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Manufacturing profit margins set to reach record-high

Soaring input prices have kept profit margins of manufacturers below their pre-virus peak even as those of services firms have hit record highs. However, manufacturers will catch up before long.
Marcel Thieliant Senior Japan, Australia & New Zealand 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 Marcel Thieliant

Australia & New Zealand Economics Update

RBA ends QE; first rate hike will come in August

The RBA today ended its bond purchases, revised up its inflation forecasts and no longer signalled that wage growth needs to be “materially higher” to meet its inflation target on a sustained basis. We expect the first rate hike in August. Australia Drop-in: Will soaring inflation prompt the RBA to follow the Fed soon? Join Marcel Thieliant and Ben Udy for a discussion about the outlook for monetary policy in Australia on Thursday, 3 Feb at 11am SGT/2pm AEDT.  Registration here.

1 February 2022

Japan Economics Weekly

Stricter listing rules to lift profitability further

Profit margins of listed Japanese firms hit a record high at the end of last year despite the headwinds from goods shortages and soaring input costs. That rise has a large structural component, reflecting improved corporate governance and reduced cross-shareholdings. Stricter listings rules by the Tokyo Stock Exchange that will come into force this year will provide fresh momentum to the upward trend in profits.

28 January 2022

Australia & New Zealand Economics Weekly

RBA to hike rates in August

The jump in consumer prices in Q4 reflected further strong gains in the usual suspects of petrol prices and costs of new dwelling purchases. But services inflation has picked up sharply as well. With the labour market now the tightest in more than a decade, the RBA will find it increasingly difficult to dismiss that strength as temporary and we now expect it to start hiking rates as soon as August.

28 January 2022
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