Our Japan Chart pack has been updated with the latest data and our analysis of recent developments.
GDP growth should rebound modestly in the fourth quarter but we expect it will remain soft in 2024. Meanwhile, weak job openings data suggests the labour market should loosen slightly in the short term. However, there are mounting signs that a virtuous cycle between wages and prices is gathering momentum. While inflation is now slowing, price pressures are increasingly broad-based as services inflation is hitting multi-decade highs. This should give the Bank of Japan confidence to proceed with full-scale monetary tightening next year.
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