Japan Country Risk Report Q2 2015 - New Market Study Published

Core Views

* We continue to see real GDP growth coming in at 0.8% in 2015, marking an uptick from an estimated 0.3% in 2014, but disappointing consensus expectations of 1.0%. While the collapse in oil prices will provide support to the economy through a greatly improved terms of trade picture, structural factors will continue to undermine growth.
* As we previously anticipated, Japanese policymakers are seeking once again to create inflation as a means of boosting economic growth. While the collapse in oil prices will cause inflation to fall in 2015, greater monetary easing increases the likelihood of high inflation over the coming years.
* Japan's fiscal and monetary policy has become increasingly indistinguishable in recent years, with the Bank of Japan (BoJ) acting aggressively in the government bond market to lower bond yields and spur bank lending. This has resulted in a reduction of traditional risks facing banks, in the form of exposure to rising bond yields, but also the introduction of new risks from a further deterioration in the domestic economy.
* With the yen down 37% over the past three years against the US dollar despite there having been effectively no difference in domestic price growth between Japan and the US, a bullish medium-term case could be made. However, despite the sell-off, the yen is by no means extremely cheap, and the current policy direction will make it difficult for the yen to experience any meaningful appreciation. As such, we hold a neutral view on the currency.
* Japanese Prime Minister Shinzo Abe's landslide election victory leaves him well positioned to remain in office for several more years and enact major reforms. Abe will need to act quickly to convince investors of his sincerity for economic restructuring, for a failure to do so would raise question marks about whether Japan can reform at all or is doomed to stagnate indefinitely.

Full Report Details at
- http://www.fastmr.com/prod/951899_japan_country_risk_report_q2_2015.aspx?afid=301

Major Forecast Changes

* We have revised down our forecast for the yen owing to recent...

The Japan Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Japan. It is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Japan's economic, political and financial prospects through end-2019, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

* Forecast the pace and stability of Japan's economic and industry growth through end-2019.
* Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
* Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.

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