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Race for next PM wide open after Suga’s resignation

The resignation of Prime Minister Suga could mark a return to the tradition of short-lived leaders that characterised Japan’s political system before Abenomics. Even so, the ruling LDP-Komeito coalition is still likely to win the Lower House election due by end-November and the new PM will probably keep fiscal policy very loose.
Marcel Thieliant Senior Japan, Australia & New Zealand Economist
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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

RBA Watch

RBA to stay the course

The health situation in Australia continues to deteriorate, but the acceleration in the vaccine rollout means that lockdowns probably won’t last much longer. The Bank doesn’t believe that stepping up its asset purchases will provide much help and we expect it to stick to its plan of tapering its asset purchases to $4bn at the upcoming meeting.

1 September 2021

Australia & New Zealand Data Response

Australia GDP (Q2 2021)

The further rise in GDP in Q2 was broadly in line with the RBA’s expectations and we suspect the Bank will press ahead with tapering its asset purchases this month.

1 September 2021

Japan Data Response

Japan Retail Sales (Jul. 2021)

While retail sales recovered further in July, the high frequency data point to a renewed fall in August as the Delta wave intensified and we’ve pencilled in a 0.8% drop in private consumption in Q3.

30 August 2021
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