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Overview – The economy isn’t in recession but GDP growth will slow towards trend this year. With a virtuous cycle between wages and prices now in full swing, we expect the Bank of Japan to end negative rates at its April meeting. However, price …
6th March 2024
Overview – Following a strong 2023, GDP growth is set to slow towards potential next year and the labour market will tread water for now. However, with the virtuous cycle between consumer prices and inflation set to gain momentum, we expect the Bank …
4th December 2023
Overview – We no longer expect Japan’s economy to enter a recession. However, with real household incomes set to fall until the end of this year, domestic demand growth will remain sluggish. Accordingly, we expect GDP growth to slow from 2.3% this year to …
4th September 2023
Overview – The economy held up better at the start of the year than we had anticipated, but we still expect it to enter a recession in the second half of the year. Even though underlying inflation probably hasn’t peaked yet, we suspect the Bank of Japan …
12th June 2023
Overview – The economy is on the brink of a mild recession but with underlying inflation still accelerating, we expect new Bank of Japan Governor Ueda to end Yield Curve Control at the upcoming meeting in April. Key Forecasts Table Domestic Demand – We …
13th March 2023
Overview – The global downturn will pull Japan into recession next year. And with government caps on utility bills pushing inflation below the Bank of Japan’s 2% target by mid-2023, the Bank will remain the outlier by keeping monetary policy loose. Key …
5th December 2022
Overview – In a difficult global environment, Japan's economy has benefitted in recent months from a reopening boom in consumption and the easing of supply shortages in industry. Those tailwinds will soon fade, while external demand will slow. As a …
5th October 2022
Overview – Supply shortages and continued virus caution will result in a weaker recovery in Japan than most anticipate. With wage growth sluggish too, the Bank of Japan won’t see a need to lift its policy rates. However, we expect the Bank to widen the …
18th July 2022
Overview - We expect Japan’s economic output to return to its pre-virus path by the end of the year. With the recovery from the pandemic complete, we expect GDP growth to slow from 2.7% this year to just 1.0% in 2024. The Bank of Japan won’t respond to …
30th March 2022
Overview - The Omicron surge will cause a renewed fall in consumer spending this quarter. But we still expect GDP to return to its pre-virus path in the second half of the year. And while Omicron and any subsequent outbreaks may exacerbate supply …
12th January 2022
Overview - With the Delta wave having ebbed and the majority of the population now fully vaccinated, we expect a strong rebound in domestic demand over the coming months. But the inflation concerns that hang over other major developed economies won’t …
7th October 2021
Overview - Japan’s lagging vaccine rollout has finally reached cruising speed, which should allow a rapid recovery in activity over the second half of the year. The labour market may soon be as tight as it was before the pandemic, but we expect this …
7th July 2021
Overview – Japan’s vaccine rollout has got off to a crawling start and a fourth wave of coronavirus infections is forming. Even so, we expect vaccines to allow domestic spending to rebound fully in the second half of this year. Our forecast that GDP will …
8th April 2021
Overview – Japan is battling a third virus wave and is a laggard in the global vaccine rollout race. Even so, we expect economic activity to return to pre-virus levels in the second half of this year as vaccines become widely available. Our forecast that …
11th January 2021
Overview – Japan’s success in containing the virus without imposing draconian restrictions on activity should enable a faster return to pre-virus levels of output than in many major economies. We expect GDP to rise by 3.5% next year, after this year’s …
8th October 2020
Overview – Japan’s economic recovery has been threatened by a new wave of COVID-19 cases but the government probably won’t respond with drastic restrictions on activity. Output should therefore recover over the coming months, but social distancing …
9th July 2020
Overview – Lockdowns will soon be imposed across much of Japan, triggering a decline of more than 10% in economic activity this quarter. The government’s latest fiscal package is intended to help firms stay afloat and to maintain employment while …
8th April 2020
Overview – The sales tax hike has not been as damaging as many had feared. But we remain more pessimistic about the outlook for global growth and domestic investment than most. That explains why we expect GDP to contract by 0.2% this year rather than …
8th January 2020
Overview - We still think that the impact of October’s sales tax hike on consumption will be smaller than after previous tax hikes. But the outlook for external demand remains poor and firms have become less optimistic about the outlook for capital …
9th October 2019
Overview – Following a strong start to the year, GDP growth is set to slow as domestic demand drops after the sales tax hike and external demand softens further. We think that the unemployment rate will creep higher next year, keeping a lid on price …
8th July 2019
