05
Dec
Stagflation reschuffles the decks for Japanese assets
GDP falls in Q3. Timid recovery possible in Q4. Consumers remain concerned. The 3% rebound in the CPI is worrying. The stagflation scenario is taking hold. The BoJ will favor the status quo. Rates are tightening. The yen remains weak. Nikkei in danger.
Key points
- Exports stall, GDP falls by -0.4% in Q3
- Possible GDP recovery in Q4, but on a knife edge
- Exacerbated dichotomy in sectoral PMIs
- Consumer confidence remains hesitant
- Inflation remains well above the BoJ’s target
- Bank of Japan caught between forced normalization and recession risk
- Specter of stagflation pushes up yield curve
- Without rate hike, yen remains under pressure
- Stagflation risks threaten Nikkei
