Filtered by Subscriptions: Japan Economics Use setting Japan Economics
While Japan has close economic ties to both the US and China, it shouldn’t be too badly affected if the trade dispute between them heats up. Perhaps the main concern is that a trade war would cause the yen to strengthen as a safe haven. But the currency’s …
22nd June 2018
The manufacturing PMI was little changed in June and still points to robust gains in industrial output. And the recent surge in crude oil prices is boosting price pressures. … Flash Manufacturing PMI …
While a pick-up in energy and fresh food prices lifted inflation in May, underlying inflation weakened further and remains far below the Bank of Japan’s 2% target. … Consumer Prices …
Despite rapid growth, sales of second-hand goods remain too low to constitute a major threat to retailers. Their rising popularity reflects the increased convenience of electronic platforms rather than concerns over falling incomes and higher cost …
19th June 2018
Even though today’s trade data show a jump in imports in May, we still think that net trade supported GDP growth in the current quarter. … External Trade …
18th June 2018
The Bank of Japan has recently been expressing greater concern about the impact of ultra-loose monetary policy on financial stability. But Governor Kuroda today insisted that the key focus of policy must remain on lifting inflation expectations and …
15th June 2018
Corporate profits have more than doubled since Prime Minister Abe returned to power. We think that this reflects a reduction in cross-shareholdings since the late 1990s and improvements in corporate governance. The prolonged rise in profits suggests that …
14th June 2018
Headline inflation has been falling recently as the impact of the short-lived spike in food prices over the winter has reversed. Energy inflation has continued to slow as utility bills are rising less rapidly and the recent surge in crude oil prices has …
12th June 2018
Concerns about financial stability seem to have become more widespread on the Policy Board. But inflation remains far below the 2% target and the prospect of a renewed slowdown in domestic demand after next year’s sales tax hike will prevent policymakers …
11th June 2018
The surge in machinery orders in April is yet another sign that the drop in Q1 GDP was just a blip. The bigger picture is that firms are facing severe capacity constraints so investment spending should remain a key growth driver this year. … Machinery …
The slump in the share of young women that are married combined with the delay when women have their first child suggest that the fertility rate may at best rise from the current 1.4 to around 1.5. Even so, the working-age population would still fall by …
8th June 2018
Revised data show that Japan’s economy expanded a little faster in recent quarters than initially reported. But the economy is running into capacity constraints and we expect growth to slow this year. … GDP (Q1 …
The slowdown in wage growth in April was driven by volatile bonus payments, whereas base pay kept growing at the strongest pace in two decades. But wages would still have to grow much faster to meet the Bank of Japan’s 2% inflation target. … Labour Cash …
6th June 2018
While household spending was weak in April, the jump in retail sales suggests that private consumption returned to growth this quarter. … Household Spending …
5th June 2018
The Bank of Japan seems to be getting more concerned about the impact of low policy rates on financial stability. However, the financial system is neither unwilling to provide credit nor is credit growing at an unsustainable pace. And with inflation …
1st June 2018
Today’s capital spending confirmed that investment was sluggish last quarter and suggest that we won’t see major revisions in the second estimate of Q1 GDP. … Capital Spending …
Industrial production didn’t rise as much in April as most had anticipated. But the economy should still have returned to growth this quarter. … Industrial Production …
31st May 2018
Today’s consumer confidence survey suggests that wage and employment growth will slow. Still, sentiment edged up marginally in May and points to a rebound in consumer spending. … Consumer Confidence …
30th May 2018
The jump in retail sales in April suggests that consumer spending started to expand again in the current quarter. The weakness at the start of the year implies that private consumption won’t grow by much more than 0.5% this year but the outlook is …
Even though employment growth slowed a bit in April, it remains unrealistically high. Meanwhile, the jobless rate stayed at 2.5% and it will probably edge a little lower over the coming months. … Labour Market …
29th May 2018
The imposition of high tariffs on car imports that the US is considering would have a palpable impact on economic activity in Japan. This may be another empty threat by the Trump administration, but if they followed through, Japan would almost certainly …
25th May 2018
New projections suggest that social security spending could rise by 8% of GDP by 2040. The government has already increased social security contributions in recent years and there is some scope to increase them further. By contrast, sizeable hikes to …
The continued moderation in inflation in the capital region underlines that the Bank of Japan won’t be able to tighten monetary policy anytime soon. … Tokyo CPI …
On some measures, Japan has been the strongest performing large developed economy over recent years. Growth has been unusually fast, unemployment is at historic lows and wage growth at two-decade highs. For all this though, the Bank of Japan remains a …
23rd May 2018
Even though the manufacturing PMI fell to a fresh low in May, we still think that the economy returned to growth this quarter. Meanwhile, the recent strength in crude oil prices is boosting price pressures. … Flash Manufacturing PMI …
The BoJ could continue buying ETFs at the current pace for a long time since its purchases are small relative to the size of the stock market. But the Bank reckons that the stock market is now close to being overheated so a gradual reduction in the volume …
22nd May 2018
Some of the rebound in trade values in April reflects higher export and import prices. The key point though is that export volumes continue to outpace import volumes. … External Trade …
21st May 2018
The fall in GDP last quarter should be followed by a rebound in activity in the current quarter. But with the economy running into capacity constraints, our view remains that growth will slow this year. … Weaker Q1 sets the tone for …
18th May 2018
The recent jump in crude oil prices will give a significant lift to inflation in Japan, taking it somewhat closer to the Bank of Japan’s target, but only for a short while. For a large net energy importer, higher prices are inevitably a headwind to …
Most of the slowdown in inflation in April was driven by volatile fresh food prices. But the moderation in underlying inflation underlines that the Bank of Japan’s 2% inflation target remains out of reach. … Consumer Prices …
We already know that business investment was little changed last quarter. As such, we wouldn’t read too much into the fall in machinery orders in March. The bigger picture is that firms are facing mounting capacity shortages so investment spending will …
17th May 2018
We wouldn’t read too much into the contraction in GDP last quarter. After all, trend growth in Japan is low and the drop in output followed eight consecutive quarters of expansion, the longest stretch in three decades. The available data suggest that …
16th May 2018
The longest period of uninterrupted expansion since the late 1980s came to an end last quarter and we think that the economy won’t expand as much this year as it did in 2017. … GDP (Q1 …
Purchases of government bonds by the Bank of Japan have stabilised over the past six months. But the rate at which its holdings are growing has continued to slow as its bonds are now maturing at a rapid rate. Our view remains that the Bank’s holdings of …
14th May 2018
Investment in IT equipment and infrastructure has fallen in recent years and there has been no push to raise the low level of university enrolment in related subjects. Still, the country’s ICT infrastructure is excellent, investment remains higher than in …
11th May 2018
The Economy Watchers Survey was little changed in April and points to a further slowdown in consumer spending and sluggish industrial activity. … Economy Watchers Survey …
10th May 2018
The surge in base pay in March underlines that the tight labour market is now generating noticeable cost pressures. However, it will still take a few more years before wage growth is strong enough to meet the Bank of Japan’s 2% inflation target. … Labour …
9th May 2018
The fall in household spending in March suggests that private consumption dipped last quarter. And with other areas of demand broadly flat, we reiterate our forecast that GDP contracted by 0.1% q/q last quarter. … Household Spending …
8th May 2018
The continued slowdown in bank lending seems to vindicate the Bank of Japan’s concerns that low policy rates are undermining financial intermediation. But broader measures of credit availability suggest that firms’ ability to raise funds has rarely been …
4th May 2018
Population ageing explains little of the recent slowdown in productivity growth. And with the pace of greying not picking up any further, we expect productivity growth to rebound to 1% per annum over the coming years. … Ageing unlikely to lower …
We suspect that the recent deterioration in consumer sentiment reflects the impact of rising food prices. Either way, the survey still points to a rebound in spending on durable goods. … Consumer Confidence …
2nd May 2018
The Bank of Japan today refrained from providing a concrete timeframe for hitting its 2% inflation target for the first time since Governor Kuroda took over. This highlights that policymakers have little confidence in their lofty inflation projections and …
27th April 2018
An increase in hedging costs has undermined the appeal of investing in US$ bonds for Japanese investors. This won’t affect the profitability of banks much as their holdings of foreign bonds are small. It presents a bigger headache for insurance firms, …
The slump in industrial production last quarter suggests that GDP shrank in Q1. Meanwhile, price pressures have started to moderate again even though the labour market remains very tight. … Labour Market & Ind. Prod. (Mar.) & Tokyo CPI …
The unusual strength of wage growth in Japan has attracted attention recently. But the main development at the upcoming Bank of Japan meeting is likely to be another reduction in the Board’s forecast for inflation, underlining that policy tightening …
24th April 2018
The manufacturing PMI suggests that activity in the sector remains healthy but firms are getting increasingly concerned about the outlook for external demand. … Flash Manufacturing PMI …
23rd April 2018
The tight labour market is now boosting wage growth but not by enough to generate significant inflation. With the economy likely to slow this year, the Bank of Japan won’t be able to tighten policy anytime soon. … Policy tightening still a distant …
20th April 2018
Inflation ended the last fiscal year well below the Bank of Japan’s forecast for the current fiscal year and the Bank will have to lower its projections yet again. … Consumer Prices …
Distortions related to the Lunar New Year unwound in March, but we estimate that net trade still turned into a drag on GDP growth last quarter. … External Trade …
18th April 2018
US President Trump has once again sown confusion by indicating that the US may still join the Trans Pacific Partnership. However, he indicated that this would require a renegotiation of the agreement, which looks unlikely. We think that the US will …
13th April 2018
