Core Viewpoint - Japan's fourth-quarter GDP growth is weak, which may lead to further fiscal easing measures by the government [1] Economic Indicators - Preliminary data for the fourth quarter shows that corporate investment increased by only 0.2% quarter-on-quarter, net exports remained flat, and public demand decreased by 0.2% [1] - The large supplementary budget passed at the end of November has not yet boosted public spending in the previous quarter [1] Government Response - Weak economic activity increases the likelihood that Prime Minister Fumio Kishida will not only push for a suspension of the consumption tax on food but also formulate a supplementary budget for the first half of the fiscal year starting in April, rather than waiting until the end of 2026 [1]

Core Viewpoint - The upcoming Japanese election is unlikely to result in significant fiscal policy easing despite the ruling coalition's expected majority expansion, as the rationale for further fiscal expansion has been weakened by previous budgetary measures [1] Group 1: Election Impact - The approval rating of Prime Minister Fumio Kishida's cabinet is at its highest since Shinzo Abe's administration, indicating strong support for the ruling coalition [1] - It is anticipated that the ruling coalition will likely expand its majority in the upcoming election [1] Group 2: Fiscal Policy Considerations - The substantial supplementary budget passed last year, which included cuts to gasoline taxes and electricity prices, has diminished the justification for further fiscal expansion [1] - Japan's regular budget for the fiscal year 2026 already includes planned spending increases, indicating a pre-existing commitment to fiscal policy [1] - Any additional fiscal easing would require a new supplementary budget, which Japan typically only enacts in response to severe natural disasters or significant economic turmoil [1]

Report Industry Investment Rating No relevant content provided. Core Viewpoints - In the current inflation expectation game stage, focus on non - ferrous metals and precious metals with high certainty in the commodity sector. Consider buying precious metals and non - ferrous metals on dips [2][3] - The domestic economic foundation needs further consolidation, and the Fed's December interest rate cut expectation is controversial. The market is concerned about the US September non - farm payroll data and Japan's fiscal situation [1] Summary by Related Catalogs Market Analysis - Domestic economic situation: On October 28, the full text of the "15th Five - Year Plan" proposal was released, and it is estimated that the average GDP growth rate during the "15th Five - Year Plan" period may be around 5%. On October 30, China and the US reached a three - aspect outcome consensus, and on November 5, China officially postponed tariffs. In October, the national manufacturing PMI was 49, a month - on - month decrease of 0.8; China's exports in October decreased by 1.1% year - on - year. Investment, consumption, and industrial growth rates also slowed down. The State Council Executive Meeting on November 14 studied the implementation of "two major" construction and promoted consumption policies. On November 18 - 19, China and the Netherlands held consultations on the Nexperia issue, and the Dutch government suspended the administrative order [1] - Fed situation: Many Fed voting members have expressed cautious views on a December interest rate cut, but Fed Governor Waller supports a cut, and Vice - Chair Jefferson emphasizes a slow - paced policy. The US government's shutdown ended on November 12, which is estimated to have reduced the Q4 GDP by 1.5 percentage points and caused a net loss of about $11 billion. The US October ISM manufacturing index dropped to 48.7%, and ADP data showed a weekly average decrease of 2,500 private - sector jobs in the four weeks up to November 1. Trump may announce the next Fed Chair before Christmas [1] - International situation: Japan's 10 - year government bond yield reached a 17 - year high on November 19 due to expectations of a large - scale supplementary budget. Saudi Crown Prince will invest up to $1 trillion in the US [1] Commodity Analysis - Non - ferrous and precious metals: The long - term supply limitation in the non - ferrous sector remains unresolved and is boosted by global easing expectations. On November 19, the lithium carbonate futures main contract exceeded 100,000 yuan/ton. After the short - term adjustment risk of precious metals is cleared, consider buying on dips. On November 19, spot gold exceeded $4,100, up 0.85% intraday, and spot silver reached $52/ounce, up 2.58% intraday [2] - Black sector: Still dragged down by downstream demand expectations, focus on the "anti - involution" situation [2] - Energy sector: OPEC + will increase production by 137,000 barrels per day in November, and the US API crude oil inventory increased by 4.448 million barrels last week [2] - Chemical sector: Pay attention to the "anti - involution" space of methanol, caustic soda, urea, PTA and other varieties [2] - Agricultural products: With the China - US talks concluded, focus on China's procurement plan for US goods and next year's weather forecast [2] Strategy - For commodities and stock index futures, consider buying precious metals and non - ferrous metals on dips [3]

Group 1 - The core viewpoint is that the leader of the Japan Restoration Party, Maehara Seiji, has stated that there are no plans to join the alliance led by Ishiba Shigeru [1] - Maehara has previously mentioned the necessity of a supplementary budget, but has not received any response regarding this matter [1] - Ishiba has indicated that he will provide a sincere response regarding the Alaska liquefied natural gas project [1]

Group 1 - The South Korean National Assembly has passed a supplementary budget of approximately 31.8 trillion won (about 100 billion RMB) to stimulate economic recovery amid challenges such as weak consumer demand, business difficulties, and rising trade risks due to the so-called "reciprocal tariffs" from the US [1] - Some institutions have raised their economic growth forecasts for South Korea this year, showing optimism about the effects of the supplementary budget [1] - The supplementary budget is expected to push South Korea's national debt to exceed 1,300 trillion won by the end of the year [1] Group 2 - This is the second supplementary budget for the year, increasing by about 1.3 trillion won compared to the original proposal submitted by the government [1] - Approximately 12.17 trillion won will be allocated for issuing consumer vouchers to all citizens, while about 10.3 trillion won will be used to cover tax revenue shortfalls [1] - The government will also implement debt relief measures for small and micro enterprises [1]

Group 1 - The South Korean National Assembly recently passed a supplementary budget of approximately 31.8 trillion KRW (about 31.8 trillion KRW equals 100 billion RMB) to stimulate economic recovery amid challenges such as weak consumption and rising trade risks due to the US's so-called "reciprocal tariffs" [1] - The supplementary budget is expected to increase South Korea's GDP growth rate by 0.14 to 0.32 percentage points, with institutions like Goldman Sachs and Barclays raising their GDP growth forecasts to around 1% [2] - The budget includes 12.17 trillion KRW for consumer vouchers and 10.3 trillion KRW to cover tax revenue shortfalls, along with debt relief measures for small and micro enterprises [1] Group 2 - Concerns are rising regarding the increasing fiscal burden, as the total fiscal expenditure in 2025 is projected to reach 703.3 trillion KRW, with government debt as a percentage of GDP rising from 48.4% to 49.1% [2] - The supplementary budget was passed just before the deadline for US tariff negotiations, with South Korean officials engaging in discussions with US counterparts regarding tariff exemptions [2]

Core Viewpoint - The South Korean government is pushing for a supplementary budget to restore livelihoods, with plans to outline this in the cabinet meeting on the 19th [1] Group 1 - The supplementary budget aims to address economic challenges and support citizens' living conditions [1]

Core Viewpoint - Nomura Securities analysts, led by Kyohei Morita, believe that Japan's economy is unlikely to fall into recession despite potential economic slowdowns caused by U.S. tariffs [1] Economic Outlook - Japan's economy is primarily driven by the service sector, which is expected to benefit from new stimulus measures through supplementary budgets [1] - Corporate investments in software and efforts to address labor shortages are anticipated to support Japan's economic growth [1] Risks and Challenges - The analysts caution that tariffs may exert "downward pressure" on Japan's economy from July to September [1] Monetary Policy - The Bank of Japan is expected to begin raising interest rates in January 2026, as indicated by the central bank's governor, Kazuo Ueda, who emphasized readiness to continue rate hikes if the underlying inflation rate approaches the 2% target [1]

Core Viewpoint - The South Korean President Lee Jae-myung has called for the rapid preparation of a supplementary budget to support economic recovery and stimulate consumption [1] Group 1: Economic Context - The newly appointed President Lee Jae-myung has prioritized economic recovery and established an emergency economic task force composed of government officials [1] - Concerns over the impact of U.S. tariffs have led to stagnation in exports and consumption, resulting in expectations for interest rate cuts and an economic contraction in South Korea [1] Group 2: Budget Details - If the additional budget is finalized under President Lee's leadership, it will increase the previously approved supplementary budget of 13.8 trillion Korean won (approximately 9.7 billion USD) from May 1 [1] - During his campaign, President Lee emphasized the necessity of an additional budget to provide short-term economic stimulus [1]

Group 1 - The Japanese ruling coalition officials unanimously agree on the necessity of drafting a supplementary budget in the fall to fund a new stimulus plan [1] - The government led by Prime Minister Shigeru Ishiba is under pressure to take additional measures before the scheduled Senate elections in July [1] - The aim of the supplementary budget is to mitigate the economic impact of increased tariffs imposed by the United States [1]