Bank preparing for prolonged hold

After tweaking a range of policy measures in March, the Bank of Japan will keep policy settings unchanged in April. By addressing the side effects of ultra-loose policy, the Bank has set the stage for a prolonged period of inaction.
Marcel Thieliant Senior Japan, Australia & New Zealand Economist
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Japan Economics Weekly

Vaccines for all by November, ¥1000 minimum wage

The revised Q1 GDP figures and April wage data released this week suggest the economy was a little more resilient than first appeared in the early part of this year. And the economy is looking increasingly well set for a strong rebound in the second half of the year. Daily COVID cases and the number of patients in hospital have continued to plunge. With 98% of Japan’s municipalities expecting to be able to meet the government’s target of finishing vaccinations for the over-65s by end-July, the risk of the healthcare system being stretched to breaking point again is diminishing. The only remaining major downside risk now is the prospect of a more infectious variant – such as that first found in India – taking hold rapidly soon.

11 June 2021

Japan Economics Weekly

Vaccines for all by November, ¥1000 minimum wage

With daily cases plunging and daily vaccine doses surging, the economy is looking increasingly well set for a strong rebound in Q3. And further ahead, PM Suga’s pledge this week to offer all residents vaccines by November appears doable and if achieved should permanently unshackle the face-to-face services sector from containment measures towards the end of the year. Elsewhere, Mr Suga aims to raise the minimum wage to ¥1,000, but media reports suggest that goal may not be reached until 2024. We think there is room for the government to hike the minimum wage more aggressively.

11 June 2021

Japan Economics Weekly

Vaccines for all by November, ¥1000 minimum wage

With daily cases plunging and daily vaccine doses surging, the economy is looking increasingly well set for a strong rebound in Q3. And further ahead, PM Suga’s pledge this week to offer all residents vaccines by November appears doable and if achieved should permanently unshackle the face-to-face services sector from containment measures towards the end of the year. Elsewhere, Mr Suga aims to raise the minimum wage to ¥1,000, but media reports suggest that goal may not be reached until 2024. We think there is room for the government to hike the minimum wage more aggressively.

11 June 2021

More from Marcel Thieliant

Australia & New Zealand Economics Focus

The impact of the pandemic on inflation

We expect inflation to rise to the mid-point of the RBA’s target band over the next couple of years. The main driver is a continued tightening of the labour market and a pick-up in wage growth. By contrast, we think that the goods supply shortages resulting from the pandemic will subside before long and will be more than offset by a plunge in import prices due to the stronger exchange rate.

2 June 2021

Australia & New Zealand Data Response

Australia GDP (Q1 2021)

Australia's GDP surpassed its pre-virus level in Q1 but with the vaccination rollout still slow and a fresh lockdown in Melbourne, the recovery is set to slow.

2 June 2021

Australia & New Zealand Economics Update

RBA will expand QE by another $100bn next month

The Reserve Bank of Australia still sounded dovish when it kept policy settings unchanged today. We think it will expand its bond purchase program by another $100bn next month.

1 June 2021
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