Latest Development: The Bank of Japan (BoJ) maintained its target for short-term interest rates at -0.10% at its latest meeting on September 22. It also announced that it would continue managing the +/-0.5% band of its 10-year government bond yield target with "greater flexibility", treating them as "references, not as rigid limits, in its market

Key View: Household spending growth will slow over 2023, as macroeconomic headwinds weigh on households. High frequency data show a continued recovery in retail sales and consumer confidence, as economic recovery picks up and Covid-related impacts fade. However, inflation is the highest in four decades, and the rising cost of living is forcing

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• Amazon has signed a power purchase agreement with Itochu-owned Clean Energy Connect to procure solar energy in Japan. The company will invest USD75mn by 2024 to develop small solar power plants exclusively for Amazon at about 700 locations.
• We have previously highlighted the growing trend for data centre operators to reduce their

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• Japan’s medical device market will expand in both local currency and US dollar terms over our forecast period.
• Japan’s ageing population and high-tech medical device sector will remain key long-term growth drivers.
• Medical device imports and exports have declined as the Covid-induced boom begins to subside.

Japan’s medical device

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• We forecast a steady decline in Japan’s refining sector as the industry continues to contract amid the clean energy transition.
• Japan’s refineries have already experienced the impact of the transition to cleaner alternatives with government-led programmes substantially reducing refining capacity in the past decade.
• Demand in Japan

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• Japan will continue to tighten rules around drug price revisions to lower its healthcare costs under the universal National Health Insurance (NHI) system.
• R&D-based drugmakers will lower commercial expectations in Japan as result of changes to the pricing system.
• While off-year drug price revisions will lead to downward pricing

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• Japan’s Prime Minister Fumio Kishida faces a mixed outlook after April 2023’s local elections, with his approval rating having stabilised after recent lows.
• Beyond the elections, the financing of Kishida’s planned doubling of defence spending to 2% of GDP by 2027 could increase political risks.
• However, the ruling LDP does not

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• We

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• At Fitch Solutions, we retain our view for Japan to be one of the few developed economies where growth will accelerate in 2023. We forecast real GDP growth of 1.3% in 2023, up from 1.1% in 2022 and above consensus estimate of 1.1%.
• Although inflation is now double the Bank of Japan’s 2.0% target, we believe that Japanese policymakers

Key View: We forecast real household spending in Japan will grow by 1.5% y-o-y over 2023, a slowdown from the 2.1% y-o-y growth in spending estimated for 2022. That said, we note that growth in 2022 largely came about from the low base in 2021 (0.4% y-o-y) as well as a contraction in spending in 2020 (-6.2% y-o-y). High frequency data shows a