Filtered by Subscriptions: Japan Economics Use setting Japan Economics
Today’s capital spending figures suggest that business investment was stronger last quarter than initially reported. The upshot is that next week’s revised Q1 GDP figures could show a 0.5% q/q increase instead of the preliminary estimate of +0.4% q/q. … …
1st June 2016
Small business confidence dropped back in May and suggests that the economic recovery remains anaemic. … Small Business Confidence …
31st May 2016
Today’s figures on industrial production and household spending suggest that Japan's economy continued to expand at a solid pace in the second quarter. … Industrial Production, Household Spending & Unemployment …
The stagnation in retail sales values in April suggests that private consumption will slow this quarter. … Retail Sales (Apr.) …
30th May 2016
A decision on whether to go ahead with the sales tax hike scheduled for next April will be announced in coming weeks. If the tax rise is postponed, GDP growth next year would be considerably stronger than is likely on current projections. Given the …
27th May 2016
According to our estimates, the Bank of Japan’s preferred inflation gauge slowed in April. Lingering slack and falling import prices suggest that price pressures will continue to moderate. … Consumer Prices …
Claims that the launch of negative interest rates has caused a flight to cash are exaggerated. However, there are clear signs that negative rates have lowered borrowing costs for Japan’s private sector. … Monetary Indicators Monitor …
25th May 2016
The fifth straight drop in the manufacturing PMI in May suggests that economic momentum slowed sharply in the second quarter. … Manufacturing PMI points to sharp slowdown in …
24th May 2016
Export values continued to fall sharply in April, and the further strengthening of the exchange rate suggests that the drag from falling export prices should persist for now. … External Trade …
23rd May 2016
Population ageing has weighed on the average employee’s disposable income as social security contributions have risen by nearly 50% over the past fifteen years, and will continue rising in future. Still, with the elderly population growing fast, average …
20th May 2016
On its own, the rebound in machinery orders in March bodes well for capital spending in the second quarter. However, the weakness in capital goods shipments is disconcerting. … Machinery Orders …
19th May 2016
Japan’s economy performed better than expected in Q1, reducing the odds that the government will postpone the sales tax hike currently scheduled for next April. But the Bank of Japan clearly has more work to do to reach its 2% inflation target. … GDP (Q1 …
18th May 2016
We don’t share concerns that the Bank of Japan will soon run into trouble acquiring the ¥80 trillion worth of Japanese Government Bonds it has pledged to buy every year. Admittedly, insurance companies have yet to reduce their bloated JGB holdings. But …
13th May 2016
If we are right in assuming that the Kyushu earthquake dampened sentiment in April, an improvement in coming months seems likely. … Consumer Confidence …
9th May 2016
Wage growth rose sharply in March, but only because of strong bonus payments. Growth in base pay weakened, and the ongoing spring wage negotiations suggest that the tight labour market is not about to create sustained cost pressures. … Labour Cash …
The proposed tax on corporate cash holdings may shift firms’ behaviour somewhat but is not as groundbreaking as it sounds. The government already provides tax incentives to encourage investment spending and pay hikes. A more promising option would be …
6th May 2016
The Bank of Japan’s decision to forego additional stimulus at its April meeting was a major disappointment to markets. The yen climbed to fresh highs against the dollar, while the Nikkei slumped. The rise in the currency will only add to downward pressure …
5th May 2016
The new measure of consumer spending developed by the Bank of Japan does not appear to be an improvement on the Cabinet Office’s “synthetic consumption index”. In any case, both measures show that consumer spending has remained sluggish at the start of …
4th May 2016
We now expect Japan’s economy to expand by only 0.5% this year – and that is on the assumption that the government presses ahead with next year’s sales tax hike. If it does, households will bring some spending forward into 2016 to beat the price rises. If …
29th April 2016
The Bank of Japan’s decision to forgo additional easing today came as a major disappointment to markets and resulted in a sharp appreciation of the yen. Amid sluggish growth and moderating price pressures, we still think that more monetary stimulus will …
28th April 2016
While consumer spending and industrial production rebounded in March, the outlook for the second quarter is mixed. With price pressures moderating, we retain our forecast that the Bank of Japan will announce more easing later today. … Industrial …
The fall in small business confidence in April reflects seasonal patterns. Still, the survey suggests that economic activity remains sluggish. … Small Business Confidence …
27th April 2016
We believe that public spending financed permanently by central bank transfers would be a viable option to boost demand and lift price pressures. However, until the existing policy measures are exhausted, which will take a few more years, we consider the …
26th April 2016
Headwinds to the Bank of Japan’s efforts to lift inflation have intensified in recent weeks. We expect the Bank to ease more at the upcoming meeting, most probably by increasing asset purchases and cutting interest rates. … Bank to announce more easing …
25th April 2016
The recent strengthening of the yen will lower prices of imported goods and provide some support to flagging private consumption. However, lower import prices provide a further headwind to the Bank of Japan’s efforts to lift inflation. What’s more, the …
22nd April 2016
The fourth straight drop in the manufacturing PMI in April suggests that the continued strengthening of the yen and the disruptions caused by the Kyushu earthquakes are taking their toll on activity in the sector. … Flash Manufacturing PMI …
The slump in export values is weighing on firms’ revenues and may undermine their willingness to invest and lift wages. … External trade …
20th April 2016
While the earthquake that hit Kyushu Island during the weekend is a human tragedy, we doubt that it will have a severe impact on Japan’s economy. The scale of damage does not appear huge and production shutdowns by major manufacturers should be reversed …
18th April 2016
If the government presses ahead with the sales tax hike next year, the chances of hitting 2% inflation on a sustainable basis anytime soon are very slim. Even if the tax hike is postponed, our best guess is that it will take at least three years before …
15th April 2016
If the end-game for Japan’s public debt problem is direct financing of the budget deficit by the Bank of Japan, this could be a step towards a solution rather than the disaster that many assume. Inflation would be likely to rise, which is exactly what is …
14th April 2016
While corporate debt has been broadly stable relative to output in recent years, firms have never been in a better position to service their debt as interest rates have collapsed and profits have surged. … Monetary Indicators Monitor …
We do not share the view that monetary policy has become impotent. However, scope to step up monetary stimulus much beyond current levels is small. The Bank of Japan’s efforts to boost growth and lift price pressures are therefore likely to require …
13th April 2016
Three years after the launch of Quantitative and Qualitative Easing, the Bank of Japan’s efforts to stoke price pressures are failing. Business confidence has fallen to a three-year low while the appreciation of the yen has magnified the slump in import …
12th April 2016
The surge in iron and steel orders which pushed up machinery orders in January reversed in February but orders remain consistent with a renewed rise in business investment last quarter. … Machinery Orders …
11th April 2016
The government has tried to talk down the yen down over last week as the currency has climbed to fresh highs against the dollar. While we still consider intervention in the currency markets unlikely, the moves put further pressure on the Bank of Japan to …
8th April 2016
The rebound in the Economy Watchers Survey last month is far less positive than it looks. Allowing for seasonal variations, “current conditions” were the weakest since 2014’s sales tax hike. … Economy Watchers Survey …
The rebound in consumer confidence in March may prove short-lived as stock markets sold off again at the start of April. … Consumer Confidence …
The current account surplus rebounded in February, but we expect the energy import bill to rise which should result in a narrower surplus in coming months. … Current Account …
We expect Tokyo’s economy to outperform the rest of Japan in coming years, largely because demographic prospects in the capital are brighter. One consequence is that house prices in Tokyo should continue to rise faster than elsewhere. … Is the grass …
7th April 2016
The proposed distribution of shopping vouchers to households would only boost spending temporarily. In order to lower precautionary savings and provide a longer-lasting impetus to private consumption, policymakers should instead postpone the sales tax …
6th April 2016
While wage growth rebounded in February, the ongoing spring wage negotiations will likely result in smaller base pay hikes than last year. The upshot is that the outlook for labour income remains bleak. … Labour Cash Earnings …
5th April 2016
Low inflation and the continued expansion in part-time employment are one reason why wage growth is not picking up. However, there are also some structural factors at play. Japan’s lifetime employment model and the diminished clout of trade unions lower …
1st April 2016
The pronounced drop in the headline index of today’s Tankan survey underlines that the recent strengthening of the yen has damaged business confidence and suggests that the Bank of Japan will announce more easing later this month. … Tankan …
The slump in industrial output in February suggests that manufacturing activity will contract this quarter and implies downside risks to our forecast of a 0.2% q/q rebound in GDP in Q1. … Industrial Production …
30th March 2016
The rebound in small business confidence in March is due to seasonal patterns. In fact, the survey points to falling industrial output. … Small Business Confidence …
29th March 2016
While the labour market remains tight, consumer spending may only have rebounded marginally this quarter. … Unemployment, Household Spending & Retail Sales …
The Bank of Japan’s new favourite inflation gauge remained below its December peak in February. Sizeable spare capacity and falling import prices suggest that price pressures will moderate further. … Underlying inflation to moderate …
28th March 2016
The conventional wisdom is that the collapse in bond yields since the launch of QQE is undermining bank profits. In reality, though they reached a fresh high last year. Unfortunately this is bad news for the Bank of Japan, as the resilience of bank …
24th March 2016
The renewed fall in the manufacturing PMI to a three year-low in March underlines that the recent strengthening of the exchange rate is dampening activity in the sector. … Flash Manufacturing PMI …
22nd March 2016
The early results of the Shunto spring wage negotiations have been disappointing to policymakers hoping to see faster wage gains. The major carmakers and electronics firms have agreed smaller base pay hikes than they did a year ago. If other firms follow …
18th March 2016
