Japan, Still Stuck

by Claus Vistesen It did not come as a big surprise that the BOJ chose to hold rates steady once again on the outlook on inflation which seems to be deteriorating somewhat. More gravely for Japan the healthy growth clip of private consumption expenditures recorded in February of 1.3% seems to have ebbed out already in March where consumption expenditures rose a mere 0.1% and although this

What Now in Japan

by Claus VistesenThe BOJ is holding at 0.5%, exports are booming, and capex stays afloat. So what will happen in Japan as we venture forward into 2007. Well, this is what I am trying to answer in a recent note over at GEM. Here is an exerpt from my summary. So, on the economic outlook for Japan going forward I would especially like to stress one thing to watch, and that is the substantial risk of

Japan Goes To AA

by Claus VistesenIndeed, Japan seems to be in a very vigorous economic mood at the moment with particularly consumption figures looking healthy in Q1. Perhaps the recent upbeat performance in Q4 2006 and Q1 2007 is in part why Standard Poor chose today to raise the credit rating on Japan (i.e. government debt) from AA- to AA. Japan's debt ratings were raised one level to AA, the third-highest

Japan and the Fertility Trap - A Worst Case Scenario?

by Scott PetersonThe way I understand how a negative scenario for population dynamics could play out in Japan is as follows:Japan has a large segment of its population that is approaching retirement. When all of those people retire, they expected to be supported by the working population which is now far too small to support the large number of retired persons. Of course, theoretically those

Standing Fast in Japan

by Claus Visteseneing a BOJ watcher can indeed be a tough job in terms of forecasting but sometimes it is also pretty easy. Consequently, the BOJ chose today, pretty much as expected, to hold rates steady on the back of a return of deflation in the recent months and also I guess on the back of the outlook that deflation will persist in Q1 07 and perhaps even well into Q2 07 as well. Also of

Kazumasa Iwata: the Current State of the Japanese Economy

by Claus Vistesenhave been pretty preoccupied as of late with Japan and as such I thought I would also share with you a recent speech by Deputy governor of the Bank of Japan Kazumasa Iwata on the immediate outlook of the Japanese economy and monetary policy. As you can see he is much more optimistic on the rebound of inflation and consumer spending than I am. Moreover the speech also gives a

Following Up on Japan

by Claus Vistesen A week ago I had a note on the economic outlook on Japan and now, with the recent data, I think it is time to do a whee round up. First of all, the chance (or risk) for an additional hike by the BOJ seems to have dissipated with the recent inflation data showing a -0.1% (overall consumer prices -0.2%) y-o-y drop in February on the back of a steady (0%) inflation rate in