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Japan External Trade (Nov. 2021)

The jump in exports in November suggests that most supply chain constraints in the automobile sector had already eased last month. We think that exports will remain strong over the coming months as motor vehicle exports recover further and external demand for capital goods continues to rise. Note: Central Bank Drop-In – The Fed, ECB and BoE are just some of the key central bank decisions expected in this packed week of meetings. Neil Shearing and a special panel of our chief economists will sift through the outcomes on Thursday, 16th December at 11:00 ET/16:00 GMT and discuss the monetary policy outlook for 2022.
Tom Learmouth Japan Economist
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Japan Data Response

Japan Industrial Production (May 2022)

The plunge in industrial output in May suggests that Japan’s recovery is disappointing yet again. The upshot is that it will take until the second half of the year for GDP to surpass its pre-virus level. Asia Drop-In (30th June, 09:00 BST/16:00 SGT): Are Asia’s central banks behind the curve? Can the Bank of Japan and People’s Bank of China continue to go against the grain? Find out in our special session on what global monetary tightening looks like in Asia. Register now.  

30 June 2022

Japan Data Response

Japan Retail Sales (May 2022)

The disappointing rise in retail sales in May poses downside risks to our upbeat forecasts for consumption growth in Q2. Asia Drop-In (30th June, 09:00 BST/16:00 SGT): Are Asia’s central banks behind the curve? Can the Bank of Japan and People’s Bank of China continue to go against the grain? Find out in our special session on what global monetary tightening looks like in Asia. Register now.  

29 June 2022

Japan Economics Weekly

Respite for BoJ doesn’t weaken case for a policy tweak

Pressure on the Bank of Japan’s Yield Curve Control framework eased this week. On the campaign trail for the Upper House election, where inflation has emerged as a key concern, Prime Minister Kishida said that monetary tightening would do more harm than good. Even more welcome for the BoJ, pressure emanating from the bond market has dropped back too. It had to buy less than a tenth as many JGBs this week as last. Some might feel that this reduces the need to shore up the policy framework. But a respite provides a window in which to make it more resilient.
Asia Drop-In (30th June, 09:00 BST/16:00 SGT): Are Asia’s central banks behind the curve? Can the Bank of Japan and People’s Bank of China continue to go against the grain? Find out in our special session on what global monetary tightening looks like in Asia. Register now.  

24 June 2022

More from Tom Learmouth

Japan Economics Weekly

Wage-boosting tax breaks, Toyota setback

The government’s new plan to offer firms more generous tax deductions for raising wages is unlikely to lift wage growth to 3% as targeted by PM Kishida. But with smaller firms being offered corporate tax credits as high as 40%, we think the new measures may entice some firms into bigger wage hikes against a backdrop of tougher hiring conditions over the next few years. Meanwhile, renewed supply chain disruption in Vietnam – where daily cases are back at record highs – is a downside risk to our upbeat outlook for Japanese car production.

10 December 2021

Bank of Japan Watch

BoJ to extend Covid aid, won’t lose control of yields

While renewed virus restrictions are unlikely to be deflationary, we think Omicron fears will prompt the Bank of Japan to err on the side of caution and extend its emergency corporate funding measures to the end of September. Meanwhile, we disagree with the argument that 10-year JGB yields may spike past +0.25% if inflation surprises to the upside.

9 December 2021

Japan Data Response

Japan Wages & Household Spending (Oct. 2021)

Wage growth stayed weak in October but it should accelerate as the labour market tightens and the recent vaccine-led reopening allows a full recovery in overtime and bonus payments. Meanwhile, the rise in household spending in October supports our view that consumer spending will rebound strongly across Q4.

7 December 2021
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