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What does deglobalisation mean for Japan?

There are good reasons to think that the natural stalling in globalisation underway won’t do much damage to Japanese manufacturers. And while an abrupt severing of supply chains between China on the one hand and the US and its allies on the other would be highly disruptive, Japanese firms would benefit in the long-run as they could step into the breach. Perhaps the biggest risk is that a more nationalist China focused on raising self-sufficiency makes it increasingly difficult for Japanese firms to operate there.
Marcel Thieliant Senior Japan, Australia & New Zealand Economist
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More from Japan

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

Japan Data Response

Japan Consumer Prices (May 2022)

While inflation didn’t rise any further in May, it will remain above the BoJ’s 2% target until early-2023, while underlying inflation will approach 2%. However, the Bank won’t respond with tighter policy. 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

Japan Data Response

Japan Flash PMIs (Jun. 2022)

The PMIs suggest that supply shortages are still holding back manufacturing output and adding to price pressures. On a more upbeat note, the surveys also point to a strong pick-up in consumption as the economy rebounds from the Omicron wave and international tourists return. 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.  

23 June 2022

More from Marcel Thieliant

Australia & New Zealand Economics Update

Australia- Shipping costs to boost inflation next year

Soaring shipping costs will exacerbate the impact of the weaker exchange rate on import price inflation. Indeed, we expect underlying inflation to return into the RBA’s 2-3% target next year.

20 September 2021

Japan Economics Weekly

Struggling to generate inflation even now

While inflation in most advanced economies is now well above central banks’ targets, it is still negative in Japan. This is largely due to idiosyncratic factors that should fade by the middle of next year. Even so, inflation won’t reach the Bank of Japan’s 2% target anytime soon.

17 September 2021

Australia & New Zealand Data Response

Australia Labour Market (Aug.)

Employment plunged by 1.1% m/m in August, but we still think that the unemployment rate won’t surpass it pre-Delta level over the coming months even as the participation rate rebounds.

16 September 2021
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