Our Japan Chart Pack has been updated with the latest data and our analysis of recent developments.
GDP has fallen for two consecutive quarters but we don’t think the economy is in recession and should return to growth this year. While the gap between nominal wages and inflation is closing fast, the wage-price virtuous cycle will receive a boost when inflation rebounds early this year. We think the Bank of Japan will want to wait to see the results of the February CPI before hiking rates, so we now think negative rates will be lifted in April.
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