Vaccine bounce not too far away

Japan’s now fast-moving vaccine rollout is set to gather more speed. PM Suga’s one-million-a-day goal could be hit on a 7-day average basis as soon as tomorrow. 18-to-64-year-olds have from today been able to fill vacant slots at large-scale vaccination centres. And workplace vaccinations are due to begin on Monday. Admittedly, the official figures on vaccine doses lag the announced injection numbers. But the latter are probably more up-to-date measure: additional doses are added retrospectively to the official figures as they are confirmed. The acceleration in jabs bolsters our view that the economy is set for a strong rebound later in the year. Some media reports suggest that the government may have Tokyo under a quasi-state of emergency until the Olympics finish in early August. But we were already expecting activity to remain subdued early in Q3 as local authorities are reluctant to rapidly lift restrictions while vaccine coverage is still low and the threat from the Delta variant remains. We think the vaccine-led rebound will accelerate around the middle of Q3 and continue through Q4 as the economy gets back to full health.