Trade Tensions Putting Downward Pressure on Japan Exports, Says Continuum Economics’s Lu

The video discusses Japan's economic situation, highlighting a 1.6% contraction in exports for July, while domestic demand remains supportive. Trade tensions, particularly the US-China trade war and Japan-South Korea dispute, are impacting exports. The Japanese government plans a sales tax hike in October, aiming to restore fiscal balance despite potential economic drawbacks. The Bank of Japan faces limited options for further easing due to its massive stimulus program, with potential measures including cutting negative interest rates, expanding bond purchases, or allowing a wider trading band for the JGB yield.

What is one of the main external pressures affecting Japanese exports?

• The US-China Trade War

• The Middle East oil crisis

• The Brexit negotiations

• The European Union's economic policies

Why is the Japanese government considering a sales tax hike?

• To boost exports

• To reduce inflation

• To restore fiscal balance

• To increase consumer spending

What is a potential consequence of the sales tax hike mentioned in the video?

• A significant boost in exports

• A smaller impact compared to the previous hike

• A major increase in foreign investment

• A decrease in domestic demand

What is one of the constraints faced by the Bank of Japan in its monetary policy?

• Limited options due to its massive stimulus program

• Strong currency devaluation

• Lack of government support

• High inflation rates

What might the Bank of Japan do to manage the JGB yield?

• Stop all bond purchases

• Allow a wider trading band for the yield

• Increase the interest rates

• Fix the yield at a constant rate