Japan Economics Weekly Might the labour market be looser than it appears? There is a plausible argument that widespread “underemployment” of employees who would like to work longer hours means that labour market conditions in Japan are not as tight as the historically-low... 29th March 2018 · 1 min read
Japan Economics Weekly Escaping demographic destiny The conventional wisdom is that population ageing results in a falling savings rate and rising interest rates. Yet Japan, despite the high average age of its population, runs a sizeable current... 23rd March 2018 · 1 min read
Japan Economics Weekly Sluggish wage growth to prevent BoJ from tightening We wouldn’t read too much into the early results of this year’s spring wage negotiations, which showed that the large carmakers and electronic firms lifted base pay by less than in 2014 and 2015. But... 16th March 2018 · 1 min read
Japan Economics Weekly Yen strength another stumbling block for BoJ The yen would have to strengthen much further before it turns into a major drag on export competitiveness and corporate profits. However, the recent appreciation should bring the pick-up in goods... 9th March 2018 · 1 min read
Japan Economics Weekly Is this it? Dismal industrial production and weak consumer spending figures for January suggest that Japan’s longest period of uninterrupted expansion since the late 1980s will come to an end this quarter. We... 2nd March 2018 · 1 min read
Japan Economics Weekly Is the BoJ’s 2% inflation target achievable? On past form, capacity shortages alone will never be enough to generate 2% inflation in Japan. The prerequisite for faster price gains is that inflation expectations among households and firms also... 23rd February 2018 · 1 min read
Japan Economics Weekly Why are regional banks’ capital ratios falling? If the Bank of Japan were to reverse course on monetary loosening in the near future, it would more likely be a response to worries about financial stability than high inflation. The recent... 14th February 2018 · 1 min read
Japan Economics Weekly Market turmoil won’t derail expansion The recent sell-off on the stock market would have to continue for much longer before it started to have a major effect on consumer spending in Japan. And with the yen barely changed, the impact on... 9th February 2018 · 1 min read
Japan Economics Weekly Growth still likely to slow this year With our GDP tracker suggesting that activity continued to expand at a rapid clip last quarter, risks to our forecast of a 1.2% rise in GDP this year are skewed to the upside. However, the economy is... 2nd February 2018 · 1 min read
Japan Economics Weekly Would Japan benefit from higher interest rates? Some commentators have been arguing that the Bank of Japan should be raising interest rates now to support household incomes. However, it isn’t clear whether this would boost household spending, while... 26th January 2018 · 1 min read
Japan Economics Weekly Oil at $70 won’t result in policy tightening We expect the price of Brent crude oil to moderate from $70 per barrel to $55 by the end of 2018. But even if global oil prices remain close to current levels, inflation in Japan would only average 1%... 19th January 2018 · 1 min read
Japan Economics Weekly How fast will the BoJ reduce its asset purchases? A reduction in the size of the BoJ’s JGB auction moved markets this week. This wasn’t policy tapering in an effort to reduce stimulus: the Bank now only buys what is needed to maintain the yield... 12th January 2018 · 1 min read
Japan Economics Weekly “Record” budget masks continued fiscal tightening While the budget for the coming fiscal year foresees record spending, expenditure will only rise marginally and revenues may climb even faster. The upshot is that the government is set to proceed with... 5th January 2018 · 1 min read
Japan Economics Weekly What could be done to lower private surpluses? Unless private sector surpluses fall, the planned increase in the sales tax in 2019 will result in weaker domestic demand. Incentives to increase investment spending or lift dividend payments would... 21st December 2017 · 1 min read
Japan Economics Weekly What to expect in 2018 We expect Japan’s GDP growth to slow next year as the economy is now operating above capacity. Price and wage pressures should strengthen somewhat but inflation will remain well below the Bank of... 15th December 2017 · 1 min read
Japan Economics Weekly Has the unemployment rate reached a floor? The jobless rate has been effectively flat since February despite continued strong growth in the economy. The economy is now close to full employment which suggests that wage growth will continue to... 8th December 2017 · 1 min read
