Japan Economics Update Underlying inflation to moderate further The Bank of Japan’s new favourite inflation gauge remained below its December peak in February. Sizeable spare capacity and falling import prices suggest that price pressures will moderate further. 28th March 2016 · 1 min read
Japan Economics Update Delay in sales tax hike becoming more likely PM Abe has invited outspoken opponents of tighter fiscal policy to a panel debating whether or not to raise the sales tax next year, which suggests that the chances of a renewed postponement are... 16th March 2016 · 1 min read
Japan Economics Update Dovish Bank of Japan to announce more easing next month The Bank of Japan did not announce additional monetary easing at today’s meeting, but dropped some strong hints that it believes more stimulus will eventually be needed. We now expect policymakers to... 15th March 2016 · 1 min read
Japan Economics Update Monetary Indicators Monitor (Feb.) Corporate bond yields have collapsed since the Bank of Japan adopted negative interest rates. However, with bonds only accounting for a quarter of corporate debt, bank lending rates would also have to... 10th March 2016 · 1 min read
Japan Economics Update Nominal GDP growth set to slow again The surge in nominal GDP last year reflects temporary factors and should not be taken as a sign of success for Abenomics. In fact, nominal GDP growth is set to slow this year. 29th February 2016 · 1 min read
Japan Economics Update Will negative JGB yields result in an operating loss for the BoJ? JGB yields would have to fall by another 40bp to wipe out the Bank of Japan’s profits, and they would have to remain that negative for many years to erode its capital base. However, that would be a... 23rd February 2016 · 1 min read
Japan Economics Update Outlook for consumer spending remains weak We don’t expect the recent slump in the stock market to create a major drag on consumer spending. But with wage growth unlikely to accelerate, we think that private consumption will be weaker this... 19th February 2016 · 1 min read
Japan Economics Update Monetary Indicators Monitor (Jan.) While domestic lending continues to expand at a steady pace, the bigger story is the continued expansion in cross-border lending. Even though banks have curtailed their exposure to China, overall... 16th February 2016 · 1 min read
Japan Economics Update Will a stronger yen derail the BoJ’s efforts to hit 2% inflation? The recent appreciation of the yen, even if sustained for longer, should not have a major impact on external demand nor consumer prices. However, it will lower corporate profits and could reduce firms... 15th February 2016 · 1 min read
Japan Economics Update Will negative rates hamper the BOJ’s ability to buy JGBs? With longer-term interest rates falling alongside short-term rates, the introduction of negative rates will not hamper the Bank of Japan’s ability to purchase large amounts of government bonds. Nor... 3rd February 2016 · 1 min read
Japan Economics Update Bank of Japan to cut rates to -1.0% Amid concerns about the sustainability of its large-scale asset purchases, the Bank of Japan now looks likely to rely increasingly on lowering the interest rate on central bank reserves to deliver... 1st February 2016 · 1 min read
Japan Economics Update Further cuts in interest rates likely to be required The introduction of negative interest rates at today’s BoJ meeting will likely be followed by further cuts in coming months. The upshot is that the yen should continue to weaken against the dollar. 29th January 2016 · 1 min read
Japan Economics Update Slowdown in bank lending to continue Today’s Senior Loan Officer Survey showed that loan demand remained subdued last quarter. While the survey has not painted an accurate picture of credit conditions lately, it suggests that the recent... 21st January 2016 · 1 min read
Japan Economics Update Monetary Indicators Monitor (Dec.) The Bank of Japan has eased its collateral rules to free up additional JGBs. However, a shift in the composition of government debt away from Treasury bills and loans towards JGBs is providing a... 13th January 2016 · 1 min read
Japan Economics Update Pick up in part-time earnings not enough Part-time earnings have picked up speed in recent months. But they are still rising at a slower rate than a few years ago and would have to pick up much further in order for the Bank of Japan to meet... 8th January 2016 · 1 min read
Japan Economics Update Economy should have continued to recover in Q4 We took a break at the end of 2015 but Japan’s government statisticians didn’t. This Update recaps the key releases we missed. The main message is that November activity and spending data were weak... 4th January 2016 · 1 min read
