What I Learned This Week

Economic fundamentals suggest Japan is approaching a major secular shift.  What are the implications?

For over two decades, we have called Japan the “laboratory of the world,” for reasons we described in WILTW December 21, 2017: “Japan was the first country to experience a baby bust. Japan was the first country to experience peak population and peak-working population. Japan was the first country to enter deflation and its bond market led the world in declining interest rates for decades.” During the past several months, many key economic metrics have hit multi-decade extremes, suggesting that Japan is at a critical juncture of a major secular shift. Consider the following: Japan’s unemployment rate was reported at 2.4% in August, down from July’s level of 2.5%—near the lowest unemployme…

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