Filtered by Subscriptions: Japan Economics Use setting Japan Economics
Retail sales have almost recovered to their pre-disaster level, but are unlikely to remain strong. Overall, sales are on a downward trend which is set to continue as unemployment rises and wages fall. SMEs, in contrast, are more optimistic about the …
29th June 2011
According to Ministry of Finance, Japan runs a trade deficit with China. However, when one looks at the trade data from a Chinese standpoint, it appears that China is also running a trade deficit with Japan. Some inconsistency in international trade data …
28th June 2011
Some of the recent economic data have supported hopes of V-shaped rebound in Japan after the March earthquake. However, power shortages will still hold back the recovery, especially in Q3 when electricity demand is at its highest. … The earthquake, …
24th June 2011
The economy weakened further at the start of the second quarter, although signs abound that a pick-up is just around the corner. Businesses are restoring production more quickly than was expected even if not soon enough to show in April’s official data. A …
23rd June 2011
The Bank of Japan appears to be timing its purchases of equity ETFs to support the stock market whenever the Topix falls by more than 1%. However, developments in global markets, and in the yen, remain far more important in determining the performance of …
21st June 2011
May's trade data suggest that the external sector was an even larger drag on Japan's GDP in Q2 than in Q1, but a closer look shows further signs of recovery from March's earthquake on a month by month basis. … External Trade …
The submission to the Diet of a second supplementary budget in early July is not expected to have a large impact. The macroeconomic effects of the additional budget are likely to be small, and it is unlikely to make much difference to the government’s …
Core machinery orders dipped in April but are expected to rebound over the rest of the second quarter. This is consistent with other evidence that the Japanese economy will return to growth in the second half of the year. … Machinery Orders …
14th June 2011
Deliberately embracing higher inflation as a way out of the sovereign debt crisis could have disastrous consequences. Instead, for most advanced countries, wherever it is feasible, a combination of fiscal austerity and sustained economic growth offers the …
Overall bank lending is likely to increase over the rest of the year, but this would not necessarily be a sign of underlying economic strength. We expect business loan demand to rise as the weak economic climate has reduced firms’ main source of internal …
This week the IMF added its voice to those calling for further monetary easing from the Bank of Japan. However, the Policy Board seems more likely to upgrade its own assessment of the state of the economy at the two-day meeting that concludes on Tuesday. …
11th June 2011
The second estimate of Q1 GDP was essentially unchanged though the contraction in Q4 last year was revised up a notch. This confirmed that the Japanese economy is in recession. GDP will likely contract at least as much again in Q2 before a recovery gets …
9th June 2011
Japan’s current account surplus fell further in April, supporting what we already knew about the effect of the disaster on trade. Survey-based evidence suggests things are turning around with improvements already evident in May, including a rapid recovery …
8th June 2011
Japan’s automotive industry was, as we know, hit extremely hard by the March earthquake. Domestic demand collapsed while overseas sales shrank due to a shortage of supply. But both these constraints appear to unwinding and the automotive industry looks to …
6th June 2011
Japan’s DPJ-led administration finally seems ready to bow to the inevitable and double the country’s consumption tax over the next five years. However, this might not be enough to pay for the government’s share of reconstruction spending after the Great …
2nd June 2011
Japanese industry appears to be overcoming the initial disruption caused by the earthquake. Industrial production started to recover in April and is expected to rebound through May and June. The labour market, however, is only just starting to feel the …
31st May 2011
Japan's smaller firms continue to be hit hard by the fallout from March's earthquake. Business conditions did improve in May relative to April's post-disaster low and are expected to recover further in June, but they remain relatively poor. The detail of …
30th May 2011
Employment and wages are bound to be much slower to respond to the Great East Japan Earthquake than either production or sales, but the business and consumer surveys suggest that the labour market will weaken significantly in the months ahead. This will …
Japanese consumer price inflation increased in April, rising at its fastest rate in two years. Higher utility and gasoline prices helped push the all items rate of inflation into positive territory, but it was base effects in education costs that …
27th May 2011
Japan registered her first seasonally-adjusted trade deficit in two years in April. Exports not only failed to increase after the initial disruption caused by the earthquake but also fell further, while imports regained the ground they lost in March. It …
25th May 2011
The sharp contraction in activity in March tipped Japan into recession in Q1. The effect on GDP growth will be more acute in Q2 due to the very low base from which the economy must recover. Even if economic activity is around 3% higher on average in the …
23rd May 2011
Even though Deputy Governor Kiyohiko Nishimura today dropped his call for another increase in the asset purchases, our view is still that it is only a question of “when”, rather than “if”, the Bank of Japan eases policy again. … Bank of Japan to announce …
20th May 2011
The detrimental impact of the earthquake and tsunami in March was sufficient to tip Japan into recession in the first quarter. Early evidence for the start of the second quarter shows no sign of a meaningful recovery, supporting our view that GDP will …
The further contraction in GDP in Q1 confirms that Japan is now in recession and we expect the decline in Q2 to be even bigger. The economy was weak before the Great East Japan Earthquake struck on 11 th March and the full impact of that catastrophe has …
19th May 2011
The index of consumer confidence declined further in April as households’ assessment of conditions over the next six months darkened. April’s fall was even larger than the one seen in March, and pushed the headline index to its lowest level in two years. …
16th May 2011
The week ahead will be dominated by the release of Q1 GDP on Thursday, which is almost certain to show the 11th March earthquake tipped the Japanese economy into recession. The low starting point will also make it extremely hard for the economy to grow …
Respondents to Japan’s Economy Watchers Survey are not as pessimistic about the outlook as they were immediately after the disaster in March, but confidence is still relatively low and there is no sign of a meaningful rebound in current conditions in …
12th May 2011
The attractiveness of the PMI surveys lies in their ability to provide an accurate and timely assessment of business conditions. Shocks to the Japan economy, such as the financial crisis and the recent earthquake, have not diminished their usefulness, but …
9th May 2011
Much of our recent coverage of the Japanese economy has been distinctly gloomy, summed up in our forecast that GDP will fall outright this year. This view has been supported by the recent activity data. Nonetheless, with the holiday spirit in mind, it is …
2nd May 2011
The impact of the recent disaster has all but guaranteed that the economy will contract for a second successive quarter in Q1. Releases for March show plunging output, activity and spending, while business and consumer confidence has collapsed. What’s …
28th April 2011
The revised growth forecasts published today by the Bank of Japan’s Policy Board do not, in our opinion, adequately reflect the damage caused by the recent natural disaster. This is probably due to a mix of conservative working assumptions, genuine …
Japanese retail sales plunged in March as consumers reined in spending following the devastating earthquake and tsunami. Despite a strong start to the quarter, sales fell at an annualised rate of 1.3% in Q1, providing further evidence that the economy has …
27th April 2011
The Bank of Japan’s Policy Board is certain to cut its GDP forecasts for the current fiscal year on Thursday, but not, we think, by enough to reflect the full impact of the recent disaster. Nor are the revisions likely to be sufficiently large to prompt a …
26th April 2011
The Shoko Chukin survey of small business conditions in April was released a day earlier than expected, and the results were even worse than projected. The earthquake has clearly taken a heavy toll on business confidence and no industry has been immune. …
In the six weeks since the earthquake, largely survey-based evidence has pointed to a sharp downturn in activity and sentiment in March. A flurry of official data before the Golden Week holidays begin will help provide a more concrete assessment of how …
25th April 2011
Japanese trade took a sharp turn for the worse in March after the earthquake and tsunami disrupted production and damaged infrastructure. The trade surplus fell to its lowest level in two years as exports dropped back and imports continued to flow …
20th April 2011
Consumer confidence held up surprisingly well in March, dipping lower after the earthquake but not by as much as might have been expected. Other indicators, such as the Economy Watchers’ Survey (EWS), have suggested a more marked downturn in consumer …
19th April 2011
The chances of an imminent fiscal crisis may be small, but public finances have limited room fo rmanoeuvre. Another shock to the economy or investor confidence could mark a tipping point in the government’s ability to secure affordable funding. … Little …
18th April 2011
Most analysis of the impact of the recent natural disaster on Japan’s economy has focused on the impact on production. However, the fundamental drivers of consumer spending were already weak before the earthquake struck and are likely to deteriorate …
13th April 2011
Japanese inflation was always likely to turn positive this year due to commodity price movements and base effects in the year-on-year comparison. The recent disaster means inflation is likely to be higher still. This will not lead the Bank of Japan to …
11th April 2011
Today’s retail sales and unemployment data for February were better than expected and small business confidence was high in early March. These figures pre-date the full impact of the earthquake that struck Japan on 11th March, but they do suggest that the …
8th April 2011
There were no major policy initiatives from the Bank of Japan today and we do not anticipate any at the second April meeting either. This might bring the decline in the yen to a temporary halt, but we continue to expect the currency to end the year no …
7th April 2011
Signs that the initial blow to economic activity will be even larger than first feared have prompted us to revise our 2011 forecast down further. We now expect Japan’s GDP to fall outright by 1.5% this calendar year and by 1.0% in the fiscal year from …
5th April 2011
The slump in the services PMI in March, following the collapse in the equivalent manufacturing series, all but confirms that Japan's economy contracted for a second successive quarter in the first three months of the year. Indeed, with activity also …
The breakdown of the Bank of Japan’s Tankan survey of business conditions into pre- and post-earthquake responses showed that conditions were already expected to weaken before the disaster and are now expected to do so at a faster rate afterwards. …
4th April 2011
Some commentators have argued that Japan’s ability to sell assets or print money to service its government debt means it makes no sense to worry about a “fiscal crisis”. The chances that the Japanese government will default are indeed vanishingly small. …
The first results from the Bank of Japan's March Tankan survey of business conditions, released today, are not much use because we do not yet have a split between pre- and post-quake responses. The Bank will publish a breakdown on Monday. But today's …
1st April 2011
Japan’s manufacturing PMI index is the first business survey to reflect the impact of the Tohoku Pacific Ocean Earthquake. The results were not quite as awful as many had feared but they were still bad and the detail suggests there is worse to come. … …
31st March 2011
Japanese industrial output edged up in February, but will have collapsed in March. Production could easily fall by 10% in just one month in the wake of the Tohoku-Pacific Ocean earthquake, which alone would knock around 0.6 percentage points from GDP. … …
30th March 2011
Japan’s economy will eventually recover from the Tohoku-Pacific Ocean earthquake as the initial disruption to activity is replaced by a surge in spending on reconstruction. However, the boost to growth could be largely offset by the increases in taxes and …
29th March 2011
