JAPAN

摘要

Following the encouraging Q1 national accounts release at the beginning of June-which revealed GDP growth of 0.5% (q-o-q) -the Japanese economy has been hit by a barrage of downbeat data in recent weeks. Pressure is mounting on Prime Minister Shinzo Abe going into the second half of the year. Latest figures for May show that industrial production dropped by -2.3% (m-o-m) after a 0.5% increase in April, whilst the services PMI plummeted into contraction territory to 49.4 in June, from 50.4 in the previous month. In addition, the Bank of Japan's quarterly Tankan survey suggested that business sentiment remained muted, with the index for big manufacturers unchanged from three months ago and the indexforbig non-manufacturers declining. Meanwhile, ongoing global uncertainty stemming from the UK's decision to leave the European Union is leading to an appreciation in the safe-haven yen, undoing the effects of the central bank's recent interest rate reductions and hurting the country's exporters. Demographically, low immigration levels mean that the country continues to age, with recently-published 2015 census results estimating that 26.7% of the Japanese population is aged 65 or over while just 12.7% are under 15.