The Bank of Japan had to step in yet again to defend its 10-year yield target this week, but it didn’t have to go to the same lengths as in late-March to keep yields in check. With yields nailed to the floor, the yen continued to slide rapidly against the dollar, but we doubt that the Finance Ministry’s jawboning will be followed up by actual intervention. Meanwhile, Japan’s population fell at the fastest pace on record last year. Unfortunately, a shrinking population is now being compounded by falling productivity. The upshot is that the long-term prospects for Japan’s economy are increasingly grim.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services