Banca March | Japan will receive a ‘reciprocal’ tariff of 24%, in addition to the 25% already implemented on cars. As Prime Minister Shigeru Ishiba pointed out, the automotive industry is a ‘pillar’ of its economy. In an effort to ease tensions, Ishiba and Trump spoke on the phone, reflecting Japan’s willingness to seek an agreement. Scott Besset, US Treasury Secretary, expressed his expectation that Japan would be treated as…
Bankinter | Japan’s GDP surprised positively in 4Q 2024. GDP was up 2.8% (quarter-on-quarter annualised) versus 1.1% estimated and 1.7% previous (revised from 1.2%). Quarter-on-quarter was up 0.7 against a 0.3% estimated and 0.4% previous (revised from 0.3%). Our team’s view: Good news. The Japanese economy is growing more than expected, which together with inflation clearly above the 2% target (up 3.6% in December), will allow the BoJ to continue…
Capital Group | The winds of change are blowing in Japan. Corporate reform, wage growth and the digital revolution are ending decades of deflation and driving the market to highs not seen since 1989. Policymakers are urging companies to put shareholders first, and the government has created a digital agency to close the innovation gap with other countries. Digitalisation is a key issue to overcome demographic problems and boost productivity….
Bankinter: Japan’s Trade Balance went into surplus in June. It stands at ¥224,000M vs -¥185,700M estimated and -¥1,220,000M estimated. The indicator surprises and enters surplus unexpectedly. However, its breakdown shows a weak evolution. Exports slow down, despite the weak yen (+5.4% year-on-year from +13.5% previously and versus +7.2% estimated), and Imports (+3.2% year-on-year from +9.5% previously and +9.6% estimated). It is precisely the slowdown in this last item, which points…
Banca March: Aukus is a strategic military alliance between three countries in the Anglo-sphere: Australia, the UK and the US. The United States, Australia and the United Kingdom are seeking to add Japan to their strategic alliance known as Aukus. Initially, this strategic military alliance between the three countries was intended to help Australia acquire nuclear-powered submarines and, unofficially, to counter China’s power in the Indo-Pacific region. However, prior to…
Bankinter : January CPI in Japan reaches +2.2% year-on-year vs. +1.9% expected and +2.6% previous. Underlying: +3.5% vs. +3.3% expected and +3.7% previously. Analysis: The price indicator decelerates for the third consecutive month, although it defies expectations in both readings. This slowdown is mostly due to a mirror effect in energy prices (-12.1% year-on-year). Since, after the strong rebound in energy, as of February 2023, the government implemented subsidies to…
Alicia Garcia Herrero & Kohei Iwahara (Natixis) | On the New Year’s Day, a strong earthquake hitting the Noto Peninsula created havoc, including Japan’s supply chain. Even if the Hokuriku region did not suffer from a major power failure, in contrasts with Fukushima’s disaster in 2011, disruptions are still relevant. Even if the area being hit this time is small, 4.0% share of Japan’s GDP, it has factories producing semiconductors,…
BancaMarch: Japan’s government has raised its inflation forecast to 2.6% for 2023, well above the previous 1.7%. Considering that on Thursday of next week there is to be a meeting of the Central Bank of Japan, the market is closely watching the consequences that this announcement may have on the lax monetary policy that the Asian country has been defending. It should be recalled that, at the beginning of this…
BancaMarch | The International Monetary Fund today alluded to “uncertainty” around the direction of Japan’s monetary policy, saying a possible shift to ultra-low interest rates could have a significant impact on global financial markets. Krishna Srinivasan, head of the agency’s Asia-Pacific Department, also pointed to risks surrounding Asia’s economic outlook, such as weakening exports to advanced economies, slowing productivity in China and fragmentation of global trade.
Alicia García Herrero (Natixis) | Japan has developed an unusual social consensus to raise wages, to protect people’s livelihood from rising inflation. With this background, the spring wage negotiation among major firms is expected to result in a rise of +3.8%, the largest increase in 30 years. However, subdued productivity gains at a macro level are expected to limit a sustainable wage increase in Japan. Because large firms have improved…