Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>US stocks rebounded, with the Nasdaq up 1.4%, as softer inflation and lower jobless claims boosted risk appetite and reinforced expectations for lower interest rates in 2026.</li>
<li>Micron surged 10% after issuing an upbeat revenue outlook, helping revive the artificial intelligence trade after recent weakness.</li>
<li>
Asahi shares fell 6% after a $3bn Diageo Africa deal, with investors worried about overpayment and leverage concerns, despite attractive growth, margins and long-term strategic benefits.</li>
</ul>


US stocks rebounded, with the Nasdaq up 1.4%, as softer inflation and lower jobless claims boosted risk appetite and reinforced expectations for lower interest rates in 2026.
Micron surged 10% after issuing an upbeat revenue outlook, helping revive the artificial intelligence trade after recent weakness.

Asahi shares fell 6% after a $3bn Diageo Africa deal, with investors worried about overpayment and leverage concerns, despite attractive growth, margins and long-term strategic benefits.


Ohayo Japan | Inflation Cools; AI Warms Up

Chief Economist, Heteronomics

Phil Rush

Chief Economist

Heteronomics

Heteronomics represents a different kind of economics. We believe analysis should delve into the details of what is really going on, rather than using overly simplistic assumptions to quick-sell stories. Independence from myopic institutional pressures allows us to focus on the realities underlying your asset allocation decisions, without the conflicts of the old market structures. Heteronomics targets the themes driving UK asset prices, offering the benefits of depth, independence and ultimately price.

UK-centric macro research

Macroeconomics

<ul><li>Stronger wage and service price inflation have shrunk the Q1 target undershoot to only 0.1pp, removing the space that doves hoped might free the ECB to cut again.</li><li>Spending over half the year on hold and in a “good place” creates an inertia that will be hard to break towards another cut. We still see the ECB’s easing cycle as over.</li><li>Rolling the disinflationary trend back a year helps soften hawkish pressures, but losing this amid ongoing strength seems more likely to push the ECB into a hawkish direction.</li></ul>

Stronger wage and service price inflation have shrunk the Q1 target undershoot to only 0.1pp, removing the space that doves hoped might free the ECB to cut again.Spending over half the year on hold and in a “good place” creates an inertia that will be hard to break towards another cut. We still see the ECB’s easing cycle as over.Rolling the disinflationary trend back a year helps soften hawkish pressures, but losing this amid ongoing strength seems more likely to push the ECB into a hawkish direction.

<ul><li>Another downward food price revision cut HICP inflation back to 2.1% in November, but the effect was only 1.6bp, and services inflation was marginally stronger than before.</li><li>Service prices are not converging on levels consistent with the ECB’s target, and many underlying metrics are too high. The median is a notable exception, broadly below 2%.</li><li>The ECB’s “good place” assessment should be unaffected by any of this, nor the base effects driving things slightly below the target in January. It should sound neutral.</li></ul>

Another downward food price revision cut HICP inflation back to 2.1% in November, but the effect was only 1.6bp, and services inflation was marginally stronger than before.Service prices are not converging on levels consistent with the ECB’s target, and many underlying metrics are too high. The median is a notable exception, broadly below 2%.The ECB’s “good place” assessment should be unaffected by any of this, nor the base effects driving things slightly below the target in January. It should sound neutral.

AI Generated Content, Heteronomics

Heteronomics AI

AI Generated Content

<ul><li>Chile cut rates by 25bp to 4.5%, in line with expectations, forecasting inflation to hit 3% in Q1 2026, supporting further easing if convergence holds.</li><li>Peso appreciation and slowing labour costs beat forecasts, but wages are above historical averages and the neutral rate of 3.75-4.75% signals limited space ahead to cut.</li><li>Future cuts hinge on labour market data and external risks (copper, global growth). Policy is data-dependent amid a narrowing gap to the neutral rate.</li></ul><div>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.</div>

Chile cut rates by 25bp to 4.5%, in line with expectations, forecasting inflation to hit 3% in Q1 2026, supporting further easing if convergence holds.Peso appreciation and slowing labour costs beat forecasts, but wages are above historical averages and the neutral rate of 3.75-4.75% signals limited space ahead to cut.Future cuts hinge on labour market data and external risks (copper, global growth). Policy is data-dependent amid a narrowing gap to the neutral rate.This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Chile's Disinflation Sprint Meets Policy Limits

External broker reports, Nordea

Nordea

External broker reports

External broker reports(aggregated public sources)

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<ul><li>CPIFstood at 2.3% y/y andCPIF ex energyat 2.4 % y/y in November.</li><li>Thus, the year-on-year figures according to the flash published a week ago were confirmed.</li><li>The outcome was lower than expected ahead of the flash.Seasonally adjusted, the monthly change in inflation excluding energy and foreign travel dropped somewhat below the 2% target.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

CPIFstood at 2.3% y/y andCPIF ex energyat 2.4 % y/y in November.Thus, the year-on-year figures according to the flash published a week ago were confirmed.The outcome was lower than expected ahead of the flash.Seasonally adjusted, the monthly change in inflation excluding energy and foreign travel dropped somewhat below the 2% target.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Swedish November final inflation review: Food prices down