Demographics Archives - Record Currency Macro

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Why the U.S. labour market is not as tight as it looks

12th June 2017/0 Comments/in Macroeconomics, United States /by Jeremy Chalder, CFA

Does the collapse in the participation rate represent slack, or just demographics? How many can be brought back in to the labour force? We present a detailed dissection of the American population ‘not in employment’, and the reality of getting them back to work.

JPY: Has Japan lost the Currency War?

15th June 2016/2 Comments/in Japan /by Joe Spearing

The currency war “truce” at the G20 meeting in February of this year has effectively placed political pressure on Japan to refrain from further depreciation of the yen. We investigate whether this has frozen USDJPY at its “fair value”. Although a naïve reading of PPP figures suggests that the outcome is reasonable, adjustment for productivity differentials suggests that the yen is now heavily overvalued versus the dollar, with attendant negative consequences for the Japanese economy.

Japan’s Current Account: Out of the Red, Safely into the Black?

3rd November 2015/0 Comments/in Japan /by Andrew Bloomfield, CFA

• A combination of lower oil prices and the weak Yen have both helped restore the trade balance to health but a naïve scenario analysis suggests the trade balance is still subject to uncertainty from energy price and exchange rate dynamics.
• Worries may eventually shift from energy issues to saving rates – a shift in corporate saving behaviour, which has in the past shielded Japan’s external balance from declining household saving rates could have repercussions for the current account.