Japan Economics Weekly High cash levels unlikely to trigger investment boom Japanese firms have accumulated record amounts of cash and the conventional wisdom is that it is only a matter of time before this triggers a surge in investment. Our view, in contrast, is that... 28th October 2013 · 1 min read
Japan Economics Weekly More FDI could significantly boost productivity Japan’s stock of inward FDI is by some way the lowest in the OECD, reflecting a strict regulatory regime and administrative barriers at the local level. With foreign firms significantly more... 21st October 2013 · 1 min read
Japan Economics Weekly Further yen weakness and Nikkei strength ahead Japanese equities are among the most vulnerable to the fall-out from a potential US government default. What’s more, profit margins are already close to record highs, and the pass-through of earlier... 14th October 2013 · 1 min read
Japan Economics Weekly Deficit target unlikely to be reached The decision to go ahead with the first consumption tax hike next year is an important step towards improving Japan’s public finances. But the government will have to go further to have a chance of... 7th October 2013 · 1 min read
Japan Economics Weekly Credibility at risk despite likely consumption tax hike The key event this week will be the government’s decision whether or not to raise the consumption tax as planned next April, which should be announced after the release of the Q3 Tankan survey on... 30th September 2013 · 1 min read
Japan Economics Weekly Who is benefitting from Abenomics? Abenomics is widely heralded as a boon to Japanese society, but the benefits are not being felt evenly. Companies are reporting healthy profits and business confidence remains strong, while the equity... 23rd September 2013 · 1 min read
Japan Economics Weekly To what extent is the weak yen pushing up inflation? The return of inflation has been welcomed by many – although not by Japanese consumers – as an early success for “Abenomics”. In reality there is little behind the increases in the CPI other than the... 16th September 2013 · 1 min read
Japan Economics Weekly Why is regular pay not picking up? Despite improving economic conditions, which include the unemployment rate dropping to fresh cyclical lows, nominal wages excluding bonuses and overtime payments have continued to fall. One reason is... 9th September 2013 · 1 min read
Japan Economics Weekly Spare capacity diminishing but still large On balance, the available evidence suggests that spare capacity remains ample. While the falling unemployment rate points to a tightening labour market, wage growth is weak. The output gap is still... 2nd September 2013 · 1 min read
Japan Economics Weekly Yen weakness helps to stabilise current account Investors tend to focus on visible trade when analysing the impact of the weak yen on the current account. The impact on investment income tends to be ignored, even though it is more immediate. Since... 26th August 2013 · 1 min read
Japan Economics Weekly More investment needed to maintain capital stock Business investment has been a clear laggard in Japan’s recovery. Structural factors, including a high level of investment compared to other countries and a large rise in the capital/GDP ratio since... 19th August 2013 · 1 min read
Japan Economics Weekly Yen weakness is not a panacea The conventional wisdom is that a weak yen should help boost the competitiveness of Japanese exports. However, most exports are invoiced in foreign currency, and exporters have been reluctant to lower... 12th August 2013 · 1 min read
Japan Economics Weekly Tampering with the sales tax hike carries risks China’s economy is set to slow further over coming years but we believe that the slump in growth many are now predicting will be avoided. 5th August 2013 · 1 min read
Japan Economics Weekly Is the housing market set to take off? Housing construction should give a boost to the wider economy over coming quarters as low mortgage interest rates support property demand. But Japan’s property market is approaching a turning point... 29th July 2013 · 1 min read
Japan Economics Weekly Would consumption tax hikes derail the recovery? The economic case for raising Japan’s consumption tax is overwhelming. We think the government will decide to go ahead with the first hike planned for April next year, provided GDP has not slowed too... 22nd July 2013 · 1 min read
Japan Economics Weekly Households unlikely to welcome higher inflation Inflation expectations have jumped since the Bank of Japan’s announcement of more aggressive easing in April. Higher inflation should be beneficial for borrowers as it will erode the real value of... 15th July 2013 · 1 min read
