Japan Economics Weekly Yen to weaken further, domestic demand picking up While the Bank of Japan was clearly in no mood today to give any ground to the bond traders testing the ceiling of Yield Curve Control, it would be even less keen to effectively shut down the JGB... 17th June 2022 · 5 mins read
Japan Economics Weekly Jump in working hours points to strong Q2 rebound The recent jump in overtime hours largely reflects severe labour shortages at hotels and restaurants rather than any surge in demand. However, with overall working hours on track for a strong rise... 10th June 2022 · 5 mins read
Japan Economics Weekly Rising prices won’t prevent solid rebound in Q2 The renewed drop in industrial production and the weakness in retail sales volumes in April has raised concerns that Japan’s recovery will continue to disappoint. However, with consumer prices rising... 3rd June 2022 · 5 mins read
Japan Economics Weekly Corporate tax shakeup, Shanghai parts shortages The government aims to lift the standard corporate tax rate while providing more generous tax breaks for capital spending. We doubt this will have a noticeable impact on business investment, not least... 27th May 2022 · 6 mins read
Japan Economics Weekly Japan to outperform as cost of living rising less sharply GDP shrank yet again in Q1 as the Omicron wave brought the recovery in consumption to a halt. However, services spending was more resilient than we had anticipated and there are good reasons to think... 20th May 2022 · 3 mins read
Japan Economics Weekly Virus fears waning, Bank of Japan plans could change We doubt that the spike in mobility during Golden Week is a harbinger of a rapid rebound in consumer spending. Mounting concerns about rising living costs and lingering virus fears among the elderly... 13th May 2022 · 7 mins read
Japan Economics Weekly 2.5% inflation, border to reopen to tourists in June Despite a huge pot of excess savings accumulated over the past couple of years, today’s 2.5% inflation print for April is likely to slow the post-Omicron recovery by spooking consumers not used to... 6th May 2022 · 5 mins read
Japan Economics Weekly BoJ still likely to tweak Yield Curve Control The Bank of Japan remained under pressure to defend its yield target this week and pledged on Thursday to keep buying an unlimited amount of bonds for as long as necessary. While 10-year JGB yields... 29th April 2022 · 3 mins read
Japan Economics Weekly Fresh yen & bond market turmoil, poor growth outlook The Bank of Japan had to step in yet again to defend its 10-year yield target this week, but it didn’t have to go to the same lengths as in late-March to keep yields in check. With yields nailed to... 22nd April 2022 · 6 mins read
Japan Economics Weekly Coal, cautious consumers, the BoJ starts to relax Japan’s ban on Russian coal is unlikely to lift domestic energy prices much given that coal import prices closely track the Newcastle spot price which have fallen sharply over the past month. A bigger... 14th April 2022 · 6 mins read
Japan Economics Weekly Large current account surplus not a thing of the past Surging import prices and depressed services exports have shrunk down Japan’s current account surplus to near zero over the past year. However, we expect a large surplus to return over the next couple... 8th April 2022 · 5 mins read
Japan Economics Weekly Investor rebellions getting harder for BoJ to put down The Bank of Japan had to go to unprecedented lengths to push 10-year yields back down into its ±0.25% tolerance band this week. If this week’s rate of JGB purchases were sustained through April, the... 1st April 2022 · 5 mins read
Japan Economics Weekly Support measures won’t prevent inflation reaching 2% The government is preparing fresh support measures to lower prices of petroleum products, which will reduce the drag on household incomes and will prevent inflation from breaching 2% for now. We still... 25th March 2022 · 8 mins read
Japan Economics Weekly Supply chain disruption could take the gloss off Q2 All domestic restrictions will be removed on Monday after two-and-a-half months of quasi-states of emergency covering most of the economy. Our assumption is that Japan – as PM Kishida hopes – will now... 18th March 2022 · 4 mins read
Japan Economics Weekly Soaring energy prices will slow consumption growth In our base case, soaring energy prices and pass-through of higher energy input costs to manufactured goods will knock off 1.5%-pts from households’ disposable income. While the still high savings... 11th March 2022 · 6 mins read
Japan Economics Weekly BoJ may get less dovish, GDP to fall in Q1 PM Kishida’s two new Bank of Japan policy board nominations could push the Bank in a slightly less dovish direction, but it won’t make much difference to policy decisions over the next year. A more... 4th March 2022 · 5 mins read
