Post-Olympics public spending boost, BoJ holding firm

Japan’s government appears to be lining up a stimulus programme to prevent an economic downturn after the Tokyo Olympics next year. While increased public spending would provide a welcome boost to GDP, we don’t believe there’s any particular reason to expect a post-Olympics slowdown. Meanwhile, the Bank of Japan is bucking the global trend towards additional monetary easing. Unlike some commentators, we don’t think that loosening by other major central banks puts the Bank of Japan’s policy framework under pressure.