Japan Machinery Orders (Aug. 2021)

The fall in machinery orders in August supports our view that the recovery in business investment stalled a little across Q3. But private investment should rebound more strongly in Q4 and into next year provided vaccines allow economic activity to return to somewhere near normal.
Tom Learmouth Japan Economist
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Japan Data Response

Labour Market & Industrial Production (Oct. 2021)

Employment fell sharply again in October despite the lifting of states of emergency declarations at the start of the month. However, it should rebound sharply across November and December in line with the revival in face-to-face service sector activity. And while industrial production only edged up in October, we think it too will rebound more strongly this month and next, potentially approaching its recent April peak in December.

30 November 2021

Japan Data Response

Japan Retail Sales (Oct. 2021)

Retail sales kept rising in October despite another drop in motor vehicles sales. With supply disruptions now starting to ease and mobility picking up, they should continue to increase.

29 November 2021

Japan Economics Weekly

Government seeks to revive soggy chip industry

The breakdown of PM Kishida’s new supplementary budget released today showed that ¥600 billion has been allocated to reviving semiconductor manufacturing in Japan. The centrepiece of the plan is a new TSMC factory in Kumamoto Prefecture that will produce the mid-range chips critical for car production. Given recent supply disruptions caused by chip shortages, beefing up local production makes strategic sense. We think the government’s new interventionist approach to stimulating mid-range chip production may succeed, but plans to make inroads into high-range chip production are likely to fall flat.

26 November 2021

More from Tom Learmouth

Japan Economics Weekly

Southeast Asia shortages unlikely to derail recovery

The huge fall in car sales in September suggests that shortages of parts from Southeast Asia are starting to hamper goods consumption. And while factories in important suppliers such as Vietnam and Malaysia are now reopening, the large backlogs of orders suggest that the handbrake is likely to remain on the car industry for the time being. But given that retail spending on cars only makes up a tiny share of total consumption, we don’t expect this to derail the strong, services-driven rebound in consumer spending we’re expecting in Q4.

8 October 2021

Japan Data Response

Japan Wages & Household Spending (Aug. 2021)

Wage growth recovered a touch further in August and it should rise higher over the coming months as the labour market tightens and vaccines allow a full recovery in overtime and bonus payments. Meanwhile, the sharp drop in household spending in August supports our view that consumer spending will fall across Q3.

8 October 2021

Japan Data Response

Japan Labour Market (Aug. 2021)

While employment fell sharply in August, that was due to the Delta wave and should only prove a temporary setback. We expect the jobless rate to fall further over the coming months as the lifting of virus restrictions allows face-to-face services employment to rebound.

1 October 2021
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