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Capital Economics

The leading macroeconomic research consultancy

Japan Economics Weekly

Aims to give the reader a snapshot view of both the current situation and the week ahead. It includes previews and forecasts of forthcoming events and data releases.

Sample - Sentiment running well ahead of hard data

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Can robots help offset adverse demographics?How much spare capacity is left?Is Kurodanomics working?Is Japan really investing too much?How much damage are high energy prices doing?Rising wages no guarantee of end to deflationHow vulnerable is Japan to geopolitical risks?Competitive gains from weak yen fail to materialiseInflation likely to fall back soonMaking sense of the diverging surveys
Is Japan facing a repeat of 1997-98?Strong positive momentum at start of new yearCan special zones revive the property market?“Wage surprise” more likely to be a damp squibMonetary Indicators Monitor (Dec.)Further Nikkei outperformance likelyIs the monetary arrow of Abenomics misdirected?A look ahead to 2014One year of Abenomics – what has changed?Near-term policy catalysts few and far between
How sustainable is the surge in consumption?Is Japan's dual labour market such a big problem?How serious is the government about austerity?The fallout from FukushimaWhat’s causing the widening in the trade deficit?High cash levels unlikely to trigger investment boomMore FDI could significantly boost productivityFurther yen weakness and Nikkei strength aheadDeficit target unlikely to be reachedCredibility at risk despite likely consumption tax hike
Who is benefitting from Abenomics?To what extent is the weak yen pushing up inflation?Why is regular pay not picking up?Spare capacity diminishing but still largeYen weakness helps to stabilise current accountMore investment needed to maintain capital stockYen weakness is not a panaceaTampering with the sales tax hike carries risksIs the housing market set to take off?Would consumption tax hikes derail the recovery?
Households unlikely to welcome higher inflationA look ahead to the Upper House electionsTankan likely to indicate recovery gathering paceMarket forecast revisions (mostly for the better)Is 3% growth achievable?Should we now worry about the yen?Edging out of deflationTaking stock of the recent market volatilityWas Q1’s strength really due to Abenomics?More downside for yen than upside for Nikkei
Is consumer spending already taking off?Doubts lingering at the BoJFiscal stimulus? What fiscal stimulus?Should we worry about rising JGB yields?Trade deal a test of commitment to structural reformTankan likely to signal only an anaemic recoverySentiment running well ahead of hard dataA more sympathetic view of Mr. ShirakawaEuphoria grips the equity marketTwo-year inflation target would be a step too far
Has the “Abe trade” run its course?Growing risk of disappointment from new-look BoJExpectations may now be too high to meetIs Japan back in recession?Will a new Governor deliver real change?Yen at risk of snap back if policy shift fails to impressSpending more just to stand stillNew policies fall short of market-moving rhetoricA look ahead to 2013Priorities for the new government
Japan's sliding infrastructure spendingMore tinkering around the edgesAll change at the Bank of Japan?The return of the LDPIs Japan’s labour market about to unravel?The effect of the consumption tax hike on growthJapan is fast approaching its own fiscal cliffAnother impotent “stimulus” packageJapan’s automakers and the importance of ChinaHow important is non-China Asia to Japan?
Production tumbles further but still no end in sightHow big is Japan's business presence in China?Can Japan cope without nuclear power?How successful was the auto subsidy?Industry struggling as policy support fadesNo respite in sight for Japan's manufacturersDon’t count on extra budget to revive the recoveryA look ahead to Q2 (and Q3) GDPTrouble in Japan's labour marketEnergy prices determining inflation in Japan
Why we expect weaker growth than the IMFJapan’s revitalisation strategyA quick look at housing and land prices in JapanRecovery stuttering to a haltThe allure of Japanese government bondsA closer look at Japanese bank lending in AsiaEconomy set to slow sharply after Q1 growth spurtHow exposed are Japanese banks to the periphery?The fire on the other side of the riverPower shortages will bite hard this summer
Safe haven demand to lift yen furtherA bumpy ride for growthJapan mustn’t miss chance for trade liberalisationA return to growth in 2012Making sense of the monetary aggregatesOver-employment at Japanese firms on the way outRaising the consumption tax: a small step forwardA brief look at Japan’s small business surveysWhat can be done to boost growth?How the disaster changed Japan’s economy
How much will the auto-subsidy boost GDP?Are rising oil prices a threat to Japan’s economy?Additional monetary easing is not enoughA closer look at the income accountFinance Ministry poised to act (unsuccessfully)Power uncertainty will accelerate hollowing outDoes talk of euro intervention make sense?Edging closer to a tipping pointLarge external surpluses are now historyA look back at 2011
Growth to disappoint in 2012Strong yen undermining efforts to control inflationGovernment relying on depleted fiscal firepowerA warning shot over public financesAnother blow for the auto industryJapan still a long way from joining free-trade pactThe success (or otherwise) of yen interventionDisappointing end to an unimpressive Q3Will GDP get a boost from house building activity?What can we learn from consumer confidence?
GDP forecasts revised downStimulus needed to prevent treble-dipBank of Japan not government could turn the yen“Operation Twist” not so pivotal for the yenNervous households have much to be nervous aboutVehicle sales: a good indicator of retail spending?Growth and inflation: where next?What will Japan's policymakers do next?Still in the grip of deflationDon’t overestimate the impact of a strong yen
What to make of a strong yenNo escape from deflationTrying to keep the lights onGDP forecasts refreshedA closer look at the TankanJapan-China trade: explaining the double deficitNew budget, same old problemsBank lending on course to rise againAuto sector moving up a gearLabour data still to feel full impact of earthquake