Japan Economics Update Can Japan meet its US investment pledge? Japan will struggle to invest $550bn in foreign direct investment in the US. But we suspect that this sum also includes other forms of capital, which would make it feasible to meet the target and... 17th September 2025 · 3 mins read
Japan Economics Update Change in Japan's government won’t keep BoJ from hiking Markets appear concerned that Prime Minister Ishiba’s successor will put pressure on the Bank of Japan to keep interest rates low. But available precedents suggest that the Bank would not be easily... 8th September 2025 · 4 mins read
Equities Update Japan’s stock market still looks appealing Foreign investors have generally been piling into Japan’s stock market in recent months, presumably encouraged by, among other things, the country’s recent trade deal with the US, the continued... 3rd September 2025 · 6 mins read
Asia Economics Update How rising defence spending will impact Asia Defence spending across Asia is set to rise over the coming years, driven in part by increased pressure from the US for its allies to shoulder more of their own security costs. While the overall boost... 27th August 2025 · 4 mins read
Japan Economics Update Ueda overstating structural change in labour market The Bank of Japan is overplaying the importance of structural changes in Japan’s labour market in explaining the post-pandemic pick-up in cost pressures. Even so, we still expect inflation to be... 26th August 2025 · 5 mins read
Global Economics Update New US tariff regime still not the end of the story President Trump’s latest flurry of tariffs implies that the US effective tariff rate will rise to about 18%, from 2.3% last year. That is a little higher than we assumed and so presents modest... 1st August 2025 · 5 mins read
Japan Economics Update Bank of Japan opening door to year-end rate hike While the Bank of Japan turned a touch more optimistic today, it still sees trade tensions as a major headwind. However, we still believe that policymakers are too pessimistic about the inflation... 31st July 2025 · 3 mins read
Global Markets Update Why another slump in superlong JGBs is not inevitable The recent rout in superlong JGBs mainly reflected waning demand from within Japan. Although that trend may not reverse because it is partly structural, we doubt the slump will continue for four... 28th July 2025 · 5 mins read
Japan Economics Update Your questions on Japan answered We held an online Drop-In session yesterday to discuss the latest developments in Japan’s economy and financial markets. This Update answers several of the questions that we received. 24th July 2025 · 7 mins read
Japan Economics Update LDP election defeat points to looser fiscal policy in Japan With Japan’s ruling coalition losing its majority in the Upper House, fiscal policy may be loosened over the coming months. However, we think that the outlook for monetary policy will be a more... 21st July 2025 · 4 mins read
Asia Economics Update Trade negotiations to take centre stage for Asia Trump has confirmed that punitive tariffs on Asian countries will take effect on 1 st August unless trade deals are agreed by the end of the month. Despite the urgency, negotiations could prove... 8th July 2025 · 3 mins read
Japan Economics Update Tariff uncertainty may delay BoJ rate hikes until 2026 Our base case remains that Japan will reach a deal with the US to fend off the threatened 25% US tariff. If that deal is reached soon and includes no or only a modest increase in the US tariff rate... 8th July 2025 · 4 mins read
Japan Economics Update Improvement in fiscal health has further to run The flow of funds data suggest that Japan’s budget deficit has continued to narrow after reaching a 30-year low in 2023. And while the recent plunge in the ratio of government debt to GDP partly... 27th June 2025 · 3 mins read
Japan Economics Update Services inflation set to surpass goods inflation Prices of public services and rents are rising at the fastest pace in years, which supports our view that inflation will remain above the Bank of Japan’s 2% target even as the impact of the post... 24th June 2025 · 3 mins read
Japan Economics Update Carmakers slashing prices in response to US tariffs There are signs that Japanese carmakers are reducing their prices in the US to retain market share, which seems to vindicate the Bank of Japan’s concerns that US tariffs will weigh on corporate... 19th June 2025 · 3 mins read
Japan Economics Update Bank of Japan will hike rates before year-end The Bank of Japan decided to taper its bond purchases at a slower pace from next year and retained its pessimistic outlook for the economy. However, we expect that mounting upside risks to the Bank’s... 17th June 2025 · 3 mins read
