An April rate hike was always a long shot. The Middle East conflict continues to scramble the outlook for both growth and inflation, and the impact is only now showing up in the data. Not the conditions under which the BoJ has historically moved.
Japan's biggest ever budget is a good reminder that large yen figures mean little on their own. A big number does not, by itself, tell you whether fiscal policy is expanding. Many thanks to @asia.nikkei.com's Shotaro Tani for featuring my views.
asia.nikkei.com/politics/jap...
Henry Wang of the Center for China and Globalization joins us to discuss China's evolving role in the global order. Catch the latest episode of Moody's Global Economy Unwrapped here: www.moodys.com/web/en/us/in...
Great to be on CNBC Squawk Box Asia earlier today. Thanks to JP Ong, Lisa Kim and Rob Subbaraman for the thoughtful discussion on Japan's economic outlook and the implications of the Middle East conflict. www.cnbc.com/video/2026/0...
The Asia-Pacific economic outlook has grown more daunting. Energy shocks are back, tariff risks linger, and financial markets are on edge. Watch our latest webinar to find out what this means for the region: events.moodys.com/ta13212-2026...
This was our most read opinion piece for the week.
Japan's real exchange rate slide isn't the crisis headlines claim
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Japanese Prime Minister Takaichi is heading to Washington to meet U.S. President Trump. In our latest Global Economy Unwrapped episode, we sit down with David Boling, Principal at The Asia Group, to explore what Japan is walking into. www.moodys.com/web/en/us/in...
Many thanks to @andysharpy.bsky.social
A lot is happening in the world right now. All the more reason to read the data correctly. My latest @asia.nikkei.com op-ed pushes back on the idea that Japan's low real effective exchange rate signals a crisis. It measures competitiveness, not purchasing power. Misreading it risks bad policy calls.
Nikkei reports that January’s yen-dollar rate check was initiated by US Treasury Secretary www.nikkei.com/article/DGXZ...
In short: Treating the REER as a proxy for purchasing power misses the point. A low REER signals greater export competitiveness. It's hardly the crisis headlines claim. 5/n
What's more, only about one-third of the REER decline reflects nominal yen depreciation. Roughly two-thirds is due to inflation in Japan running below the global average. Both make Japan's exports cheaper. 4/
In other words, it tells us Japanese exports became cheaper for foreigners. It doesn't tell us whether a Tokyo household can afford holidays at beachfront hotels in Hawaii. 3/
The REER measures international price competitiveness, not purchasing power. It's a statistical construct based on the yen's nominal FX rate and inflation differentials. It falls when the yen depreciates, when Japan's inflation runs lower than abroad, or both. 2/
No, the yen's purchasing power is not at a 53-year low. New data from @bis.org shows Japan's real effective FX rate is down about 60% from its mid-1990s peak. But linking that slide to lost purchasing power misunderstands what the REER measures and why it has fallen. 1/
In other words, it tells us Japanese exports became cheaper for foreigners. It doesn't tell us whether a Tokyo household can afford holidays at beachfront hotels in Hawaii. 3/
The REER measures international price competitiveness, not purchasing power. It's a statistical construct based on the yen's nominal FX rate and inflation differentials. It falls when the yen depreciates, when Japan's inflation runs lower than abroad, or both. 2/
I dont know the future, but right now US productivity has v little to do with AI. If you look at the trend acceleration, it predates LLMs
Great fun joining @bloomberg.com's "The Asia Trade" this morning to discuss the outlook for Japan's economy. Many thanks to Shery Ahn and Paul Allen for the conversation, and to Lauren Lau and Bloomberg's Tokyo team for having me. www.youtube.com/watch?v=cUzg...
Hands down the best overview of what Kevin Warsh as Fed chair means for markets, monetary policy, and Fed independence. Listen to @markzandi.bsky.social and Martin Wurm break down the implications on Moody's Talks - Inside Economics podcast. podcasts.apple.com/us/podcast/w...
Many thanks to Carolyn Wright and Jeff Cheung for inviting me on RTHK's The Close to discuss what Japan's snap election means for the economy and markets. www.rthk.hk/radio/radio3...
