日本-宏观经济-2018年日本经济展望：逐步退出通货紧缩-Morgan_Stanley-2018_Japan_Economic_OutlookGradual_Exit_from_Deflation

Takeshi.Yamaguchi@morganstanleymufg.comShoki.Omori@morganstanleymufg.comMORGAN STANLEY MUFG SECURITIES CO., LTD.Takeshi YamaguchiECONOMIST+81 3 6836-5404Shoki OmoriECONOMIST+81 3 6836-5466If you have enjoyed our research in the pastyear, we would appreciate your support in theInstitutional Investor All-Japan Research Poll. Request your ballot here.2018 Japan Economic 2018 Japan Economic OutlookOutlookGradual Exit from DeflationForecast Highlights:For important disclosures, refer to the Disclosure Section,located at the end of this report.Our constructive view on Japan’s economy remains largely unchanged.We think the economy is still in a mid-cycle stage. We think Japan isgradually making an exit from deflation with an improving output gapon the back of a tighter labor market and higher capacity utilizationrates.For 2018, we revise up our real GDP forecast to +1.3% from +1.1%,mainly on stronger exports and private capex, while we revise downthe nominal growth forecast to +1.6% from +2.2%, reflecting higher oilprices with slow adjustments in domestic prices in the near term. Thatsaid, we expect both real and nominal GDP growth to reaccelerate in2019.We expect private consumption to grow at a moderate pace in the nearterm before it starts to accelerate in 2H18, likely resulting in the core-core CPI (ex. energy and fresh food) picking up slower than we hadexpected in the near term.Monetary policy will remain dependent on inflation developments. Ourforecast of the policy sequencing remains (1) the BoJ raising the long-term interest rate target, (2) adjusting the pace of ETF buying, and (3)raising the short-term policy rate and abolishing NIRP. We push backour estimate of the timing of the first hike of the long-term rate targetto Jul-Sep 2018 from “as early as in Jan-Mar 2018”, given our updatedinflation forecast.Other than global growth risks, five important risk factors are (1) BoJGovernor selection, (2) fiscal policy, (3) constitutional reform issues, 4)oil prices, and 5) North Korea.1November 26, 2017 10:00 PM GMT 2018 Japan Economic Outlook: Gradual Exit from Deflation Big Picture Remains UnchangedOur constructive big-picture view on Japan’s economy remains largely unchanged. Wethink the following four points are particularly important.Still mid-cycle: Japan started to recover from mid-2016 after an economic lull in 2014-16, and we think the economy is still in a mid-cycle stage. We think that macro factorssupporting this recovery include a synchronous recovery in the global economy, achange in the government’s fiscal policy stance after excessive austerity in FY2014-15,and highly accommodative financial conditions with the BoJ’s sustained monetary easingunder the 2% inflation target introduced in Jan 2013 under the Abe government. Wehave also seen various positive changes at the micro level including improving corporategovernance and companies’ shareholder returns policies.Signs of Japan exiting deflation: We think Japan’s inflation has already