Author Archive

Sluggish inflation will keep BoJ on easing for a long time

In July’s monetary policy meeting, the Bank of Japan (BoJ) decided to keep its monetary easing programme unchanged, maintaining its qualitative and quantitative easing (QQE) with yield-curve control (YCC). In addition, the BoJ cut its inflation estimates for the current and next fiscal years, and revised its expectation for hitting its 2% target to one […]

China: GDP beats expectations again in Q2

Chinese GDP for Q2 2017 grew by 6.9% year-on-year (y-o-y) in real terms, the same pace of expansion as in Q1. The growth figure beats both the consensus forecast and our own estimate. We have decided to revise our Chinese GDP growth forecast for 2017 to 6.8% from 6.5%, and the forecast for 2018 to […]

Upbeat PMIs in China point to solid growth momentum in Q2

China’s official manufacturing PMI rose to 51.7 in June, the second highest reading in 2017. The Markit manufacturing PMI also rebounded to 50.4 in June after having dropped below the 50 threshold in the previous month. The rise in both indices in June suggests that China’s growth momentum in the second quarter was likely still […]

Japan’s tight jobs market may still show up in inflation

    The unemployment rate dropped to 2.8% in April 2017, the lowest in more than two decades, with 148 jobs for every 100 job seekers, a level that has not been seen since the early 1970s. What’s puzzling, however, is that the tightness in the labour market appears to have put very little pressure […]

China: rising debts a long-term concern, but short-term crisis unlikely

Moody’s announced on 24 May that it had downgraded China’s long-term local currency and foreign currency issuer ratings to A1 from Aa3, due to its concerns about the rising debt in China. According to our estimate, China’s total debt amounted to Rmb203 trillion as of the end of 2016, equivalent to 261% of its nominal […]

Moderate recovery underway in Japan

Japan’s GDP grew by 1.6% year-over-year in Q1 in real terms. On a quarter-over-quarter basis, the economy expanded by 2.2% annualised, the highest growth rate since Q1 2016. In light of the stronger-than-expected Q1 figure, we have decided to revise up our 2017 GDP growth forecast for Japan to 1.3% from 0.8% previously. Exports continued […]

Chinese growth momentum moderates

  Economic indicators for April point to some softening in growth momentum in China. Hard data confirm the moderation seen in manufacturing and non-manufacturing PMIs released earlier this month, and the direction of change is consistent with our expectation that Q1 marked the peak of growth momentum in China for 2017. In our view, the […]

China GDP beats expectations, but no change in core scenario

Chinese GDP grew 6.9% year-over-year (y-o-y) in real terms in Q1 2017, up from 6.8% in Q4 2016 and 6.7% for the full year of 2016. The strong growth figure beats both the consensus forecast (6.8%) and our own estimate (6.7%).  In nominal terms, the rise in GDP was even more significant, growing 11.8% over […]

New tech city could help China’s economic transition

At the beginning of April, the Chinese government caught people by surprise by unveiling plans to create the Xiong’an New Area, a new development zone about 130 kilometres south of Beijing. According to the announcement, the first phase of development will cover an area of 100 square kilometres, with long-term plans to expand it to […]

Momentum remains strong in China, but headwinds ahead

The official PMI figures for manufacturing and nonmanufacturing rose again in March, extending a rebound that has been evident since early 2016. Sub-indices also remain on a solid upward trend, with the production and new order sub-indices reaching their highest levels since mid-2014 and the new export order index at its highest level since March 2012. […]

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