Japan External Trade (Jul. 2021)

Japan’s export volumes stagnated in July but given that a large share of those exports are cars and capital goods, we think they will rise again over the coming months.
Marcel Thieliant Senior Japan, Australia & New Zealand Economist
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Japan Economics Weekly

Restrictions may not last long, key Shunto approaching

With restrictions this week expanded to cover most of Japan’s economy, and surging infections already starting to cause staff shortages in some industries, GDP is only likely to tread water this quarter. But based on experience elsewhere, the Omicron surge may only last another couple of weeks before staff shortages ease and countermeasures start to be lifted again. Meanwhile, reports suggesting that Toyota’s labour union – sometimes seen as a bellwether in wage talks – will seek a sharp rise in bonus payments at this year’s Shunto could be an early sign that wage growth will pick up this year in line with PM Kishida’s wishes.

21 January 2022

Japan Data Response

Japan Consumer Prices (Dec. 2021)

Consumer price inflation reached a two-year high of 0.8% in December, but with energy prices set to fall back, we think that it will peak around 1% by mid-year.

21 January 2022

Japan Data Response

Japan External Trade (Dec. 2021)

Exports were broadly stable in December after a sharp rebound in November. We think they’ll continue to recover at a decent pace this year as external demand for capital goods continues to rise and motor vehicle exports resume their recovery once Omicron waves subside.

20 January 2022

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Australia & New Zealand Economics Update

RBA may be too pessimistic about price pressures

The Reserve Bank of Australia signalled today that it’s unlikely to reverse the tapering of its bond purchases even as Sydney’s virus outbreak is getting worse. We still expect the tight labour market to deliver stronger wage growth and inflation than the Bank is anticipating, prompting the Bank to tighten earlier than its current guidance of 2024.

6 August 2021

Japan Economics Weekly

Calls for more draconian restrictions growing

The number of new virus cases hit record highs this week as the Delta variant is now spreading widely. While the vast majority of the elderly are now fully vaccinated and deaths have remained low, the number of hospitalisations has surged. With the government acknowledging that the medical system risks being overwhelmed, calls for a nationwide state of emergency or a “hard” lockdown have grown louder, which poses downside risks to our forecast that the economy will merely tread water this quarter.

6 August 2021

Japan Data Response

Japan Wages & Household Spending (Jun. 2021)

The weakness in wage growth in June reflected both a slowdown in regular pay and a drop in summer bonuses. But with the labour market set to tighten and corporate profits on the mend, we think that wage growth will rebound before long.

6 August 2021
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