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Japan is the only G10 economy to have started to experience an outright fall in its total population. This is a result of relatively low birth rates and low net migration into the country, and despite long life expectancy.


  • Forecasts

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    Labour scarcity will support investment and wages and trade barriers may raise prices. JPY will rise on the external surplus, competitiveness and risk aversion. The BoJ will hike once inflation is durably up. download »
  • FX Notes

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    The yen is weak in real terms. High competitiveness, high interest rate differentials and Japan's safe-haven status leave us comfortable being long JPY, looking for a further 10% appreciation. download »
  • Focus Notes

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    Through QE, central banks have expanded their government debt holdings. Were purchases maintained in Japan and in the euro area, debt sustainability would improve sharply in less than a decade. download »
  • Economics

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    • GDP growth has picked up, driven by domestic demand. Unemployment is at multi-decade lows but inflation remains well below the Bank of Japan's target. Fiscal deficits persist but so to does the external surplus. download »
  • Markets

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    • JPY is well below its real mean. Markets price in little chance of a change in policy rates in the coming two years. Yields have nudged up; spreads, already higher than normal, are steady. Equities have outperformed. download »
  • Investing

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    • Easy policy may last until demand and inflation rise durably, urging change. Bond yields stand to rise less than global yields but have less downside risk. Fundamentals support JPY as does its “safe haven” status. download »