Japan

Monthly indicators suggest that the momentum in exports and industrial production improved in Q1. And we expect a weaker currency and a gradually improving outlook for global trade – led by Chinese demand – to continue to help exports. Business investment is also set to improve, as corporate profits recover, albeit growth is likely to be bumpy given ongoing uncertainty surrounding President Trump's policies. Fiscal and monetary policy will remain supportive. With little evidence that elusive demand‐pull pressures will boost inflation, we expect BoJ to maintain its current monetary policy stance over 2017–18, while government infrastructure spending is set to rise.