Jaan's 2017 H2 outlook, what economy needs most? - Nomura

Analysts at Nomura, in respect to Japan's economy, suggest that the key points for 2017 H2 are export recovery and dent to spending from inflation.

Key Quotes:

"We think the key points going forward are whether domestic demand can remain solid and whether the sluggishness in external demand will become protracted. The strength of domestic demand started to stand out from 2017 Q1, and we think the recovery seen in external demand since 2016 H2 may well have spread to domestic demand. 

However, if the sluggishness in exports became protracted, there would likely be a negative impact on domestic demand. We think global economic growth has levelled off, and that underlying growth in exports from Japan is slowing. 

However, with new smartphone production getting fully underway in 2017 H2, we think exports from Japan will likely pick up slightly compared to Q2, when they were broadly flat q-q. 

Meanwhile, we forecast that the rate of real GDP growth will slow in future as CPI growth gains pace and consumer spending slows, after having boosted domestic demand since the beginning of 2017."