11
Jun
USD 2 trillion to pull Japan’s economy out of recession
Slide into recession in Q1. -20% contraction expected in Q2. Record budget for growth.
Economic pick-up in Q3. Drop in corporate earnings. Excessive valuation of the Nikkei.
Key points
- Japan’s GDP resisted well to Covid-19 in Q1
- Recession is likely to take a turn for the worse in Q2
- Record budget approved to support Japan’s economy
- Expected rebound of leading indicators
- Record -21.9% collapse in exports
- Likely pick-up in private consumption and public spending in Q3
- BOJ unlikely to change policy
- Depreciation of yen to continue in 2020
- Decline of -32% in corporate profits in Q1
- Beware the excessive valuations of Japanese equities
