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Japan Wages & Household Spending (May 2021)

While the further acceleration in wage growth in May was again largely down to favourable base effects, we think wage growth will stay elevated as the labour market tightens and vaccines fuel a further recovery in overtime pay. Meanwhile, the only modest drop in household spending in May suggests that consumer spending may have edged up last quarter.
Tom Learmouth Japan Economist
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Japan Data Response

Japan External Trade (Apr. 2022)

Export volumes fell in April, and they are likely to remain subdued over the coming months until supply shortages dissipate and allow exporters to make up for lost ground.

19 May 2022

Japan Economics Focus

What would tighter monetary policy mean for Japan?

We don’t expect the Bank of Japan to tighten monetary policy meaningfully but, with inflation about to breach 2%, what if we are wrong? The direct impact of higher interest rates on the corporate sector would be manageable, but a stronger yen would weigh on corporate profits and business investment. Higher rates would also restrain housing-related activity and would probably cause a housing downturn, with the resulting fall in household wealth weighing on consumption.

18 May 2022

Japan Data Response

Japan GDP (Q1 2022 Preliminary)

Japan’s economy only contracted slightly in Q1 as consumption held up well despite prolonged restrictions during the Omicron wave. But while the economy will bounce back this quarter, we think Japan’s delayed reopening recovery will look weak when stacked up against the reopening rebounds in other advanced economies last year.

18 May 2022

More from Tom Learmouth

Japan Data Response

Bank of Japan Tankan (Q2 2021)

The further rebound in the Q2 Tankan supports our view that the economy’s disappointing start to the year won’t prevent vaccines driving a strong rebound in the second half of the year. And firms’ upbeat capital spending plans bolster our view that business investment will soon recover sharply.

1 July 2021

Japan Economics Focus

Transition to carbon neutral 2050 wouldn’t harm growth

Achieving net zero emissions in Japan in three decades is a difficult but achievable task. And while the most carbon-intensive sectors may face significant headwinds, overall we agree with PM Suga that economic growth wouldn’t have to be sacrificed to reach his goal of a carbon neutral 2050.

29 June 2021

Japan Data Response

Japan Labour Market & Retail Sales (May 2021)

While the further rise in the unemployment rate last month suggests on-off restrictions are taking their toll on the labour market, employment should bounce back strongly soon. Meanwhile, consumer spending should already be recovering and will receive a further boost from vaccines later next quarter.

29 June 2021
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