Filtered by Subscriptions: Japan Economics Use setting Japan Economics
Business investment to bounce back from Omicron The sharp fall in machinery orders in February supports our view that business investment fell further in Q1 after a disappointing 2021. However, survey evidence and strong corporate profits point to firms …
13th April 2022
Wage growth to accelerate further Japanese wage growth strengthened in February and we think it will accelerate further over the coming months as overtime and bonus pay continue to recover. However, as the post-Omicron rebound wears off wage growth should …
5th April 2022
Economy will shake off Omicron hit The fall in the Q1 Tankan suggests that GDP almost certainly contracted last quarter. However, non-manufacturing sentiment held up better-than-expected during the Omicron wave and the labour market continued to tighten. …
1st April 2022
Supply shortages will continue to hold back output Industrial production was broadly unchanged in February after two monthly falls that still left output well below its pre-supply shortages peak. The 0.1% m/m rise in industrial output was weaker than the …
31st March 2022
Consumer spending to recover strongly Retail sales dropped again in February, making it almost certain that consumer spending fell across Q1. Looking into Q2 though, private consumption is well set for a strong, booster-boosted rebound. The 0.8% fall in …
30th March 2022
Employment to rebound strongly Employment was unchanged in February after January’s sizeable fall. But with all domestic restrictions since lifted and activity resuming its recovery, employment is set for a strong rebound over the coming months which …
29th March 2022
War in Ukraine intensifying price pressures on firms The March flash manufacturing PMI suggests that the war in Ukraine has intensified supply chain disruption for firms. By contrast, activity in the services sector bounced back and should continue to …
24th March 2022
Headline inflation to break 2% Inflation picked up in February due to another jump in utilities inflation and a strong rise in fresh food inflation. We think headline inflation will rise above 2% in April as some of the spike in energy prices due to the …
18th March 2022
Business investment still languishing The fall in machinery orders in January suggests that business investment may not recover much this quarter from a disappointing 2021. But with corporate profits recovering strongly last year, firms have plenty of …
17th March 2022
Exports to disappoint again this quarter Exports fell again in February, though they should rebound over the coming months provided the recent Omicron outbreak in China doesn’t cause major supply chain disruptions to resurface. The 19.1% annual rise in …
16th March 2022
Wage growth will remain around 1% The pick-up in wage growth in January was broad-based. However, with regular pay growth still around 0%, the coming energy-driven surge in inflation towards the BoJ’s 2% target won’t be sustained. The 0.9% annual rise in …
8th March 2022
Employment to shake off Omicron Employment fell back yet again in January after a strong rebound in December. But while employment might have fallen a bit further in February due to the Omicron wave, it should soon bounce back fast and push the …
4th March 2022
Consumer spending will fall this quarter The falls in both retail sales and industrial production in January confirm that the Omicron surge has knocked back the recovery. We think consumer spending will fall across this quarter, but it should rebound …
28th February 2022
Strong rebound from sizeable Omicron hit The February flash PMIs suggest that the Omicron wave has dealt a significant blow to economic activity. But with that wave now having broken, we think Japan’s economy is set for a rebound stronger than the …
21st February 2022
Inflation will break past 1% in April Inflation slowed in January but that was entirely down to the base effects boost from the Go To Travel campaign disappearing. While underlying inflation is unlikely to reach 1% until later in the year, we think …
18th February 2022
Exports to be a tailwind to recovery Exports were broadly unchanged in January despite Omicron surges at home and abroad. We think they’ll rebound further this year as external demand for capital goods rises further and motor vehicle exports resume their …
17th February 2022
Economy to bounce back fast from Omicron hit While Omicron will cause Japan’s economy to do little more than tread water this quarter following a rebound in Q4, output should soon resume its recovery and get back on its pre-virus trend by the end of the …
15th February 2022
Wage growth will bounce back Wage growth turned negative in December due to another fall in end-of-year bonus payments, but it should soon bounce back above 1% y/y this year as the labour market tightens and strong corporate profits feed into a recovery …
8th February 2022
Output likely to tread water in Q1 The small fall in both retail sales and industrial production in December suggests that the post-Delta rebound was losing steam before local Omicron cases started to surge. And while output is still set to have rebounded …
31st January 2022
Manufacturing resilient but services hit by Omicron The January flash PMI suggests that the manufacturing sector continues to expand at a rapid pace, but there are mounting signs that firms are passing on higher input costs to consumers. By contrast, …
24th January 2022
Inflation will peak around 1% Consumer price inflation reached a two-year high of 0.8% in December, but with energy prices set to fall back, we think that it will peak around 1% by mid-year . The headline rate was a touch below the analyst consensus of …
21st January 2022
Exports to remain strong Exports were broadly stable in December after a sharp rebound in November. We think they’ll continue to recover at a decent pace this year as external demand for capital goods continues to rise and motor vehicle exports resume …
20th January 2022
Business investment to continue to rebound strongly The rise in machinery orders in November supports our view that business investment recovered strongly across Q4. And private investment should continue to rebound strongly this year as firms look past a …
17th January 2022
Wage growth will rise to around 1% this year Wage growth fell to zero in November due a slump in bonus payments, but it should accelerate as the labour market tightens and the recent reopening feeds into a renewed recovery in overtime and bonus payments. …
7th January 2022
Underlying inflation to get to around 1% Headline inflation picked up in November due to another acceleration in energy inflation and a further rise in fresh food inflation. Underlying inflation remained weak, and while it will accelerate over the coming …
24th December 2021
Rebound in exports has further to run The jump in exports in November suggests that most supply chain constraints in the automobile sector had already eased last month. We think that exports will remain strong over the coming months as motor vehicle …
16th December 2021
Services catch-up has further to run 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. The headline index for large manufacturers stalled at 18, which …
13th December 2021
Wage growth to regain momentum Wage growth stayed weak in October but it should accelerate as the labour market tightens and the recent vaccine-led reopening allows a full recovery in overtime and bonus payments. Meanwhile, the rise in household spending …
7th December 2021
Employment should rebound from recent slump Employment fell sharply again in October despite the lifting of states of emergency declarations at the start of the month. However, it should rebound sharply across November and December in line with the …
30th November 2021
Spending to keep rising as disruptions start to ease Retail sales kept rising in October despite another drop in motor vehicles sales. With supply disruptions now starting to ease and mobility picking up, they should continue to increase . The 1.1% m/m …
29th November 2021
Industry set to recover as shortages ease November’s flash PMI points to a rebound in industrial output amidst early signs that supply shortages are diminishing. But while the services sector is now on the mend, the recovery there is lacking vigour . …
24th November 2021
Underlying inflation to continue to disappoint Headline inflation edged down in October despite an acceleration in energy inflation. Hit yet again by weaker mobile phone tariff inflation underlying inflation weakened further into negative territory. We …
19th November 2021
Car exports set for rapid rebound The recovery in exports in October suggests that supply shortages were beginning to ease in the automobile sector. We think that the rebound in exports will pick up pace over the coming months as production at Japanese …
17th November 2021
Domestic demand to bounce back strongly While the economy contracted yet again in Q3 as supply shortages and the Delta wave softened domestic demand, output should now be rebounding sharply. With most domestic restrictions removed, we expect GDP to regain …
15th November 2021
Post-delta recovery well underway The surge in October’s Economy Watchers Survey is the strongest sign yet that the economy is rebounding rapidly now that the bulk of the population is fully vaccinated and new virus cases have plunged. “Current …
9th November 2021
Wage growth set to recover Wage growth weakened in September as the Delta wave resulted in a drop in overtime working hours. But with the economy now rebounding and the labour market tightening, we still expect wage growth to climb above 1% next year. …
Carmaking should soon rebound from September slump While employment fell sharply again in September it should rise strongly across Q4 as economic activity gets back to near normal now that most restrictions have been lifted. Meanwhile, the sharp fall in …
29th October 2021
Consumption held back by supply disruptions While retail sales rebounded in September as the Delta wave ebbed, supply shortages in the car industry may prevent a full recovery until year-end . The 2.7% m/m rise in retail sales was stronger than the …
28th October 2021
Underlying inflation to rebound Headline inflation in September turned positive for the first time this year due to spikes in fresh food and energy inflation. As the drag from mobile phone tariffs fades in the first half of next year, underlying inflation …
22nd October 2021
Exports should be able to shake off supply shortages The sharp fall in exports in September suggests that supply shortages are severely hampering manufacturing activity in some sectors. However, we think exports will soon bounce back as supply shortages …
20th October 2021
Recovery in business investment to gather pace The fall in machinery orders in August supports our view that the recovery in business investment stalled a little across Q3. But private investment should rebound more strongly in Q4 and into next year …
13th October 2021
Wage growth to strengthen further Wage growth recovered a touch further in August and it should rise higher over the coming months as the labour market tightens and vaccines allow a full recovery in overtime and bonus payments. Meanwhile, the sharp drop …
8th October 2021
Services sector to recover, but manufacturing running into supply shortages The latest Tankan survey was stronger than most had anticipated, supporting our view that the economy will recover rapidly as the Delta wave has ebbed. However, there are mounting …
1st October 2021
Employment to bounce back strongly While employment fell sharply in August, that was due to the Delta wave and should only prove a temporary setback. We expect the jobless rate to fall further over the coming months as the lifting of virus restrictions …
Output may fall across Q3 The sharp falls in both retail sales and industrial production in August indicate that activity weakened significantly at the height of the Delta-driven fifth wave. But while that suggests that the economy may have contracted …
30th September 2021
Services recovering, manufacturing struggling September’s flash PMIs suggest that while the services sector is bouncing back as the delta wave has ebbed, the manufacturing sector is suffering from weaker demand and mounting supply shortages . According to …
24th September 2021
Inflation to peak at +1.0% y/y Headline inflation stayed negative in August as a boost from Go To Travel base effects was offset by a major drag from fresh food inflation. But looking through one-off factors such as Go To and April’s mobile phone tariffs …
Japan’s exports set to surpass pre-GFC peak before long Today’s trade figures suggest that export volumes kept rising and we think that Japan’s focus on cars and machinery means that they will hold up better than in other Asian economies . The 26.2% y/y …
16th September 2021
Business investment to continue rapid recovery The rise in machinery orders in July and optimistic projections for August and September support our view that business investment will rise strongly again across Q3. And private investment should continue to …
15th September 2021
Wage growth to bounce back further Wage growth recovered in July and it should strengthen further over the coming months as the labour market tightens and vaccines fuel a further recovery in overtime pay. Meanwhile, the drop in household spending in July …
7th September 2021