Japan Economics Update 2% inflation if Russian energy flows disrupted A spike in energy prices caused by significant disruption to Russian exports would lift Japanese inflation to 2% from April until the end of this year. However, the BoJ wouldn’t respond by lifting its... 23rd February 2022 · 4 mins read
Japan Economics Update What would a 5-year yield target mean for Japan? If the Bank of Japan shortened the duration of its yield target, the impact on economic activity and inflation would probably be small but it could improve the long-term health of insurers and pension... 22nd February 2022 · 4 mins read
Japan Economics Update Prolonged border closure could lift labour costs With economic activity still depressed by recurrent virus waves, the sharp slowdown in immigration to Japan has yet to put much upwards pressure on wages. However, looking ahead we think some sectors... 9th February 2022 · 2 mins read
Japan Economics Update Manufacturing profit margins set to reach record-high Soaring input prices have kept profit margins of manufacturers below their pre-virus peak even as those of services firms have hit record highs. However, manufacturers will catch up before long. 6th February 2022 · 2 mins read
Japan Economics Update BoJ unlikely to lift interest rates anytime soon The Bank of Japan today upgraded its assessment of inflation risks to “broadly balanced” for the first time since 2014. However, it reiterated its pledge to keep expanding the monetary base until... 18th January 2022 · 3 mins read
Japan Economics Update Key calls for 2022 We expect GDP to return to its pre-virus path in the second half of the year as services spending finally returns to near-normal. However, the risks to that forecast remain tilted to the downside as... 5th January 2022 · 4 mins read
Japan Economics Update BoJ won’t join hawkish shift by other central banks While central banks elsewhere are becoming increasingly hawkish, the Bank of Japan kept policy loose today and is set to remain among the most dovish central banks for the foreseeable future. 17th December 2021 · 3 mins read
Japan Economics Update Participation rate set to fall further The pandemic has brought a halt to the last decade’s rise in Japan’s participation rate which had allowed the labour force to expand despite challenging demographics. Any post-pandemic recovery is... 6th December 2021 · 5 mins read
Japan Economics Update Bank of Japan not losing control of money market Media reports that suggest that the Bank of Japan is losing control of short-term interest rates due to its “Special Deposit Facility” encouraging banks to park reserves at the BoJ are wide of the... 22nd November 2021 · 3 mins read
Japan Economics Update Virus caution by the elderly not a big downside risk Continued caution by the elderly is a downside risk to our upbeat forecasts for private consumption, but we’re already assuming that households won’t return to their old ways anytime soon. 3rd November 2021 · 2 mins read
Japan Economics Update Fiscal policy will continue to support the recovery The supplementary budget that PM Kishida will compile by year-end will probably contain only half as much fiscal support as was provided last year. However, given that government spending will still... 1st November 2021 · 3 mins read
Japan Economics Update Policy tightening still a distant prospect The Bank of Japan shocked no one in keeping its interest rate targets unchanged today, a status quo we think will last for years. The Bank also revised down its growth forecasts for the current fiscal... 28th October 2021 · 3 mins read
Japan Economics Update Rising prices won’t prevent rebound in consumption The weaker yen and higher energy prices will reduce the purchasing power of households a bit. But with the household savings rate still very high, this won’t prevent a strong rebound in services... 26th October 2021 · 2 mins read
Japan Economics Update Why is inflation still so low in Japan? The continued weakness in Japan’s inflation is partly due to the recent plunge in mobile phone tariffs and the long lags between global energy prices and household utility bills. Indeed, inflation is... 12th October 2021 · 4 mins read
Japan Economics Update What does Kishida’s victory mean for Japan? Incoming PM Kishida has provided mixed signals on fiscal policy, pledging a large near-term stimulus while retaining ambitious medium-term consolidation plans. Given that he blamed deregulation for... 29th September 2021 · 4 mins read
Japan Economics Update Japan’s LNG shielded from Europe price spike for now Japan’s reliance on fixed, long-term contracts for its natural gas supply should limit the impact on consumers of the recent surge in gas spot prices currently being felt most acutely across parts of... 22nd September 2021 · 2 mins read
