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Contraction in Japanese economy will likely be temporary

The preliminary report of Japanese GDP for Q1 2018 came in below expectations, showing contraction of 0.2% from the previous quarter (0.6% annualised). The slowdown in growth was broad based across most subindices of the GDP report, but was especially noticeable in internal demand (both consumption and investment). External demand also showed some softness, with […]

Growing wage growth momentum in Japan

Wage growth in Japan accelerated further in March. Nominal cash earnings rose by 2.1% y-o-y, the fastest growth since mid-2003. Base salaries increased by 1.3% y-o-y, the highest in nearly two decades, and the strong rise in bonuses (up 12.8% y-o-y) also contributed significantly to wage growth in March. Rising wage growth in Japan likely […]

China: Little progress in trade talks with US

A US delegation of Trump’s top economic advisors, led by Treasury Secretary Steven Mnuchin, had a two-day meeting with their Chinese counterparts in Beijing on 3-4 May to discuss the trade issues between the two nations. It appears that the meeting has led to little progress in solving the trade disputes between the two, meaning […]

Bank of Japan stays put, as expected

At its latest monetary policy meeting on April 27, the Bank of Japan (BoJ) decided to keep its current monetary easing programme intact. Under its yield curve control (YCC) policy, the BoJ applies a negative interest rate of -0.1% to the policy-rate balances in the current accounts held by financial institutions at the Bank, and […]

China growth sustained in Q1 but moderation expected through 2018

Chinese GDP in Q1 2018 came in at Rmb19.9 trillion (about USD3.2 trillion), rising 6.8% year-over-year (y-o-y) in real terms. The growth rate is the same as in H2 2017 and beats the market consensus (6.7%) and our own forecast (6.6%). Details of the GDP report show strong signs of economic rebalancing. Traditional drivers of […]

Japanese wage growth accelerates

Anaemic in the past couple of years, wage growth in Japan finally seems to be picking up. In January and February 2018, the average nominal cash earnings of Japanese workers grew by 1.2% and 1.3% year-over-year (y-o-y) respectively, compared with average growth of 0.4% y-o-y in the previous 12 months. In our view, the rise […]

Latest data point to moderate deceleration in Chinese growth

The first batch of 2018 Chinese data on investment and industrial production came in stronger than expected. However, details of the data suggest that actual growth momentum may not be as strong as the numbers indicate. Property investment rebounded to 9.9% y-o-y in the first two months of 2018 from 7.0% in 2017, while investment […]

Japan: Land-sale scandal comes back to haunt prime minister

A land-sale scandal that first emerged last year involving Japanese Prime Minister Shinzo Abe and his wife is back in the spotlight. Although it is still premature to tell if the scandal will end Abe’s tenure, the probability has risen notably. If more evidence emerges in this scandal, it’s not inconceivable that Abe will be […]

A surprising turn of events in North Korea

The South Korean national security director announced that the US President Donald Trump had accepted an offer of a meeting from Kim Jong Un, the leader of North Korea, before May. While it has long been our view that a military conflict between the US and North Korea is relatively improbable, the announcement still came […]

Japanese growth momentum moderates

The second preliminary GDP reading showed that Japanese GDP rose 0.4% over the previous quarter (1.6% annualised) in real terms and 2.0% year-over-year (y-o-y). This latest data release points to Japanese GDP growth of 1.7% in full-year 2017, slightly below our forecast of 1.8%. This still marks the highest annual growth rate for Japan since […]

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