Filtered by Subscriptions: Japan Economics Use setting Japan Economics
The continued rebound of small business confidence in Japan is a good example of the disconnect that sometimes happens between the worries of financial markets and reality on the ground. … Small Business Confidence …
26th May 2010
The turmoil in the euro-zone has hit investor confidence in Japan much harder than we believe is justified by economic fundamentals. … Europe’s crisis will not derail Japan’s …
24th May 2010
The attention of the markets is understandably elsewhere right now. Nonetheless, for the record, the first quarter GDP data kept Japan’s economy on course to grow by at least 4.0% in 2010. Our top of the range forecast of 4.5% is challenging, but …
The Bank of Japan’s proposed one-year loan scheme is designed to support the government’s longerterm industrial policy rather than to ease monetary conditions more generally. As such the immediate impact should be limited. Nonetheless, this step could …
21st May 2010
Another large rise in GDP in Q1 and some upward revisions keep Japan's economy on course to grow by at least 4.0% this year, which would be well above consensus. … GDP (Q1 …
20th May 2010
Machinery orders are now trending higher, which provides further evidence that business capital spending is picking up too. … Machinery Orders …
17th May 2010
Japan’s economy is starting to fire on all cylinders. We expect another robust gain of around 1.5% in first quarter GDP (preliminary official data will be released on Thursday). Our growth forecast of 3.0% for 2010 as a whole has long been at or near the …
The surge in the main balances of Japan’s Economy Watchers Survey (EWS) in April is further evidence of a strong and increasingly broad-based recovery, consistent with our well-above consensus GDP forecast of 3.0% for this year. Indeed, we might soon be …
13th May 2010
Claims that the current weakness of bank lending is due to the poaching of deposits by Japan Post make no sense. The real reason is the lack of demand for this type of credit. … What's really behind the weakness in bank …
11th May 2010
The continued strength of the economic recovery is one important reason why market confidence in Japan’s ability to finance its huge public debt has remained fairly high. GDP appears to have grown at a rapid pace again in the first quarter and the early …
10th May 2010
The DPJ’s economic and fiscal plan, due to be unveiled next month, is likely to be criticised on at least two counts: that the proposed target for the budget balance would still leave debt at very high levels, and that the assumptions for GDP growth are …
The market reaction to the recent events in Greece shows that Japan is still seen as a safe haven rather than one of the next countries in line for a public finance crisis. This makes sense. In addition to the well-known structural advantages that Japan’s …
3rd May 2010
Despite revising its growth and inflation forecasts higher, the Bank of Japan signalled today that it accepts more monetary support will be required to sustain the recovery. We are not sure that the Board really believes this yet. Nonetheless, policy will …
30th April 2010
Today's rush of data showed no sign of the imminent double-dip in the Japanese economy that some still fear. … Activity, Wages and Prices …
The Bank of Japan’s Policy Board is almost certain to raise its projections for both economic growth and consumer prices at tomorrow's meeting. Indeed, reliable media reports suggest it will forecast a return to inflation next fiscal year. However, while …
29th April 2010
In contrast to the position in many other major economies, notably the US, Japan’s relatively broad-based recovery is helping firms of all sizes. Indeed, April's buoyant survey of small business confidence suggests that the risk of a double-dip anytime in …
27th April 2010
Tensions between the Bank of Japan and the government over the need for further monetary stimulus remain high. We can see a number of good reasons for the Bank to resist that pressure for a few months longer, but further substantial easing will eventually …
26th April 2010
Finance Minister Kan's suggestion that any hike in the consumption tax should be used to increase government spending would risk backfiring in the markets. Even if increased public spending in certain areas might boost potential growth in the economy, any …
19th April 2010
The third successive monthly increase in consumer confidence suggests that household spending in Japan is unlikely to collapse once the initial boost from government measures has faded. Inflation expectations are rising too. … Consumer Confidence …
The Japanese government is banking on average annual GDP growth of at least 2% over the next ten years to help bring public debt back under control. This would be well above most estimates of Japan’s sustainable growth rate. But this does not mean that 2% …
15th April 2010
Just as the surge in bank lending in late 2008 was hardly evidence of strength in Japan's economy, the recent year-on-year declines may not be a sign of renewed weakness. What's more, in contrast to many other major economies, growth in broad money is …
12th April 2010
Speculation of an imminent resumption of renminbi appreciation has been supporting other Asian currencies against the dollar, including the yen. However, we would give this factor very little weight when thinking about the outlook for the Japanese …
The sharp improvement in the main balances of Japan’s Economy Watchers Survey (EWS) in March is further evidence of an increasingly broad-based recovery. This trumps the bad news of a fall in machinery orders in February; the trend in this key investment …
8th April 2010
The Bank of Japan tweaked its qualitative assessment of the economy today, changing a few words here and there to suggest a more positive outlook. However, we will have to wait until the latest forecasts for economic activity and prices are published at …
7th April 2010
The past week’s Japanese data included some soft spots, but they were not bad enough on their own to justify a more bearish view on the yen. The relative optimism about the US economy and expectations of earlier tightening from the Fed have also been …
5th April 2010
The Bank of Japan's quarterly Tankan survey revealed little that was not already clear from the improvements in the monthly data. The relative pessimism of small firms is a concern, but the Shoko Chukin survey suggests this is overdone. The projected …
1st April 2010
Today’s data on labour cash earnings and housing starts in February continued this week’s run of generally disappointing news on the Japanese economy. The timelier Shoko Chukin survey for March did at least confirm the improving trend in conditions …
31st March 2010
Today’s data on household spending suggest that the recovery in consumption may have faltered in the first quarter. Nonetheless, other evidence from the consumer sector is reassuring and we do not believe this is the start of a double-dip. … Spending, …
30th March 2010
We are raising our forecasts for 10-year Japanese government bond (JGB) yields to a peak of 1.75% later this year (from around 1.40% on Friday). This may not sound like much, but in the context of Japan and of our bullish forecasts for other major bond …
29th March 2010
The plan to raise the caps on postal savings deposits and life insurance is being interpreted by some as positive for Japanese government bonds (JGBs) and by others as a major threat to the banking system. In fact the direct effects, good or bad, are …
26th March 2010
February’s CPI data were not quite as bad as some of the subsequent commentary has suggested. Nationwide prices did at least rise month-on-month on all the main measures. In the meantime, household inflation expectations have remained positive, while …
Japan’s exports are predictably booming in year-on-year terms as the post-Lehmans slump in world trade drops out of the annual comparison. More revealingly, the volume of exports is heading for another large quarter-on-quarter gain in Q1, and the …
24th March 2010
The quarterly Flow of Funds data published by the Bank of Japan today shed a little more light on several hot topics, including households’ holdings of government securities and the huge difference between gross and net public debt. … Which matters more – …
23rd March 2010
In contrast to the position in many other major economies, notably the US, Japan’s broad-based recovery is helping firms of all sizes. Along with the relative strength of consumer confidence, this is another good reason to expect growth to remain firm for …
22nd March 2010
The strength at the end of last year has laid a firm foundation for 2010. With the latest survey evidence showing that momentum remains positive, we continue to expect GDP growth of around 3.0% this year, well above consensus. … 2010 looking good, but …
18th March 2010
The bare minimum the Bank of Japan could have got away with today was to extend the lifetime of the existing ¥10 trillion programme of three-month loans. In the event it has also doubled the size of the programme, to ¥20 trillion. However, with credit …
17th March 2010
The second successive monthly increase in consumer confidence in Japan suggests that household spending will remain strong in the current quarter even after last year's initial boost from government measures has faded. Encouragingly, sentiment towards the …
15th March 2010
The latest suggestions that official statisticians are engaged in some fiendish conspiracy to manipulate Japan’s GDP data are on very shaky ground. We continue to expect growth of around 3.0% in 2010, well above the consensus of 1.5-2.0%. But despite our …
Despite the small downward revision to growth in the fourth quarter, from 1.1% to 0.9% q/q, Japan has still recorded the biggest increase in GDP of any G7 economy since activity bottomed out in Q1 2009. … GDP (Q4, …
11th March 2010
The Bank of Japan is now widely expected to announce some additional monetary stimulus at its next Policy Board meeting (which concludes on Wednesday 17th). However, we suspect this will simply be an extension to the special fundssupplying operation …
10th March 2010
The recent contraction of bank lending is often cited as a risk to the economic recovery in Japan and to the prospects for investment in particular. However, the declines in bank lending are probably no more a sign of renewed economic weakness than the …
9th March 2010
The continued improvement in the main balances of Japan’s Economy Watchers Survey (EWS) in February is further evidence of a strong and increasingly broad-based recovery. We would pay less attention to the third successive year-on-year decline in bank …
8th March 2010
The government is due to announce its medium-term fiscal plans in June. Either this will mark the start of a long period of fiscal restraint, weakening the economy again and requiring further monetary loosening (we think this is the most likely outcome). …
The year-on-year slump in business spending in Q4 reported in today’s Ministry of Finance (MoF) survey is largely old news. Neither the year-on-year nor the quarter-on-quarter data justify speculation of a substantial revision to the second estimate of Q4 …
4th March 2010
Despite the scepticism of many, the recent declines in the unemployment rate in Japan are consistent with other evidence on the state of the labour market and the strong performance of the economy more generally. The turnaround in jobs and pay is …
3rd March 2010
Household spending dropped back in January, but the labour data were better than expected. Unfortunately, there are good reasons to question the sustainability of the sharp falls in unemployment. … Household Spending & Unemployment …
2nd March 2010
The 1.1% q/q increase reported in the preliminary GDP data for the fourth quarter of last year continues to be viewed with scepticism by many analysts. In some cases this may simply be an attempt to shift the blame for a poor forecast. At this stage there …
1st March 2010
The latest activity and survey data support our view that Japan’s GDP growth will continue to surprise the markets on the upside in the first half of the year, but the CPI data do nothing to ease concerns about the medium-term outlook. … Output, Housing, …
26th February 2010
Speculation about a temporary double-dip in Japan’s economy by the middle of this year is missing a much bigger threat. We still expect growth to surprise the markets on the upside for a few quarters more. But Japan could be back in outright recession in …
25th February 2010
The annual growth of Japan’s exports predictably soared in January due to favourable base effects. More revealingly, exports continued their gradual recovery in month-onmonth terms. Today’s upbeat survey of small and medium-sized enterprises (SMEs) in …
24th February 2010
