Japan: Policy outlook and risks for US-Japanese relations – Nomura

The research team at Nomura notes that at the Economic Dialogue meeting between Japanese Deputy Prime Minister Taro Aso and US Vice President Mike Pence, the US expressed its hope for a bilateral framework for trade between the two countries.

Key Quotes

“The risk that the US will make strong demands in an effort to correct the trade deficit with Japan warrants continued caution.”

“Outlook for US fiscal policy

The current focus of attention is on when the Trump administration can come up with a bill to cut taxes that has a realistic chance of being enacted. The administration’s current tax cut proposal appears unlikely to make it through Congress, and in view of the market's reduced expectations, even tax cuts only a third as large as those originally proposed by House Republicans might still be seen as positive.”

“French presidential elections

We expect Emmanuel Macron to win the second round of the French presidential elections on 7 May unless some incident has a major impact on how French voters feel about immigrants.”

“This year's growth strategies and basic policies

The government has been gradually releasing information regarding the policies it is likely to include in the updates to its basic policies and growth strategies, expected to be announced in June. We expect the basic policies to focus on educational reform and the growth strategies to feature themes such as the "fourth industrial revolution".”