Morgan Stanley Fixed-Asia Economics The Viewpoint Japans reflation story – Wha...-106579286

MFebruary18,202406:06PMGMTMorganStanleyAsiaLimitedIdeaAsiaEconomicsAsiaPacificChetanAhya+8522239-7812+8136836-5404TheViewpoint:Japan'sreflationChiefAsiaEconomiststory–What'sdifferentthisChetan.Ahya@morganstanley.com+656834-8272time+8136836-5407MorganStanleyMUFGSecuritiesCo.,Ltd.+8522848-5652Skepticsarguethatnotmuchhaschanged.Weseethingsdifferently.MacropolicieswillstayaccommodativeandTakeshiYamaguchiengenderadecisiveshiftinwageandprice-settingbehaviours.Japanwilltransitiontoanewphaseofmoderate,sustainedChiefJapanEconomistinflationwithareturnofcorporatesectordynamism.Takeshi.Yamaguchi@morganstanleymufg.comKeyTakeawaysMorganStanleyAsiaLimitedJapanhasexperiencedaroundofreflation,withthecombinationofDerrickYKamaccommodativepoliciesandaglobalreflationaryenvironment.AsiaEconomistWeareseeingsignsthatthisreflationwillbesustained,withshiftsincorporateDerrick.Kam@morganstanley.comandhouseholdbehaviours.MorganStanleyMUFGSecuritiesCo.,Ltd.WeremainconstructiveontheoutlookforJapan.WethinknominalGDPgrowthwillholdupatrobustlevels,andwillbestrongerthanitwasduring2013-19.MasayukiInuiThisbackdropwillrevitalisethedynamismofthecorporatesectorandthelabourEconomistmarket.Masayuki.Inui@morganstanleymufg.comHowever,thetransitiontoanewequilibriumisnotyetcomplete,andweexpectMorganStanleyAsiaLimitedmacropolicieswillneedtostayaccommodat...