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Capital Economics

The leading macroeconomic research consultancy

Japan Economics Update

Short and timely commentaries on economic or market issues and events.

Sample - BoJ sets stage for further weakening of yen

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Monetary Indicators Monitor (Feb.)Bank of Japan still likely to ease preemptively next monthIs Japan’s electronics sector doomed?Should we be worried about the negative saving rate?What’s behind the slowdown in Japanese FDI into China?Cautious Bank of Japan still set to ease again in late-AprilPrice pressures building slowlyConcerns about yen unlikely to prevent more BoJ easingMonetary Indicators Monitor (Jan.)BoJ still likely to ease again soon
Government eases pressure on BoJ to expand stimulusImpact of weaker yen on export volumes remains elusiveBoJ’s optimism reduces chances of near-term easingMonetary Indicators Monitor (Dec.)Benefits from Japan’s tourism boom remain limitedFiscal policy still becoming tighter despite rising spendingDemographic headwinds are picking upLower energy prices to require more easingMonetary Indicators Monitor (Nov.)What impact is a weaker yen having on imports?
Further stimulus still eventually neededWhat impact will the delay in the sales tax hike have?Monetary Indicators Monitor (Oct.)Talk of snap election lifts marketsCoordinated policy moves raise likelihood of sales tax hikeAsset shortage no constraint on QQEBoJ sets stage for further weakening of yenSurge in consumption tax revenue yet to comeMonetary Indicators Monitor (Sep.)Inflation still likely to moderate despite recent yen weakness
BoJ not yet ready to expand stimulusMonetary Indicators Monitor (Aug.)Imminent easing by BoJ unlikelyAre part-time workers depressing wage growth?Why are Japan’s exports (still) not picking up?Q2's inventory surge not necessarily a sign of troubleMonetary Indicators Monitor (Jul.)BoJ may still have to step up pace of easingBoJ still likely to extend QQE despite upbeat inflation forecastsMonetary Indicators Monitor (Jun.)
Third arrow unlikely to boost potential growth significantlyExternal trade (May)Rumours of QQE's end have been greatly exaggeratedMonetary Indicators Monitor (May 14)For how much longer can the BoJ buy government bonds?July easing seems to be off the tableHow much could higher female employment boost GDP?Monetary Indicators Monitor (Apr.14)BoJ divisions underline case for more easingMonetary Indicators Monitor (Mar 14.)
Poor consumer sentiment adds to PM Abe’s challengesExpectations of mid-year easing likely to be disappointedFiscal consolidation continues despite “record” spendingIs bank lending a reliable gauge of Japan's economy?Monetary Indicators Monitor (Feb.)No great urgency for additional monetary stimulusStalling talks set back hopes for TPP as catalyst for reformBad weather unlikely to have major effect on outputBank of Japan again signals readiness to ease furtherQ4 GDP not as bad as headlines imply
Monetary Indicators Monitor (Jan 14.)Falling real wages partly mitigated by rising employmentCould the market turmoil derail Japan's recovery?Nuclear shutdown not the main reason for surging trade deficitBoJ still likely to ease more as dissenting voices increaseCould local politicians block the restart of nuclear energy?Japan’s tourism resurgence won’t do much for economyUndervaluation unlikely to prevent further yen weaknessBank of Japan's caution underlines easing biasMonetary Indicators Monitor (Nov.)
Talk of imminent monetary easing seems prematureHow disruptive are tensions with China?Bank of Japan likely to keep its inflation targetBank of Japan probably on hold until second half of 2014Monetary Indicators Monitor (Oct.)Which indicators will be most affected by the sales tax hike?Bank of Japan in no hurry to ease furtherMonetary Indicators Monitor (Sep.)What to expect from the autumn Diet sessionNikkei set to outperform again
Bank of Japan still likely to ease moreConsumption tax hike leaves credibility at riskCross-border lending exposes Japanese banks to new risksMonetary Indicators Monitor (Aug.)Consumption tax strategy leaves credibility in doubtOlympics likely to be an economic non-eventBank of Japan reiterates support for consumption tax hikesMore is needed to encourage women to workRaising the official retirement age may have little impactMonetary Indicators Monitor (Jul.)
Options for the consumption taxCase for corporate tax cuts appears irresistibleBusiness investment turning upWhat do the Q2 GDP data mean for the consumption tax?Bank of Japan may still have to ease furtherTrans-Pacific Partnership talks to test PM Abe’s resolveHard work begins after the Upper House electionsNuclear energy restart not a game changerMonetary Indicators Monitor (Jun.)Time to shift the focus to “core-core” inflation?
Bank of Japan may still have more work to doConfidence in “Abenomics” still high, but waningEconomy Watchers Survey suggests recovery is slowingRising wages needed to keep up with higher pricesTankan confirms recovery on trackSmall firms shrug off market volatilityMonetary Indicators Monitor (May)Surge in exports not quite as good as it looksWhat's behind the rebound in the yen?What’s holding back investment?
Bank of Japan declines to panicSurveys show faith in "Abenomics" remains highVerdict on Abe speech seems harshConsumption tax hikes essential to maintain credibilityRetail sales yet to take offSmall business survey illustrates risks to recoveryBoost to Nikkei from weaker yen has run its courseBank of Japan sticks to its gunsGDP starts 2013 stronglyMonetary Indicators Monitor (Apr.)
Consumer confidence falters on inflation fearsWhat’s behind the surge in JGB yields?Improving sentiment still not matched in hard dataWhat next for the yen?Monetary Indicators Monitor (Mar.)Slighter better trade data still little to cheerBoost to confidence from “Abenomics” may be waningMore downside for yen than upside for Nikkei?BoJ sets high bar to establish credibilitySmall business survey raises some warning flags
Positive wealth effects from equity gains still limitedTrade data show yen weakness has costs as well as benefitsMonetary Indicators Monitor (Feb.)Business and consumer surveys up but details not so goodImproving sentiment yet to be matched in investmentBank of Japan awaits Kuroda but will surely move in AprilHigher inflation not necessarily good news for workersIndustry recovering but still plenty for Kuroda to doGlobal demand, not yen, behind export recoverySlide back into recession bad news but old news
Japanese consumers confident in “Abenomics”Q4 GDP probably still fell despite recovery in ordersHopes of smooth handover at the BoJ may be wishful thinkingFiscal credibility starting to unravelRecord trade deficit only partly due to yen strengthMonetary Indicators Monitor (Dec. 12)Should we worry about the Bank of Japan’s independence?Bank of Japan’s policy overhaul fails to impress"Fiscal stimulus" just more of the sameWill there be any real change at the Bank of Japan?