There are three key themes to be more optimistic about the second half 2021 and beyond in Japan, according to Oxford Economics.
One being the arrival of the COVID vaccine, which will allow for a more significant recovery in the services sector and for the Tokyo Olympics to be held, although a still-vulnerable consumer outlook and high dependence on the slower-moving capex cycle mean that the pace of recovery will likely trail that elsewhere
Second is policy will remain supportive of growth in 2021. Oxford Economics expect the Bank of Japan to maintain current monetary policy, extending support for corporate credit but keeping interest rates unchanged. The Suga administration’s fiscal relief package will contain 5.8 percent of GDP in new spending to maintain support for businesses and households affected by the pandemic.
And Oxford Economics believes there are reasons to be optimistic about post-COVID Japan, despite its guarded near-term outlook. COVID cases ha
