Japan Economics Weekly Is the BoJ really running out of assets to buy? We don’t share concerns that the Bank of Japan will soon run into trouble acquiring the ¥80 trillion worth of Japanese Government Bonds it has pledged to buy every year. Admittedly, insurance... 13th May 2016 · 1 min read
Japan Economics Weekly Would a tax on firms’ cash revive investment? The proposed tax on corporate cash holdings may shift firms’ behaviour somewhat but is not as groundbreaking as it sounds. The government already provides tax incentives to encourage investment... 6th May 2016 · 1 min read
Japan Economics Weekly Spare capacity to widen further We now expect Japan’s economy to expand by only 0.5% this year – and that is on the assumption that the government presses ahead with next year’s sales tax hike. If it does, households will bring some... 29th April 2016 · 1 min read
Japan Economics Weekly Is the stronger yen actually a boon for Japan? The recent strengthening of the yen will lower prices of imported goods and provide some support to flagging private consumption. However, lower import prices provide a further headwind to the Bank of... 22nd April 2016 · 1 min read
Japan Economics Weekly Will inflation ever reach 2%? If the government presses ahead with the sales tax hike next year, the chances of hitting 2% inflation on a sustainable basis anytime soon are very slim. Even if the tax hike is postponed, our best... 15th April 2016 · 1 min read
Japan Economics Weekly Yen-strength raises chances of more monetary easing The government has tried to talk down the yen down over last week as the currency has climbed to fresh highs against the dollar. While we still consider intervention in the currency markets unlikely... 8th April 2016 · 1 min read
Japan Economics Weekly Structural factors holding back wage growth Low inflation and the continued expansion in part-time employment are one reason why wage growth is not picking up. However, there are also some structural factors at play. Japan’s lifetime employment... 1st April 2016 · 1 min read
Japan Economics Weekly Resilience of bank profits is bad news for BoJ The conventional wisdom is that the collapse in bond yields since the launch of QQE is undermining bank profits. In reality, though they reached a fresh high last year. Unfortunately this is bad news... 24th March 2016 · 1 min read
Japan Economics Weekly Weak start to spring wage negotiations The early results of the Shunto spring wage negotiations have been disappointing to policymakers hoping to see faster wage gains. The major carmakers and electronics firms have agreed smaller base pay... 18th March 2016 · 1 min read
Japan Economics Weekly Should the Bank of Japan write off its JGB holdings? At first glance, a write-off of the Bank of Japan’s huge JGB holdings offers a simple solution to the country’s debt problem. But it is not clear that such a drastic step would actually help... 11th March 2016 · 1 min read
Japan Economics Weekly Exporters to benefit from renewed yen-weakness We expect GDP growth among Japan’s major trading partners to remain weak this year by past standards, so Japan’s export volumes will remain under pressure. However, if our currency forecasts prove... 4th March 2016 · 1 min read
Japan Economics Weekly Will weak productivity help to reach 2% inflation? Weak productivity developments pose some upside risks to inflation, particularly in services. However, this will be more than offset by the impact of lower consumer import prices on goods inflation... 26th February 2016 · 1 min read
Japan Economics Weekly Will the sales tax hike be postponed yet again? Following the renewed contraction in output last quarter, we are lowering our forecast for GDP growth this year from 1.5% to 1.0%. If domestic demand doesn’t pick up soon, the government may decide to... 19th February 2016 · 1 min read
Japan Economics Weekly What will the Bank of Japan do next? The Bank of Japan unveiled a negative interest rate policy two weeks ago because it concluded that more forceful action was needed to lift inflation. Now, with equities slumping and the yen soaring to... 12th February 2016 · 1 min read
Japan Economics Weekly Will negative rates lower bank lending rates? The introduction of a negative interest rate on a small portion of excess reserves has already reduced corporate bond yields, and we think that banks may also lower lending rates somewhat. However... 5th February 2016 · 1 min read
Japan Economics Weekly Why are Japanese firms struggling in China? The fact that Japanese firms have fared much worse in China than their competitors since the yen started weakening in 2012 suggests that their competitiveness has waned. However, firms have at least... 29th January 2016 · 1 min read
