Japan Economics Weekly Higher defense spending adds to fiscal uncertainty Amidst a severe sell-off in global stock markets, bond investors have shrugged off the government’s plan to lift defence spending significantly over the coming years. While the immediate consequences... 6th November 2026 · 4 mins read
Japan Economics Weekly Decline in public debt to GDP ratio has further to run Japan’s ratio of gross government debt to GDP fell has fallen 200% for the first time since 2017 as the return of inflation has resulted in a strong improvement in the budget balance and boosted... 30th October 2026 · 4 mins read
Japan Economics Weekly RENGO pushing for another large Shunto pay hike With the energy cost shock barely making a dent in Japan's trade balance and corporate profits going from strength to strength, trade unions are demanding another strong pay hike in next year's spring... 23rd October 2026 · 4 mins read
Japan Economics Weekly PPI weakness masks persistent price pressures September’s decline in producer prices should not be interpreted as evidence that inflation is fading. The fall was driven by a handful of idiosyncratic factors, while a closer look at the data... 16th October 2026 · 4 mins read
Japan Economics Weekly JGB sell-off may have run its course The 10-year JGB yield has levelled off over the last couple of weeks even as yields elsewhere have surged to multi-year highs. While our fiscal trackers suggest that growth in government spending has... 9th October 2026 · 4 mins read
Japan Economics Weekly Upside risks to our interest rate forecasts are growing The data released this week vindicate the Bank of Japan’s concerns about upside risks to inflation and we expect the Bank to keep hiking rates once every quarter. With few signs that higher interest... 2nd October 2026 · 5 mins read
Japan Economics Weekly Japan can sustain a 10-year JGB yield above 3% The rise in the 10-year JGB yield to more than 3% this week is concerning as that benchmark is now higher than our long run forecast for Japan’s nominal GDP growth. However, for now we aren’t overly... 25th September 2026 · 5 mins read
Japan Economics Weekly Fiscal loosening need not spell trouble Japan's fiscal stance is turning more expansionary, but we think concerns about the public finances are overdone. The budget deficit is likely to remain contained, while both gross and net debt ratios... 18th September 2026 · 4 mins read
Japan Economics Weekly Stronger inflation points to further yen gains This week’s producer price and wage data show that inflationary pressure in Japan remains firm. That should set the stage for the Bank of Japan to pick up the pace of policy tightening. Meanwhile, the... 11th September 2026 · 5 mins read
Japan Economics Weekly Japanese firms continue to weather energy shock The Japanese economy has continued to shrug off the energy shock. Corporate profit margins rose to a record high in Q2, while industrial production held up well in July as supply shortages eased. That... 4th September 2026 · 5 mins read
Japan Economics Weekly BoJ unwilling to toe government’s line The regular budget for FY2027 will probably include the largest increase in spending since the early 1990s. However, this partly reflects the government’s aim to incorporate spending previously... 28th August 2026 · 5 mins read
Japan Economics Weekly Economy shrugging off higher energy costs Japan’s economy didn’t expand as strongly as most had anticipated in Q2, but with crude oil imports normalising, downside risks to economic activity are diminishing. Indeed, amidst mounting signs of... 21st August 2026 · 4 mins read
Japan Economics Weekly Stars are aligning for a September BoJ hike The Bank of Japan’s July Summary of Opinions suggests that the Board is increasingly open to stepping up the pace of tightening. With producer and import-price data pointing to persistent and broad... 14th August 2026 · 6 mins read
Japan Economics Weekly FX Intervention won’t fix Japan’s credibility problem Joint US-Japan intervention provided some initial support to the yen. However, the currency has since given back some of its gains, and we don’t believe official purchases can substitute for a... 7th August 2026 · 4 mins read
Japan Economics Weekly Sales tax suspension adds to fiscal concerns While the government’s decision to press ahead with lowering the sales tax on food next year will reduce headline inflation sharply, we don’t think it will have major consequences for the outlook for... 31st July 2026 · 5 mins read
Japan Economics Weekly Fiscal loosening has further to run Our fiscal tracker shows a marked acceleration in public spending since PM Takaichi came to power. While we expect the budget deficit to remain very low this year as spending growth has yet to surpass... 24th July 2026 · 5 mins read
