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2026

2025

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  • Daiwa's Economic View - Japan's economic/price outlooks and BOJ's rate hiking path

    Daiwa's Economic View - Japan's economic/price outlooks and BOJ's rate hiking path

    26 November 2025 600 KB PDF
    • Japan’s economy expected to grow at rate exceeding its potential growth rate, driven primarily by domestic demand
    • Government’s economic measures have led to downward price outlook revisions; Core CPI expected to clearly fall below 2% from 2026
    • Maintain our view that policy interest rate will rise to +1% in Jul-Sep 2026; That said, potential barriers include inflation expectations, communication with government
  • Daiwa’s Economic View - Economic measures put high prices and oppositions’ requests ahead of Takaichi’s agenda

    Daiwa’s Economic View - Economic measures put high prices and oppositions’ requests ahead of Takaichi’s agenda

    26 November 2025 506 KB PDF
    • FY25 supplementary budget for comprehensive economic measures includes Y3.8tn increase in expenditures compared to FY24, but breakdown consists mainly of measures addressing high prices
    • Some fiscal stimulus under Takaichi administration will have funding amounts reconsidered in initial budget for FY26
    • Calendar-based market issuance amount for JGB issuance plan remains unchanged for FY25 supplementary budget; initial budget for FY26 may include increased issuance for 2Y, 5Y, and 10Y JGBs, decreased issuance for 20yr JGBs
  • FX Pulse - Accelerating yen depreciation

    FX Pulse - Accelerating yen depreciation

    25 November 2025 512 KB PDF
    • Yen depreciation has gained momentum in the absence of strong warnings by the government regarding forex rates
    • Expansionary fiscal policy is also fueling yen weakness, running counter to measures to address inflation
  • Daiwa's Economic View - JGB issuance plan outlook for FY25 supplementary budget, FY26 initial budget

    Daiwa's Economic View - JGB issuance plan outlook for FY25 supplementary budget, FY26 initial budget

    14 November 2025 499 KB PDF
    • If comprehensive economic measures portion of FY25 supplementary budget amounts to Y18tn in expenditures, total JGB issuance will increase Y12-13tn; calendar-based market issuance amount may not increase, but increased issuance for 2yr/5yr JGBs and TBs possible
    • As for FY26 initial budget, due to tax cuts, increased interest payments, free school tuition, and reflecting higher prices in expenditures, new JGB issuance likely to reach mid-Y30tn range; no increase in calendar-based market issuance, but increased issuance of 2yr/5yr JGBs and TBs possible
  • Daiwa's View - Downward bias in underlying inflation metrics

    Daiwa's View - Downward bias in underlying inflation metrics

    13 November 2025 708 KB PDF
    • Underlying inflation indicators exhibit price stickiness
    • Exclusion of food/high weighting for imputed rents creates downward bias
    • Time to also focus on headline CPI?
  • Daiwa's Economic View - Scale of comprehensive economic measures likely around Y18tn; some policies likely to be included in FY26 initial budget

    Daiwa's Economic View - Scale of comprehensive economic measures likely around Y18tn; some policies likely to be included in FY26 initial budget

    13 November 2025 503 KB PDF
    • Comprehensive economic measures in FY25 supplementary budget expected to include roughly Y18tn in expenditures
    • Fiscal support continues for same challenges as before (addressing high prices, hiking wages), while amounts for growth investment/crisis management investment likely to increase
    • Some policies likely to be included in FY26 initial budget; await verification of effectiveness of fiscal policies advocated by JIP
  • Daiwa's View - Fiscal capacity and JGB market

    Daiwa's View - Fiscal capacity and JGB market

    11 November 2025 579 KB PDF
    • Fiscal capacity from perspective of Domar condition; importance of achieving primary balance surplus
    • Economic stimulus package of around Y10tn would have only limited impact on JGB market
    • Risk of 10-year JGB yield topping 2%
  • FX Pulse - Gradual increase in reflationary tone under the Takaichi administration

    FX Pulse - Gradual increase in reflationary tone under the Takaichi administration

    10 November 2025 373 KB PDF
    • Appointing a succession of reflationists to government-related councils
    • If more reflationists are appointed as BOJ policy board members, it could lead to a weaker yen