Japan's economy has plodded along for a while, but Nomura in a note this week has pointed to six potential major surprises which, while outside its baseline scenarios, could shake things up, including more retail spending and workers taking time off.
No.1: Higher-than-expected inflation
The absence of inflation has been Japan's bugbear for decades. But now, the dollar has climbed amid rising U.S. interest rates and expectations President-elect Donald Trump's policies will spur inflationary pressure. At the same time, oil prices were rising.
"If continues to appreciate and crude oil prices continue to rise, the inflation rate in Japan could be much higher than expected," Nomura said. "We need to watch for the possibility that the financial markets could focus their attention on an exit strategy [from Bank of Japan policy] in periods when inflation is rising."
To be sure, there's not much sign of inflation yet. On Tuesday, government data showed Japan's core consumer price index (CPI), which includes oil products, but not volatile fresh food prices, fell for a ninth straight month in November, slipping 0.4 percent on-year. That's well off the Bank of Japan's (BOJ) 2 percent inflation target.
No.2: The BOJ eases even if inflation rises
Nomura didn't expect the BOJ would take active measures if inflation were to recover, nothing that core CPI was set to turn positive as energy prices come off lows. But Nomura also noted the central bank could surprise.
"This scenario is one in which, having switched to a war-of-attrition strategy, the BOJ sees a recovery in the inflation rate as a rare opportunity and implements additional easing to encourage a weaker yen, spurring a rise in inflation," Nomura said.
No.3: The helicopter money debate goes airborne, again
Around mid-year, amid the Brexit vote, speculation emerged that Japan could introduce helicopter money, combining fiscal and monetary policy, to counter a potential economic slowdown, Nomura noted.
In the year ahead, Nomura cited risks, such as hiccups to U.S. fiscal expansion, efforts to weaken the dollar or election gains for Europe's protectionist political parties, which could push the safe-haven yen higher amid a weaker global economy. "If there is major downward pressure on the Japanese economy and prices, the view could emerge that cooperative measures from the government and BOJ were necessary, and it would not be surprising to see the debate about helicopter money re-emerge."
No.4: "Great success" for Abenomics' growth strategies
Nomura pointed to two scenarios where growth could surprise.
Firstly, Japan was poised for relative superiority on political stability, with the possibility Shinzo Abe could remain prime minister through 2021, the note said. That compared with "deep-rooted concern" about the Trump administration and risks of Europe's protectionist political parties gaining power, it said.
The second scenario was that Japan may raise its potential growth rate estimate when the base year for gross domestic product (GDP) was changed.
"An upward revision to the potential growth rate could lead to the view that opinions on the results of the growth strategies so far had been overly pessimistic," Nomura said. "If the growth strategies are shown to be producing results, they would be viewed more favorably, and this could increase momentum for growth strategies in the future."
To be sure, so far, there haven't been signs of a serious growth pickup.
In the July-to-September quarter, Japan's GDP grew 1.3 percent on-year, revised figures released in early December showed. That's relatively tame after around three years of concerted policy efforts since Abenomics' introduction in 2013.
No.5: Japan's consumers turn shopaholic
Japan's consumer spending has been weak since the consumption tax was boosted to 8 percent from 5 percent in April 2014, Nomura noted. That tax hike was aimed at improving government finances, but it clobbered the economy as consumers stopped spending.
But Nomura noted that, like with GDP, the benchmark year for comparing consumer spending will soon be revised, suggesting the post-tax-hike rebound may have been sharper than believed. November retail sales data, released on Wednesday, showed a surprise 1.7 percent on-year jump, beating a Reuters forecast for a 0.6 percent rise.
"As expectations are low, if it becomes clear that consumer spending is recovering, the surprise could be big," Nomura said.
No.6: Japan's workers work less
Nomura doesn't expect Japan's long-running love-affair with extended work days to end soon, but it noted the government was trying to rein in overtime hours.
"Death from overwork has been a closely watched issue, and public scrutiny of companies that impose long working hours has become more intense. If companies do not address long working hours, they risk harming their brand and could be deterred in their ability to hire people," it said. "Some companies have begun efforts to reduce working hours. If these efforts become more widespread, we think they could warrant attention."
The effect on growth could be mixed.
In the short term, cutting work hours would lower the potential economic growth rate as labor input falls, but in the longer run, productivity would likely improve, the birth rate could recover and more women could enter the workforce, Nomura noted.
The bank said consumer spending would face a mixed bag: On the upside, workers could spend more on leisure, but on the downside, incomes could fall.
—By CNBC.Com's Leslie Shaffer; Follow her on Twitter