• Reopening gains, pent-up demand and high vaccination
rates are improving Eurozone’s recovery prospects

• Covid variants and supply-chain disruptions will likely make the
2H ride bumpy

• Inflation is likely to remain above target in 2H, but unlikely to
perturb ECB

• In Japan, growth recovery is delayed, due to the resurging
pandemic

• BoJ to remain dovish; a supplementary budget around
the year-end election is likely

• Implications for our forecasts: We dial up Eurozone GDP and
inflation modestly. Japan’s growth forecast for 2021 is lowered to 2.2% from 2.8%.