Next year is poised to be a great year for Japan. My main predictions are unashamedly bullish: Exports will get a boost from a re-acceleration in global growth; there will be a surprise pickup in domestic demand with business investments kicking in and, most importantly, consumers will begin to open their purses. After enforced austerity in 2020, 2021 brings the release of pent-up demand and a steady rise in the purchasing power of the Japanese people.

However, also in store are a few surprises, i.e. scenarios neither forced by the still substantial COVID-19 uncertainties nor predictions and expectations made by the quantitative models of the experts or the wisdom of the crowd. I am talking about what keeps me awake at night. Improbable as some of these events may seem, any movement in their direction will force an about-face in the overall consensus. That’s why surprises are so powerful. Enjoy, and best wishes for a healthy, prosperous and happy year in 2021.

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