Summary

Japan fully relaxed its COVID-19 border restrictions on 11 October, one of the last major economies to do so.
At the same time, Prime Minister Kishida announced plans to reinvigorate the tourism sector, hoping to maximise the benefits of the weak yen.
Economists predict inbound tourist spending will only return gradually, and will not reach pre-COVID levels until 2025, due in part to China’s ongoing zero-COVID policy.
Japan’s economy recovered to pre-COVID levels in Q2 2022, later than its peers did.
Looking ahead, slow growth is forecast for 2022 (+1.7%) and 2023 (+1.6%).
Inflation is still muted (2%), despite the weak yen affecting the price of imports.
In a further attempt to further boost Japan’s economic growth and improve the equitable distribution of wealth, Kishida announced a “New Capitalism” economic stimulus package, including subsidies to support households struggling with high power prices.
Despite Japan’s relatively slow recovery from the impacts of COVID, New Zealand’s goods exports to Japan were up +19% for the 12 months ending August 2022, to a record high of NZD 4.1 billion.
This report includes an appendix outlining Kishida’s “New Capitalism” economic policy.

Full report here: