finally curbing demand for imported goods, but the trade deficit should nonetheless widen again next year as consumers bring forward spending ahead of... 22nd May 2015 · 1 min read
Japan Economics Weekly When will housing rents stop falling? Because of its outsized weight in the consumer price basket, housing rent has a significant impact on inflation in Japan. Unfortunately for the Bank of Japan, it seems likely that rent will continue... 15th May 2015 · 1 min read
Japan Economics Weekly Bank of Japan will have to ease more before too long The Bank of Japan’s decision not to step up the pace of easing at the end of April has prompted us to pare back our expectations for yen depreciation in the near term. But we still think that... 8th May 2015 · 1 min read
Japan Economics Weekly Should the BoJ introduce negative interest rates? Negative rates on central bank reserves could be one way to reduce bank lending rates further in Japan. This idea has received some attention in the media recently, but it does not appear to be under... 1st May 2015 · 1 min read
Japan Economics Weekly Has QQE really lifted inflation expectations? In contrast to the Bank of Japan, we are far from convinced that QQE has lifted inflation expectations. In fact, wage and price setting behaviour have changed little since the programme was launched... 24th April 2015 · 1 min read
Japan Economics Weekly Will the use of JGBs as collateral hamper QQE? Around 20% of all Japanese Government Bonds (JGBs) are currently used as collateral with the Bank of Japan or in private repurchase agreements. However, there are various ways to ensure that a... 17th April 2015 · 1 min read
Japan Economics Weekly Re-shoring not as beneficial as widely thought Despite press reports that suggest the opposite, there is no evidence that Japanese firms have returned manufacturing production to their homeland on a large scale. Even if they did, this would be no... 10th April 2015 · 1 min read
Japan Economics Weekly Did Chinese New Year distort Japan’s activity data? The unusually late timing of Chinese New Year may have distorted Japan’s recent activity data by causing a surge in output and exports in January followed by a slump in February. However, firms... 3rd April 2015 · 1 min read
Japan Economics Weekly Why are firms borrowing more? Despite exceptionally strong corporate profits and falling investment, corporate debt increased by the most since 2008 last quarter. With interest costs at record lows, firms seem to be borrowing to... 27th March 2015 · 1 min read
