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Japan External Trade (Aug. 2021)

Today’s trade figures suggest that export volumes kept rising and we think that Japan’s focus on cars and machinery means that they will hold up better than in other Asian economies.
Marcel Thieliant Senior Japan, Australia & New Zealand Economist
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Japan Economics Weekly

Virus fears waning, Bank of Japan plans could change

We doubt that the spike in mobility during Golden Week is a harbinger of a rapid rebound in consumer spending. Mounting concerns about rising living costs and lingering virus fears among the elderly will keep the savings rate well above pre-virus levels. Meanwhile, the Bank of Japan this week ruled out widening the tolerance band around its 10-year yield target. However, markets remain unconvinced as yields continue to trade close to the ceiling of the band. We still expect the Bank to come under renewed pressure to defend the target, eventually forcing it to widen the tolerance band.  

13 May 2022

Japan Economics Update

Large pot of pandemic savings to collect dust

The hit to household incomes from higher inflation will be much smaller in Japan than elsewhere and consumers have plenty of pandemic forced savings to tap into to sustain spending. But we nonetheless expect the rebound in consumption to disappoint over the coming months as consumers are spooked by rare price hikes to everyday items and some remain wary of catching the virus. China Drop-In (12th May, 09:00 BST/16:00 SGT): Join our China and Markets economists for a 20-minute discussion about near to long-term economic challenges, from zero-COVID disruptions to US-China decoupling. Register now.

11 May 2022

Japan Data Response

Japan Labour Cash Earnings (Mar. 22)

Nominal wage growth stayed at 1.2% in March and we think it could touch 2% over the coming months as overtime and bonus payments get back to their pre-virus levels. But with base pay growth still weak, we think overall wage growth will fall back to 1% before long. China Drop-In (12th May, 09:00 BST/16:00 SGT): Join our China and Markets economists for a 20-minute discussion about near to long-term economic challenges, from zero-COVID disruptions to US-China decoupling. Register now.

9 May 2022

More from Marcel Thieliant

Australia & New Zealand Economics Update

Australia- What to expect from a monetary policy review

We doubt that any independent review of Australia’s monetary policy framework would result in a change to the RBA’s 2-3% inflation target. But the Bank could be forced to put more emphasis on house prices, reduce the frequency of Board meetings, and strengthen the role of external Board members.

15 September 2021

Japan Economics Weekly

Light at the end of the tunnel

High frequency data suggest that the Delta wave resulted in a renewed weakening in consumer spending in recent weeks. And given that the government this week extended the state of emergency in the largest prefectures to end-September, we’ve pencilled in a drop in consumption across Q3. However, new virus cases are now plunging, which should ease pressure on the medical system. What’s more, nearly half of the population is now fully vaccinated and the government indicated that it will ease restrictions by November even in prefectures under a state of emergency. The upshot is that consumption should rebound strongly in Q4.

10 September 2021

Australia & New Zealand Economics Update

RBA may only hike in 2023

While the RBA pressed ahead with tapering its asset purchases today, the financial markets are too optimistic in pricing in rate hikes as soon as next year.

7 September 2021
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