In the media | 14 Aug 2024

SFC: Japan’s recovery – Natural Disasters, Market Turmoil, and Policy Challenges

The recent turbulence in global markets has raised some serious questions, especially with Japanese stocks seeing their biggest drop since 1987, and the VIX index, a key measure of market volatility, has hit its highest level since the COVID-19 pandemic. What’s driving this sharp shift in market sentiment? Was this just an isolated incident, or could it signal the start of a broader downturn? And more importantly, where does the Japanese economy go from here? Shigeto Nagai, former Bank of Japan official, and Head of Japan Economics at Oxford Economics, gave his insights in this interview with SFC Markets and Finance.

Watch the full interview HERE.

To download our latest reports, please check out Resource Hub – Oxford Economics.

You may be interested in

Post

Japan’s fiscal policy will remain loose, which increases risks to debt sustainabilit

We've changed our fiscal outlook for Japan in our December forecast round. We now expect the new government to set a primary deficit close to that of 2024, at 2%-3% of GDP for 2025-2027, instead of restoring a balanced budget by taking advantage of strong tax revenue. We assume higher bond yields will force the government to take measures to reduce the deficit from 2028.

Find Out More

Post

Japan’s politics add uncertainty to BoJ policy outlook

The Bank of Japan (BoJ) kept its policy rate at 0.5% at its October meeting, after a 7-2 majority vote. Two board members again voted for a rate increase. We believe the BoJ will hike in December to 0.75% as incoming data confirm that the economy is performing in line with the bank's forecasts in its quarterly outlook. However, there's a material chance of a delay.

Find Out More

Post

Japan’s December rate hike appears likely, though there is a risk of delay

We've brought forward the timing of the next Bank of Japan (BoJ) 25bps rate hike to December from next year and have added another 25bps hike in mid-2026. This reflects the surprisingly hawkish shift in the BoJ's view since its September policy meeting and upward revisions to our growth and inflation projections, driven by the US economy's resilience.

Find Out More