Japan Economics Weekly Japanese carmakers struggling in decarbonising world The conventional wisdom is that the continued difficulties of Japan’s car industry reflect persistent supply shortages. But there are structural headwinds too as the industry has missed the EV... 2nd December 2022 · 6 mins read
Japan Economics Weekly Discretionary spending cuts hurting service sector While the rebound in inbound tourism is positive for the accommodation and transport sectors, the wider services sector is struggling because households are having to cut back on discretionary... 25th November 2022 · 7 mins read
Japan Economics Weekly Weak yen and COVID not to blame for Q3 GDP fall Q3 saw a surprise contraction in GDP that many media outlets blamed on the surge in virus cases and the slide in the yen’s value during the quarter. We think instead that the real culprits were a... 18th November 2022 · 4 mins read
Japan Economics Weekly Thinner savings rate buffer for spending in Q4 Private consumption remained resilient in the face of the record COVID wave in Q3, suggesting that households have finally learned to live with the virus. We’ve revised up our Q3 spending forecast... 11th November 2022 · 8 mins read
Japan Economics Weekly Strength in business investment won’t be sustained We’re revising up our estimate of Q3 business investment as capital goods shipments surged and firms plan to spend the most on research and development in years. However, with a global manufacturing... 4th November 2022 · 5 mins read
Japan Economics Weekly Public support will push inflation below 2% again The Tokyo CPI’s strength in October has prompted us to lift our forecast for the peak in underlying inflation from 2.5% to 3.0%. However, government support measures announced today mean that headline... 28th October 2022 · 6 mins read
Japan Economics Weekly Japan economy now in fourth place, but not for long With the yen reaching a 14-year low against the euro, we estimate that Germany's GDP has overtaken Japan's in US$-terms. However, as the yen is now more severely undervalued relative to fundamentals... 21st October 2022 · 5 mins read
Japan Economics Weekly MoF winding up for another intervention The yen weakened below its 1998 trough today, with no explicit intervention in response from the Ministry of Finance. That doesn't mean it won't step in again, but it appears to be more concerned... 14th October 2022 · 6 mins read
Japan Economics Weekly BOJ gets a glimpse of wage-price pressures The strongest increase in regular wages in 25 years is an early sign that the virtuous cycle between prices and wages that the Bank of Japan would like to see is starting to materialise. But with... 7th October 2022 · 5 mins read
Japan Economics Weekly Upcoming travel subsidies a flash in the inflation pan The government announced this week that it will once again be providing travel subsidies, this time under the National Travel Discount (NTD) program, from 11th October through December. Prefectural... 30th September 2022 · 7 mins read
Japan Economics Weekly Yen line drawn at 145, BoJ to defend YCC settings While it is uncertain whether policymakers will be able to hold the 145 line in the sand they have drawn for the yen with their intervention on Thursday, we think the Bank of Japan will be able to... 23rd September 2022 · 8 mins read
Japan Economics Weekly Stealth intervention would be costly With the yen falling to a 24-year low against the dollar, the government this week requested exchange rate quotes from the banks which some see as a precursor to intervention. Apart from the Ministry... 16th September 2022 · 5 mins read
Japan Economics Weekly No tightening even if yen stays near 145 Policymakers ratcheted up their verbal intervention as the yen weakened this week but the bar to more direct action is high. We don’t think the Bank of Japan would be too concerned if the yen remained... 9th September 2022 · 6 mins read
Japan Economics Weekly Labour force could be over the hill already The ongoing decline in the size of Japan’s adult population won’t look quite so worrying when the recent revival of immigration starts to be factored in. But the underlying trend has worsened over the... 2nd September 2022 · 5 mins read
Japan Economics Weekly Kishida eager to revive nuclear energy August’s Tokyo CPI showed a further jump in electricity prices. Against this backdrop, PM Kishida announced that he wants to restart more nuclear reactors and build new ones, but it remains unclear... 26th August 2022 · 8 mins read
Japan Economics Weekly Short term productivity outlook is bleak Already sluggish productivity growth has slowed even further since the pandemic, a disappointing result since Japan’s level of productivity remains much lower than in any other G7 economy. Two key... 19th August 2022 · 4 mins read
