Japan Economics Update Two-thirds majority no reason to cheer The landslide victory for Japan’s ruling coalition in the Upper House election is not necessarily good news for the economy, as lawmakers’ time and energy may now be focused on revising the pacifist... 11th July 2016 · 1 min read
Japan Economics Update Would FX intervention halt the strengthening of the yen? If worries about a deepening crisis in the EU drive another surge of safe haven flows into Japan, even direct foreign exchange intervention would probably not prevent the yen from strengthening... 29th June 2016 · 1 min read
Japan Economics Update Should the BoJ become more flexible? Doing away with a specific timeframe for reaching 2% inflation would sow doubts about policymakers’ commitment to the 2%-target and would be a major step backwards. Instead, more stimulus is needed to... 22nd June 2016 · 1 min read
Japan Economics Update Monetary Indicators Monitor (May) Bank lending rates have fallen sharply since policymakers introduced negative interest rates in January. One consequence is that bank profits have started to moderate from high levels. 21st June 2016 · 1 min read
Japan Economics Update Bank of Japan to provide more easing next month The Bank of Japan still sees downside risks to its inflation forecasts, and we believe that policymakers will respond by stepping up the pace of easing next month. 16th June 2016 · 1 min read
Japan Economics Update Delay in sales tax hike brightens outlook for 2017 The delay that has just been confirmed in the sales tax hike will result in economic activity being stronger than would have been the case next year. The decision diminishes pressure on the Bank of... 1st June 2016 · 1 min read
Japan Economics Update Monetary Indicators Monitor (Apr.) Claims that the launch of negative interest rates has caused a flight to cash are exaggerated. However, there are clear signs that negative rates have lowered borrowing costs for Japan’s private... 25th May 2016 · 1 min read
Japan Economics Update Manufacturing PMI points to sharp slowdown in Q2 The fifth straight drop in the manufacturing PMI in May suggests that economic momentum slowed sharply in the second quarter. 24th May 2016 · 1 min read
Japan Economics Update Is consumer spending stronger than we thought? The new measure of consumer spending developed by the Bank of Japan does not appear to be an improvement on the Cabinet Office’s “synthetic consumption index”. In any case, both measures show that... 4th May 2016 · 1 min read
Japan Economics Update Bank of Japan will be forced to ease more before long The Bank of Japan’s decision to forgo additional easing today came as a major disappointment to markets and resulted in a sharp appreciation of the yen. Amid sluggish growth and moderating price... 28th April 2016 · 1 min read
Japan Economics Update Is helicopter money an option in Japan? We believe that public spending financed permanently by central bank transfers would be a viable option to boost demand and lift price pressures. However, until the existing policy measures are... 26th April 2016 · 1 min read
Japan Economics Update Earthquake unlikely to have major economic impact While the earthquake that hit Kyushu Island during the weekend is a human tragedy, we doubt that it will have a severe impact on Japan’s economy. The scale of damage does not appear huge and... 18th April 2016 · 1 min read
Japan Economics Update What is the end-game for Japan’s debt problem? If the end-game for Japan’s public debt problem is direct financing of the budget deficit by the Bank of Japan, this could be a step towards a solution rather than the disaster that many assume... 14th April 2016 · 1 min read
Japan Economics Update Monetary Indicators Monitor (Mar.) While corporate debt has been broadly stable relative to output in recent years, firms have never been in a better position to service their debt as interest rates have collapsed and profits have... 14th April 2016 · 1 min read
Japan Economics Update Has monetary policy lost its power? We do not share the view that monetary policy has become impotent. However, scope to step up monetary stimulus much beyond current levels is small. The Bank of Japan’s efforts to boost growth and lift... 13th April 2016 · 1 min read
Japan Economics Update Will shopping vouchers boost consumption? The proposed distribution of shopping vouchers to households would only boost spending temporarily. In order to lower precautionary savings and provide a longer-lasting impetus to private consumption... 6th April 2016 · 1 min read
