Japan Economics Weekly Wage growth set to moderate as labour market cools The Bank of Japan thinks that more pronounced labour shortages at smaller firms will prompt them to eventually catch up with bigger firms by granting larger pay hikes. However, with the labour market... 5th May 2023 · 5 mins read
Japan Economics Weekly GDP to shrink across H2 External demand is holding up better than we had anticipated and we now expect a renewed rise in Q2 GDP following a modest decline in Q1. But we still expect major trading partners to enter a... 28th April 2023 · 3 mins read
Japan Economics Weekly We still expect Ueda to spring a surprise next week Press reports suggest that the Bank of Japan will predict inflation of 2% two years ahead at next week's meeting, which would suggest that the Bank is closer than ever to meeting its inflation target... 21st April 2023 · 8 mins read
Japan Economics Weekly Slowing wage growth dampens inflation hopes Governor Ueda said this week he will be watching if wage growth can be sustained at a level that will support inflation at or above target. So far, the signs aren’t encouraging. Wage growth has fallen... 14th April 2023 · 6 mins read
Japan Economics Weekly External demand weakness has further to run Firms expect the recent weakness in external demand to last another quarter at least, according to the BoJ’s latest Tankan survey. That should drag on business investment as well and cause the economy... 6th April 2023 · 5 mins read
Japan Economics Weekly Yield Curve Control still on counted time The Bank of Japan faces a dilemma as inflationary pressures are becoming increasingly broad-based at the same time as economic activity is softening. What may tilt the balance towards the ending of... 31st March 2023 · 6 mins read
Japan Economics Weekly No signs of stress in Japan’s financial markets There has so far been no sign of stress in Japan’s financial markets as a result of the banking crises in the US and the demise of Credit Suisse. Meanwhile, the government has announced another... 24th March 2023 · 7 mins read
Japan Economics Weekly Less short-term pressure on Yield Curve Control The case for abandoning Yield Curve Control (YCC) has weakened further. The recent troubles at US regional banks and Credit Suisse should further reduce already easing pressure on the 10-year JGB... 17th March 2023 · 5 mins read
Japan Economics Weekly Yield Curve Control set to end in April The Bank of Japan didn’t alter policy settings at today’s meeting. With economic activity set to disappoint the Bank’s overly optimistic forecasts and wage growth slowing again, the case for... 10th March 2023 · 6 mins read
Japan Economics Weekly Economy headed for recession We're expecting industrial production to rebound strongly in February. Even so, industrial output will still slump this quarter, pointing to a larger q/q fall in Q1 GDP than we’re forecasting. However... 3rd March 2023 · 5 mins read
Japan Economics Weekly Market pressure on Yield Curve Control intensifying Deputy Governor Amamiya’s reason for rejecting the governorship has made clear that the government wants to pivot away from the ultra-easy monetary policy of the past decade. As a result, market bets... 24th February 2023 · 7 mins read
Japan Economics Weekly Consensus is too optimistic about GDP growth The economy expanded at a slower pace in Q4 than most anticipated, and while the second consecutive fall in export volumes in January largely reflects distortions from the Lunar New Year, it’s... 17th February 2023 · 5 mins read
Japan Economics Weekly Ueda the Unknown Kazuo Ueda was present as a member of the Bank of Japan’s Policy Board at the birth of both the Zero Interest Rate Policy in 1999 and Quantitative Easing in 2001 and took the dovish side of arguments... 10th February 2023 · 8 mins read
Japan Economics Weekly Electricity rate hike to dilute government subsidies Seven of Japan's ten regional utility companies have applied to the government to raise electricity prices for households. If approved, headline inflation would still drop below the Bank of Japan’s 2%... 3rd February 2023 · 5 mins read
Japan Economics Weekly Funding tussle may scupper higher spending on babies PM Kishida’s plan to lift spending on childcare would take the total outlay to the highest in the OECD. However, this likely won’t have much of an impact on the stubborn decline in fertility. After... 27th January 2023 · 7 mins read
Japan Economics Weekly 10-year yield ceiling will be tested again soon 10-year JGB yields have traded well within the 50bp tolerance band since the BoJ maintained its policy settings on Wednesday. Even so, we still expect the Bank to jettison Yield Curve Control in April... 20th January 2023 · 4 mins read
