1、Whi le we expect Japans real GDP growth to slow to 1.3%i n 2023,from 1.5%i nn2022,we look for growth to conti nue to outpace i ts potenti al.Consumpti on i sli kely to di rectly benefit from economi c reopeni ng,and we also expect capex toremai n firm on the back of pent-up demand,labor shortages du

2、e both todemographi cs and reopeni ng,and supply chai n rebui ldi ng.We see a contrast i nexternal demand between goods and servi ces,wi th goods exports softeni ngpredomi nantly i n H1,on global economi c slowdown,and servi ces exportsi mprovi ng steadi ly throughout the year led by i nbound spendi

3、 ng.We forecast core CPI i nflati on(excludes fresh food)wi ll decelerate after peaki ngnat around 3.5%at end-2022,thanks i n part to the governments new energysubsi di es,but remai n above 2%through most of the year owi ng largely to thecumulati ve i mpact of the weak yen comi ng to the fore.Market

4、 i nterest i n FY2023 Shunto and wage growth has been ri si ng markedly,asnthe BOJ has posi ti oned wage growth of at least 3%as a prerequi si te for stableachi evement of i ts 2%i nflati on target.We expect an accelerati on i n basi c wagegrowth reflecti ng hi gh i nflati on effecti vely canceled o

5、ut by a decelerati on i nbonuses and other wages chi efly due to a slowdown i n corporate earni ngsgrowth,resulti ng i n largely flat overall wage growth j ust shy of of 2%.Gi venstrong i nflati onary pressures and reopeni ng effects,we beli eve ri sk i s ti lted tothe upsi de.However,stable wage gr

6、owth of 3%sti ll seems to be a di stantprospect,unless the corporate mi ndset changes meani ngfully.BOJ Governor Kurodas second term i s set to end i n Apri l 2023.We do notnexpect an expli ci t rate hi ke even under the new leadershi p i n 2023,chi efly due tothe above-noted wage factor and the Ki