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Tankan (Q4 2021)

The Q4 Tankan survey showed that the services sector has started to narrow the gap relative to manufacturing and we think that process has further to run.
Marcel Thieliant Senior Japan, Australia & New Zealand Economist
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More from Japan

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 Weekly

Federal fiscal resilience masks state weakness

Treasurer Josh Frydenberg will gloat when he unveils in the upcoming Mid-Year Fiscal and Economic Outlook that the federal deficit will be smaller in 2021/22 than expected despite the recent Delta wave. However, the bulk of the support during the lockdowns was provided by the states and their budget deficits widened sharply last quarter. With their revenue base more narrow and debt levels set to keep rising for years, state government bond spreads will keep edging up as the RBA winds down its bond purchases.

10 December 2021

Australia & New Zealand Economics Update

Australia moving closer to digital Aussie dollar

The Reserve Bank of Australia and the Australian government are keen to explore the benefits of a retail central bank digital currency. But with pilot projects yet to start, we doubt that an eAud will be launched before the middle of this decade.

9 December 2021

Australia & New Zealand Economics Update

RBA to hike rates by less than markets anticipate

The RBA still sounded dovish when it kept policy unchanged policy. We think that rates will rise earlier than the Bank anticipates but later and by less than what the financial markets price in.

7 December 2021
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