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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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 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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