My subscription
...
Filters
My Subscription All Publications

Japan

Japan Data Response

Japan Consumer Prices (Jul. 2022)

Headline inflation was the highest since 1991 in July and we think it still has higher to climb. But this will not make the Bank of Japan budge on its ultra-easy monetary policy. Asia Drop-In (25th Aug.): What’s the economic impact of a weak yen? What does the latest China-Taiwan flare-up mean for decoupling? How ugly are conditions in China’s real estate sector? Join economists from across our Asia services for this regular briefing on the region’s big investment stories. Register now.

19 August 2022

Japan Data Response

Japan External Trade (Jul. 2022)

Japan’s trade deficit widened to a record high in July but it should start to shrink over the coming months as supply shortages and commodity prices continue to ease. Asia Drop-In (25th Aug.): What’s the economic impact of a weak yen? What does the latest China-Taiwan flare-up mean for decoupling? How ugly are conditions in China’s real estate sector? Join economists from across our Asia services for this regular briefing on the region’s big investment stories. Register now.

17 August 2022

Japan Data Response

Japan GDP (Q2 2022 Preliminary)

Japan’s economy grew in Q2 driven mainly by private consumption, though the overall figure disappointed mainly due to fluctuations in stockbuilding that won’t last. The recovery should persist through Q3 and Q4, though the pace will slacken a bit, as strong investment momentum is offset by a more subdued consumption outlook. We expect GDP to return to its pre-virus trend before long.

15 August 2022

Key Forecasts

Main Economic & Market Forecasts

%q/q(%y/y) unless stated

Latest

Q2 2022

Q3 2022

Q4 2022

Q1 2023

2022

2023

2024

GDP

-0.1(0.7)

0.7(0.8)

0.5(2.0)

0.6(1.7)

0.7(2.5)

(1.3)

(2.2)

(1.3)

Private Consumption

0.1(2.1)

1.2(2.7)

0.2(3.9)

0.8(2.3)

0.8(3.0)

(2.8)

(2.5)

(1.3)

Consumer Prices

(2.4)

(2.4)

(2.7)

(2.8)

(2.1)

(2.2)

(1.5)

(0.5)

Unemployment Rate (%, average)

2.6

2.6

2.5

2.5

2.4

2.6

2.3

2.1

Policy Rate (%)

-0.10

-0.10

-0.10

-0.10

-0.10

-0.10

-0.10

-0.10

Monetary Base (¥ Tr, average)

671

671

685

720

725

720

740

760

10 yr JGB yield target (%)

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

TOPIX, end period

1971

1,856

1,778

1,700

1,750

1,800

2,000

2,175

¥/$, end period

133.2

135.0

132.5

130.0

128.8

130.0

125.0

120.0

¥/Euro, end period

137.4

140.8

135.4

130.0

131.8

130.0

137.4

137.9

¥/£, end period

162.4

162.2

157.6

152.9

153.8

152.9

156.3

155.8

Sources: Bloomberg, Thomson Reuters, Capital Economics


Demographic woes persist, tourists waiting at the gate

Japan Economics Weekly

27 November 2022

Our view

The Bank of Japan has gone to unprecedented lengths to defend its 10-year yield target in recent weeks and its holdings of Japanese Government Bonds once again surpass 50% of the outstanding amount. Amidst mounting concerns over the functioning of the bond market, we think it will eventually widen the tolerance band to ±50bp. However, that’s as far as it will go. While imported inflation will lift underlying inflation close to the Bank’s 2% target by year-end, it won’t stay there, and the Bank of Japan won’t risk tightening prematurely. One consequence is that the yen will remain under pressure.

Latest Outlook

Japan Economic Outlook

BoJ will reduce pressure on Yield Curve Control

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 tolerance band around its 10-year yield target as its swelling holdings risk stifling the functioning of the bond market.

18 July 2022