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Today’s headlines from Japan have focused on the continued weakness of machinery orders in May. But we would pay more attention to the continued recovery in the more timely surveys of business confidence, notably the Economy Watchers Survey. … How …
8th July 2009
The 5.9% m/m increase in industrial production in May, which followed an identical rise in April, supports our long-held view that Japan will be among the first of the major economies to return to growth. However, a lacklustre global recovery and …
29th June 2009
There are good reasons to expect Japanese equities to prove relatively resilient even if foreign appetite fades again: the market is much less overvalued than it used to be; Japan is poised to enjoy a stronger rebound than other major developed economies; …
24th June 2009
The renewed acceleration in the pace of decline in Japanese exports in May on a year-on-year basis has raised concerns that the fledgling recovery is already faltering. However, a closer look at the data shows that export volumes rose sharply …
The Japanese economy appears to be on track for a decent recovery. The key measures of business and consumer sentiment are rebounding and the April releases brought the first real evidence that this is being reflected in the activity data. However, we …
Japan’s Business Outlook Survey (BOS), released this morning, has allowed us to firm up our forecast for the Q2 Tankan survey, released on 1st July. We now forecast that the headline index (current conditions reported by large manufacturers) will rebound …
22nd June 2009
The Bank of Japan shows no signs of repeating its past mistake of tightening policy prematurely, as was the case in both 2000 and 2006. Interest rates will remain near-zero for the foreseeable future. … Bank of Japan won’t lead a rush for the …
16th June 2009
This report is only available as a PDF. Click to download. … Job done? …
12th June 2009
The further recovery in Japanese consumer confidence in May is a necessary but unfortunately not sufficient condition for a sustained rebound in household spending. … Japan’s households less pessimistic, spending to remain …
The jump in Japanese export volumes in April gets the second quarter off to a flying start. Combined with the improvement in the forward-looking survey data it looks increasingly likely that GDP will record positive quarterly growth in the second quarter …
27th May 2009
This report is only available as a PDF. Click to download. … Japan GDP (Q1 Prelim.) …
20th May 2009
The jump in the Economy Watchers Survey of business conditions in April provides some of the best evidence yet that the Japanese economy is past the worst. However, while the recent rebound is impressive, the results are still in recession territory. … …
13th May 2009
The jump in Japan’s unemployment rate from 4.4% to 4.8% in March (consensus 4.6%) removes some of the shine from yesterday’s better manufacturing data. What’s more, unemployment has much further to rise. During the last economic cycle the unemployment …
1st May 2009
The rise in industrial production in March and projections of further increases in April and May support our view that the Japanese economy could start to grow again as soon as the current quarter. The rebound in the manufacturing PMI from 33.8 in March …
30th April 2009
Today’s March trade figures allow us to firm up our estimates for Japanese GDP in the first quarter and have an educated guess (with only a little imagination) at the second quarter too. The economy probably shrank by another 3.5% or so in Q1. But GDP is …
22nd April 2009
The improvement in consumer confidence reported this morning is consistent with our view that the Japanese economy could start growing again as early as the current quarter. Admittedly, any recovery in sentiment or activity needs to be seen in the context …
17th April 2009
The Bank of Japan further widened the range of eligible collateral in its money market operations after its Policy Board meeting today, although it is hard to avoid the feeling that it is now scraping the bottom of the barrel in terms of assets that can …
7th April 2009
Today’s reports that Japan is planning another fiscal stimulus, which will include more than ¥10 trillion (2% of GDP) in additional spending, are little surprise. But they do raise the question of whether this is affordable. As discussed in our latest …
6th April 2009
This report is only available as a PDF. Click to download. … Japan Tankan Survey (Mar.) …
1st April 2009
This report is only available as a PDF. Click to download. … Japan Activity Data & PMI (Feb./Mar.) …
31st March 2009
The Bank of Japan’s “Tankan” survey, released next Wednesday (1st April), will doubtless show that business conditions worsened further in the first quarter, but probably not by as much as the markets currently anticipate. We also expect the survey to …
23rd March 2009
Today’s announcement that the Bank of Japan is willing to provide subordinated loans to banks continues the drip-feed of unconventional policy measures it has introduced since October. The latest proposals seem half-hearted, like many of the others, but …
17th March 2009
This report is only available as a PDF. Click to download. … Japan GDP (Q4 Revised) …
12th March 2009
We expect Japan to record a deficit this year both on trade in goods and services and on the overall current account balance. This sharp turnaround (from large surpluses in 2007) reflects the double hit from the global recession and financial crisis on …
9th March 2009
This report is only available as a PDF. Click to download. … Japan Activity Data & CPI (Jan/Feb) …
27th February 2009
January’s data all but guarantee that collapsing exports will make another large negative contribution to Japan’s GDP in the first quarter. However, imports have also started to drop back, which means that the overall drag from net trade should still be …
25th February 2009
This report is only available as a PDF. Click to download. … What more can the BoJ do? …
18th February 2009
The speed and extent of the collapse in Japanese exports should at least mean that the immediate adjustment to weaker global demand has now largely run its course. The fall-out in terms of the damage to confidence, additional production cuts, growing …
16th February 2009
This report is only available as a PDF. Click to download. … Japan GDP (Q4 Prelim.) …
We expect next Monday’s preliminary data to show that the Japanese economy contracted by around 3.5% q/q in the fourth quarter of last year (an annualised rate of 15%). However, Japan may well then end up as one of the first of the major economies to …
9th February 2009
The Bank of Japan’s modest programme of asset purchases is unlikely to be the last word, especially given the deterioration in economic and financial conditions acknowledged today in its own forecasts and Senior Loan Officer Survey. … Bank of Japan has a …
22nd January 2009
This report is only available as a PDF. Click to download. … Edging back towards quantitative easing? …
20th January 2009
Japanese households and companies have avoided the financial excesses and over-indebtedness that point to a severe and prolonged recession in the West. Japanese banks are also in relatively good shape. We therefore continue to expect Japan to be among the …
24th December 2008
The Bank of Japan effectively reverted to a zero interest rate policy today and edged towards quantitative easing, although the embrace of QE is still half-hearted. We are certainly not impressed by the government’s latest “economic stimulus package”. … …
19th December 2008
This report is only available as a PDF. Click to download. … Bank of Japan to follow Fed to zero …
17th December 2008
The Bank of Japan’s Tankan survey of business conditions was not quite as bad as we had feared, but we may just have been a quarter early. The one consolation is that Japan is not alone – other major economies are doing just as badly, or a lot worse. … …
15th December 2008
We expect the headline numbers from the Bank of Japan’s quarterly “Tankan” survey for December, released next Monday, to be even worse than the consensus. Our forecast for the large manufacturers’ index is -40, compared to the median in the Bloomberg …
10th December 2008
This report is only available as a PDF. Click to download. … Japan CPI, IP, Unemployment & Spending (Oct) …
28th November 2008
As widely anticipated, the Bank of Japan left policy rates unchanged today. However, the prospect of outright declines in both economic activity and prices next year suggests that rates are heading back to zero and will remain there for the foreseeable …
21st November 2008
This report is only available as a PDF. Click to download. … Japan External Trade (Oct.) …
20th November 2008
This report is only available as a PDF. Click to download. … ZIRP to return in 2009 …
19th November 2008
This report is only available as a PDF. Click to download. … Japan GDP (Q3 Prelim.) …
17th November 2008
The Japanese financial system remains in relatively good shape. Despite the erosion of bank capital due to sliding stock markets, a number of factors suggest that there are no major risks to the banking sector. … Is trouble lurking within Japan’s …
6th November 2008
This report is only available as a PDF. Click to download. … Japan CPI, Unemployment & Spending (Sep) …
31st October 2008
The Bank of Japan’s willingness to cut interest rates even further from already exceptionally low levels, combined with the prospect of outright declines in both economic activity and prices, suggests that rates are heading back to zero and will remain …
This report is only available as a PDF. Click to download. … Japanese interest rates to be cut to zero …
29th October 2008
Inflation fears are rapidly being replaced by the very real chance of deflation in all the major economies. Indeed, we now expect Japanese inflation to turn negative again next year, averaging minus 0.5%. (The consensus is still plus 1.0%.) But in this …
28th October 2008
The Japanese economy may already be in technical recession, but we expect the downturn to be relatively short-lived and shallow. Sharp falls in inflation will boost real incomes, while Japan has avoided the fundamental economic and financial imbalances …
24th October 2008
This report is only available as a PDF. Click to download. … Japan External Trade (Sep.) …
23rd October 2008
A closer look at different measures of wages growth in Japan shows that, contrary to most analysis, the economic recovery in recent years has not been a “wageless” phenomenon. Even continued modest growth in nominal wages should be sufficient to support a …
