Japan Economics Update Car industry still set to lose importance Japanese carmakers are rapidly losing global market share as the country’s vehicle industry is a laggard in the rollout of electric vehicles. While the industry’s share of GDP has held up well in... 11th November 2025 · 3 mins read
Japan Economics Update BoJ will wait until January before tightening again The Bank of Japan kept policy settings unchanged today and Governor Ueda indicated that the Bank wants to gather more information on the strength of pay hikes in next year’s spring wage negotiations... 30th October 2025 · 3 mins read
Japan Economics Update Lower BoJ profits not a major drag on public finances If we’re right that the Bank of Japan will lift its policy rate to 1.5% by 2027, its net interest income will turn negative over the next couple of years. However, its overall net income should remain... 16th October 2025 · 5 mins read
Japan Economics Update Real wages not falling as much as official data suggest Real wages haven’t fallen as sharply as the official data released by the Ministry of Health, Labour and Welfare would suggest. Nonetheless, it is striking that workers are not benefitting much from... 13th October 2025 · 4 mins read
Asset Allocation Update We’re now less upbeat on the yen, more on the TOPIX We now think the yen will appreciate a bit more slowly against the US dollar than we’d previously forecast, but we’re revising up our projections for Japan’s stock market. 10th October 2025 · 5 mins read
Japan Economics Update Rare budget surplus within reach Japan may record a rare budget surplus this year which means that the incoming PM has more fiscal leeway than is generally acknowledged. However, as that improvement won’t be confirmed until late-2026... 9th October 2025 · 3 mins read
Japan Economics Update Bank of Japan will delay rate hike until January While the economic case for tighter monetary policy remains intact, we suspect that the Bank of Japan will use the pressure by Japan’s incoming government as an opportunity to delay rate hikes until... 8th October 2025 · 4 mins read
Japan Economics Update Japan’s profitability will continue to lag the US An improvement in corporate governance is a key reason behind the structural pick-up in corporate profit margins over the past two decades. However, even if corporate governance was improved further... 7th October 2025 · 4 mins read
Japan Economics Update What would PM Takaichi mean for Japan? We doubt that incoming PM Sanae Takaichi will prevent the Bank of Japan from hiking interest rates altogether though her victory makes it less likely that the Bank will hike this year. In fact, any... 6th October 2025 · 5 mins read
Japan Economics Update Tokyo CPI is overstating the pace of disinflation The Tokyo CPI is overstating the pace at which inflation is moderating across Japan and we still believe that the Bank of Japan will resume its tightening cycle at its October meeting. 29th September 2025 · 3 mins read
Japan Economics Update Bank of Japan inching towards tighter policy While the two dissents by BoJ Board members could be a red herring, we’re sticking to our long-held view that the Bank will resume its tightening cycle next month and lift rates to 1.5% by 2027. Note... 19th September 2025 · 3 mins read
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
