Japan Economics Weekly Who benefits from the recovery in national income? Households have benefitted less from the plunge in energy prices and the surge in overseas investment income than other sectors. With wage growth set to remain subdued, we think that consumer spending... 29th May 2015 · 1 min read
Japan Economics Weekly Boost from net exports to fade next year There are increasing signs that the weak yen is finally curbing demand for imported goods, but the trade deficit should nonetheless widen again next year as consumers bring forward spending ahead of... 22nd May 2015 · 1 min read
Japan Economics Weekly When will housing rents stop falling? Because of its outsized weight in the consumer price basket, housing rent has a significant impact on inflation in Japan. Unfortunately for the Bank of Japan, it seems likely that rent will continue... 15th May 2015 · 1 min read
Japan Economics Weekly Bank of Japan will have to ease more before too long The Bank of Japan’s decision not to step up the pace of easing at the end of April has prompted us to pare back our expectations for yen depreciation in the near term. But we still think that... 8th May 2015 · 1 min read
Japan Economics Weekly Should the BoJ introduce negative interest rates? Negative rates on central bank reserves could be one way to reduce bank lending rates further in Japan. This idea has received some attention in the media recently, but it does not appear to be under... 1st May 2015 · 1 min read
Japan Economics Weekly Has QQE really lifted inflation expectations? In contrast to the Bank of Japan, we are far from convinced that QQE has lifted inflation expectations. In fact, wage and price setting behaviour have changed little since the programme was launched... 24th April 2015 · 1 min read
Japan Economics Weekly Will the use of JGBs as collateral hamper QQE? Around 20% of all Japanese Government Bonds (JGBs) are currently used as collateral with the Bank of Japan or in private repurchase agreements. However, there are various ways to ensure that a... 17th April 2015 · 1 min read
Japan Economics Weekly Re-shoring not as beneficial as widely thought Despite press reports that suggest the opposite, there is no evidence that Japanese firms have returned manufacturing production to their homeland on a large scale. Even if they did, this would be no... 10th April 2015 · 1 min read
Japan Economics Weekly Did Chinese New Year distort Japan’s activity data? The unusually late timing of Chinese New Year may have distorted Japan’s recent activity data by causing a surge in output and exports in January followed by a slump in February. However, firms... 3rd April 2015 · 1 min read
Japan Economics Weekly Why are firms borrowing more? Despite exceptionally strong corporate profits and falling investment, corporate debt increased by the most since 2008 last quarter. With interest costs at record lows, firms seem to be borrowing to... 27th March 2015 · 1 min read
Japan Economics Weekly Shunto pay hikes still too small to lift inflation to 2% The early results from this year’s spring wage negotiations confirm that the tight labour market has boosted wage pressure. However, this year’s overall increase in labour income will likely still... 20th March 2015 · 1 min read
Japan Economics Weekly Overtime hours point to lingering job market slack Judging by the unemployment rate alone, the labour market is tight, vindicating the Bank of Japan’s view that price pressure has strengthened since the launch of QQE. But other measures, such as the... 13th March 2015 · 1 min read
Japan Economics Weekly Export strength unlikely to last There are some reasons to believe that the recent strength in export volumes is the result of improvements in competitiveness linked to currency weakness. However, the trade data tend to be volatile... 6th March 2015 · 1 min read
Japan Economics Weekly Electricity prices to remain high The recent plunge in the price of energy has reduced the cost advantage of nuclear relative to thermal electricity generation, and rendered a rapid restart of Japan’s nuclear reactors increasingly... 27th February 2015 · 1 min read
Japan Economics Weekly Stabilising public debt remains a daunting task The Bank of Japan continues to express confidence in its ability to meet its 2% inflation target. But even that would probably not be enough to reduce the public debt burden. In a best-case scenario... 18th February 2015 · 1 min read
