Japan Sept. Current Account: Ideas Later.

Japan logs current account surplus of 2.37 trillion yen in Sept.

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Article:

TOKYO (Kyodo) -- Japan posted a current account surplus of 2.37 trillion yen ($15 billion) in September, the Finance Ministry said Tuesday.

The surplus in September decreased by 2 trillion yen on year, reflecting a decline in dividend receipts from overseas subsidiaries, which contributed to a narrower surplus in the primary income balance.

In the first half of fiscal 2026, covering April through September, the current account surplus amounted to 17.15 trillion yen, down 0.4 percent from the same period last year, according to the ministry's preliminary report.

Primary income, which reflects earnings from overseas investments, fell 27.1 percent to 3.55 trillion yen in September, the report showed.

The goods trade balance posted a deficit of 187.5 billion yen, compared with a surplus of 247 billion yen a year earlier.

Exports rose 12.8 percent to 10.73 trillion yen, while imports increased 17.8 percent to 10.92 trillion yen, driven by higher crude oil prices amid tensions in the Middle East.

The current account balance is one of the widest gauges of international trade.

Article source:  https://mainichi.jp/english/articles/20261110/p2g/00m/0bu/029000c

Japan Sept. Household Spending: Ideas Later.

Japan's household spending in Sept. falls 6.8% on year

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Article:

TOKYO (Kyodo) -- Japan's household spending in September fell a real 6.8 percent from a year earlier, declining for the 10th consecutive month, as adverse weather dampened consumption across a wide range of sectors, government data showed Tuesday.

The latest data marked the biggest drop since September 2020, when spending sank 10.2 percent due to the COVID-19 pandemic, the Ministry of Internal Affairs and Communications said.

The decline widened significantly from 3.1 percent in August. Households of two or more people spent an average of 289,536 yen ($1,830), according to the ministry.

By category, outlays for energy and water bills declined 10.5 percent from 2025, with electricity expenses dropping 11.9 percent as lower temperatures than a year earlier reduced air conditioning use, the ministry said.

Spending on food and beverages decreased 2.5 percent, marking a fourth consecutive month of decline, as consumers opted for cheaper rice, while higher prices and weather conditions weighed on beverage spending.

Furniture and home appliance expenditures saw a 6.4 percent decline, partly weighed down by fewer purchases of air conditioners due to bad weather conditions. Outlays on clothing and footwear fell 3.6 percent as heavy rains and typhoons also discouraged people from going out and making purchases.

Despite such bad weather conditions, spending on dining increased 2.3 percent, aided by a five-day holiday, according to the ministry.

The Pacific side of eastern Japan observed its highest amount of rain for September since data became available in 1946, as well as the least sunlight for the month, according to the Japan Meteorological Agency.

"It remains unclear from this month's data whether rising prices are prompting consumers to cut back on spending, as the impact of adverse weather appears to have been significant," a ministry official said.

The data is a key indicator of private consumption, which accounts for more than half of the country's gross domestic product.

The average monthly income of salaried households of at least two individuals rose a real, or inflation-adjusted, 0.9 percent to 528,074 yen, the ministry said.

Article source:  https://mainichi.jp/english/articles/20261110/p2g/00m/0bu/027000c

Korean Economy? Ideas Later.

Korea's economy is booming. Why isn't President Lee's popularity?

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Article:

On paper, Korea's economy looks strong.

Fueled by a semiconductor export boom, the country's annual exports are projected to top $1 trillion for the first time this year, making Korea only the fourth country to reach the milestone, after the United States, China and Germany.

Forecasts from eight major investment banks put Korea's real gross domestic product growth at an average of 3.5 percent this year, with some expecting growth as high as 4 percent.

Per capita gross national income is also expected to surpass $40,000 for the first time, potentially placing Korea sixth in the world by that measure.

By those numbers, President Lee Jae Myung's approval ratings should be soaring. The economy, after all, is widely regarded as one of the biggest drivers of presidential popularity.

Yet that is far from the case.

A Realmeter survey of 2,528 adults nationwide, conducted from Nov. 2 to Friday for the Asia Business Daily, put Lee's approval rating at just 35.9 percent. His ratings have hovered between the high 30s and low 40s since October, a sharp decline from 67 percent seven months earlier.

More strikingly, the economy has become a source of sharply divided public opinion.

In a Gallup Korea survey of 1,001 adults nationwide conducted from Nov. 3 to Thursday, the economy and people's livelihoods ranked as the second-most-cited reason for both approving and disapproving of Lee's performance.

The divide highlights a growing disconnect between strong headline economic figures and the realities facing ordinary households, market watchers say.

While the semiconductor boom has lifted exports and overall growth, weakness in employment, wages and consumer spending continues to weigh on households.

From January to September, the average number of employed people aged 15 and older rose by just 117,000 from a year earlier, the smallest increase for the period since 2020.

Inflation has further squeezed household budgets, with average monthly real wages falling 0.8 percent year-on-year in the second quarter.

Consumers remain cautious despite strong income growth. In the third quarter, real gross domestic income surged 18.8 percent, while private consumption grew just 1.1 percent.

Economists say people's perceptions of their own economic circumstances and prospects matter more politically than headline economic figures.

In a 2021 study, Lee Na-kyeong, an economics professor at Seoul Women's University, found that expectations about future living standards play a crucial role in shaping public assessments of presidential performance.

"Consumers' expectations of their future living standards are a key driver of presidential approval ratings across all periods," she wrote.

The recent stock market sell-off could further weigh on public sentiment, particularly among the country's record 14.42 million retail investors, as falling share prices put pressure on Lee's administration and the ruling party to respond.

After reaching a record high of 9,114.55 on June 22, the index has trended downward. Sharp declines following the Democrats' landslide victory in last week's U.S. midterm elections have brought it closer to the 5,000-point threshold.

Both the Realmeter and Gallup Korea surveys had margins of error of plus or minus 3.1 percentage points at a 95 percent confidence level. Further details are available on the website of the National Election Survey Deliberation Commission.

Article source:   https://www.koreatimes.co.kr/economy/20261110/koreas-economy-is-booming-why-isnt-president-lees-popularity

Japan Sept. Real Wages: Updated Nov. 7, 2026.

Japan's real wages rise 2.2% in Sept., up for 9th consecutive month

Ideas

Real wages are far more important than nominal wages as real wages show how much purchasing power a consume has compared to nominal wages which include inflation and doesn't give a true measure of a consumers' earnings.

For Japanese households real wages and wage growth is very important as inflation has been a little too high for many households and their disposable income have been less than normal to spend in the economy.

Nominal wages when seen, as is, looks good but when you strip away the inflation part they aren't that good for a household or consumer.

And lets be very clear, most of these reports tend to focus on the upper middle class that work for the large name-brand companies with good wages and usually don't feel the affects of inflation that much compared to the middle or lower middle class, that work for small and mid-size companiea as there is a 20 percent wage difference between the large and small companies in Japan.

Up until maybe 2023, Japanese companies were really not giving wage increases, or very little wage increases but since that time, as they just kept profits to themselves and or for shareholders only, but due to the Japanese government urging to help improve the economy companies have been increasing wages the last few years.

At the same time, consumer spending is still less than it should be as consumers and households, for the most part, are still reluctant spend like they should or could due to inflation and other factors in the economy.

Yes, consumer prices were at 3.4 percent a year earlier but are beginning to trend down but it's taken a while for consumers and households in Japan to really feel the affects of less inflation and at 2.4 percent it might still be too high for many in the middle class, and especially the lower middle class, and for those on fixed incomes in Japan.

And finally wage growth has outpaced inflation but again some or many consumers are not feeling it just yet and maybe their disposable income is still lagging too much and hasn't got up what the less inflation effect yet.

Yes, wage increases in 2025, while better than nothing, we're still less than inflation and again cosumers and households just didn't feel good just yet and wage needed to increase more and or inflation needed to come down even more for consumers to feel good about spending in the economy again.

Wages in Japan are much lower than in the US and maybe the EU too but Japanese companies make up for it with two bonuses every year one in the spring around the May Golden Week period and the other in December or in Japan the end of year holiday period, which can usually lasts a week or more.

The bonuses are used as a flexibilty tool for many companies as they can keep salaries or wages low and then depending on how the company does, the rest of the year and give higher than normal bonuses, if the company does good or reduce the bonuses if they company has a not to good year and that way salaries remain the same year round.

Have a nice day!

Article source:   https://mainichi.jp/english/articles/20261106/p2g/00m/0bu/029000c

Editorial BOJ and inflation: Ideas Later.

Editorial: Japan's 2% inflation calls expansionary fiscal policy into question

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Article:

The Bank of Japan (BOJ) has announced that the nation's underlying inflation rate, which excludes temporary fluctuations, has reached its 2% target. It took 13 years to achieve the target after it was set in 2013. This can be seen as a milestone marking the Japanese economy's shift into an inflationary phase after a prolonged struggle with deflation.

The target was set at the urging of then Prime Minister Shinzo Abe's second administration, which pledged an early exit from deflation. The BOJ pursued unprecedented monetary easing centered on massive purchases of government bonds and a negative interest rate policy, but for years it remained unable to reach the target.

Still, many people may find the declaration of an achievement at this moment bewildering. Russia's invasion of Ukraine in 2022 triggered a surge in resource prices, and soaring prices have continued to squeeze household budgets.

It was not until the spring of 2024 that the BOJ ended its unprecedented easing. Its pace of interest rate hikes after that was also gradual. That was because the central bank was wary of cooling the economy too much and sending it back into deflation.

However, since this summer, global inflationary pressures have intensified as crude oil prices have remained high due to turmoil in the Middle East. Depreciation of the yen has compounded the problem, and price increases in Japan have become pronounced as well. The challenge now is whether inflation can be kept stable at around 2%. To that end, the BOJ needs to continue raising interest rates to curb price increases.

As Japan looks ahead to a sustainable recovery of its economy, the Japanese government's response will also be tested. Prime Minister Sanae Takaichi's administration, after being criticized by U.S. President Donald Trump over the weak yen, has been less inclined to intervene in the BOJ's monetary policy. But restraint alone is not enough.

The administration must reconsider its expansionary fiscal policy as a whole, including consumption tax cuts and gasoline subsidies. Even though the economy has shifted from deflation to inflation, clinging to measures to stimulate demand as if Japan were still in the deflationary era will only fuel higher prices. Such measures could cancel out the effect of the BOJ's rate hikes, undermining efforts both to curb inflation and to reverse the yen's depreciation.

Now that the 2% inflation target has been reached, the proper course would be for the government to declare an exit from deflation. The Takaichi administration has presumably refrained from doing so because it fears that such a declaration would weaken the rationale for the expansionary fiscal policy that it has made a centerpiece of its agenda.

But unless the government and the BOJ move in step, they will not be able to break the cycle of inflation and depreciation of the yen that is burdening the public. They should align their understanding of prices and pursue an appropriate combination of fiscal and monetary policies.

Article source:   https://mainichi.jp/english/articles/20261102/p2a/00m/0op/016000c

BOJ and Price Stability: Updated Nov. 2, 2026.

After decades of deflation, BOJ faces test of maintaining price stability

Ideas

The Bank of Japan is correct to say that its the beginning of a new phase and even though the BOJ might have reacched its 2 percent target, there, as again noted in another article there are still pockets of deflaton and even pockets of inflation in some areas in Japan the BOJ has to deal with both at the same time.

But the BOJ is again correct in saying that the deflation situation might be worse than inflation as there are a host of challenges with deflation such as less spending in the economy as consumer look for even lower prices, less investment spending by companies as they wait for the economy to improve, and lower wages are offered by companies which affect the debt household have and many other negatives.

Yes, its possible as Japan's population continues to decline and consumer spending doesn't seem to be picking up either the BOJ is maybe resigned to suggest global inflation might be the lesser of evils to help the economy get out if stagnant and deflation stage.

But there is always the idea of foreign tourist consumer spending, which has been at record numbers recently, to help pick up the economy, and it helps, but it can't overcome the less than needed domestic spending in the Japanese economy.

There have been again pockets of inflation increasing to 3 percent from time to time but never really stays there that long and, for now at least, inflation overshooting is the least of BOJ's challenges and there are still just too many under the radar signs that deflation is still lurking in the economy.

And for the average household and average consumer in Japan price stability is the one of the most important variables if not the most important as households and consumers need price stability to plan their future spending and budgeting each day, week, and month.

I don't think its a situation where the BOJ was slow to recognize that underlying inflation had been reached but, again, the BOJ has been dealing with the presistent deflation situaton which is far more dangerous for an economy than inflation as they most likely kept their eye on the deflation situation while again maybe looking at inflation from time to time.

And yes, Japan's wholesale prices increasing to 7 percent might have escaped the BOJ's eyes at the beginning but they know full well what is going on and they are looking very carefully  as to what to do about the situation but it seems the BOJ, at this time, is not going on increase the key rate to try and lower inflation, as again delation is still lurking in the Japanese economy.

Yes, even though the BOJ's target of 2 percent might have been reached they might not need the zero rate policy that the BOJ had since around 2013 and they, at least for the time being recognizee that maybe just maybe real inflation has finally come back to Japan.

But again real inflation related to consumer spending and consumer demand is still relative weak in Japan as even though its not enough foreign tourist consumer spending, where foreign consumer have more purchasing power and with the weak yen can spend more and help the economy some but it doesn't take away the need for domestic spending by Japanese consumers.

Yes, there seems to be a combination of factors that has driven inflation and yes, too, maybe consumers in Japan are more accomodating of the increase in prices and companies and their profits margins are being squeezed by higher imports costs, and the labor shortage which is forcing companies to increase wages to keep the workers they have and get new workers too as all companies, or many companies, are now increasing wages.

And maybe just maybe as wages continue to increase workers are feeling better about their disposable income and might be getting out and spending more or at least spending more online these days.

Yes, Kodama is most likely correct that the BOJ's role only played a small part and global inflation has been a major factor in inflation reaching the 2 percent target and sometimes even moving past that target.

Of course there are always going to be disagreements as to what really increased inflation as there is a saying that you can have 100 economists and they will all give different answers or ideas about some topic or situation.

Yes, most central banks prefer to see inflation at or around 2 percent as they feel its a manageable number at that level there is enough money or currency flowing through the economy to either maintain or improve economic growth.

However its easy to blame the BOJ for not being able to reach the 2 percent target but it must be remember an economy is an organic system made up of many moving parts and with many sectors and each sector doesn't always cooperate with other sectors, so in retrospect the BOJ really didn't have that much control as there were/are just too many moving parts to control with just an increase or decrease of the key interest rate.

Yes normal everyday commodity prices are the major challenge now for Japanese households and consumers and even businesses are feeling the affects of normal everyday commodities and yes consumer demand in the Japanese economy is not that good yet, and wages, while improving are not enough for all consumers in Japan.

For example, only 30 percent of workers in Japan work for the large name-brand companies that can afford to give good wage increases as the other 70 percent of the workers in Japan work for small and mid-size companies that don't have the needed profit margins or resources, even they wanted to, to increase wages enough to get people spending in the economy again.

The weak yen is both a positive and a negative as it helps exporters and their prices in the US for example but it hurts importers as import prices increase due to the weak yen and naturally importers will pass-on their increased costs the next in the supply chain including the final retail customer.

And yes, Japan, being a resource-poor country has to import much of what it needs including much if not all of the energy it needs, even though in the past it used nuclear energy which it does sparingly now after the March 11, 2011 tsunami and earthquake situation

Yes you can always say what should have been or we should have done things differently but that doesn't help the current situation and the BOJ and government need to focus on what is happening now and give Japanese households and consumers the best chance to live their lives without being stressed out by high prices or high energy costs.

Have a nice day!

Article source:  https://mainichi.jp/english/articles/20261030/p2g/00m/0bu/049000c

BOJ and Inflation Target: Updated Oct. 31, 2026.

 

BOJ says 2% inflation target generally achieved, maintains policy rate

Ideas

Yes the goal target might have been reached but that doesn't mean that there could be some sectors still feeling the affects of deflation and at the same time some sectors might even be felling the affects of inflation well above the 2 percent target as somes its been noted inflation and reach 3 plus percent.

Yes keeping the benchmark interest rate unchange at 1.25 percent is good idea as there are gain pockets or sectors that might still be feeling the affects of deflation is not a one time tinkt that comes and goes as it can linger on or hang on again in different sectors in the economy.

It seems that has already happened, but most central banks prefer to keep or try to manage inflation at around 2 percent as they feel its a manageable level and there is adequate money  flowing through the economy too at the same time.

Also its seems there have been many times, since the pandemic have inflation has increased beyond the 2 percent target to sometimes above 3 percent which can be very stressfull for the lower middle class and even the middle class households in Japan.

Yes inflation in Japan is not sustainable and hasn't been stable as it often fluctuates and can sometimes get in the the 3 percent range and at the same time its not good as companies need stability in order to plan ahead and households too need stability in order to budget their finances correctly.

And yes, its not uncommon for there to be some dissenting voices and everyone sometimes has a different opinion about that what to do and when to do it and dissenting voices negatives and they are just giving differents idea about how to achieve a goal or target.

Yes, a dissenting voice sees things differently and sometimes feels a central bank might be moving too slow and needs to move quickly to fend off any possible inflation in the future.

But at the same time, as noted, there are key risks that need to be examined more carefully as the risks, as noted again, can affect an economy and maybe even reduce or slow down an economy too much.

At the time, in 2013, Japan was in a deflation period and getting inflation to the 2 percent seemed like a reasonable goal but its taken almost 13 years to reach that level as deflation and even stagnation were consistently challenging during those years.

And an aggressive monetary easing strategy might have seemed like the correct thing to do at the time as lowering the key rate was supposed to put more money into the economy and even spur business and consumer spending which it didn't really do or too a very long time to get businessa and consumers to spend.

External factors driving inflation is not the best way to get inflation to increase organically as consumer demand is always the best way to grow positive inflation, as increased demand but consumer spending is an incentive for companies to increase prices and maybe even spur them to increase hiring, increase investments, and a host of other positive actions.

Wage growth in Japan, has been a very resent situaton, as for the most part, many companies were not really giving adequate wage increases for a long time and, and with the governments urging companies started to finally increase wages in 2023.

And yes, deflation is still very much a situation in Japan as there are some sectors and regions in Japan experiencing some form of delfation and it's just a little too soon to say it's gone. 

Japan is a mature economy and as a result doesn't grow that much compared to India or China which are still considered emerging economies and still have a lot of resources to grow their economies.

A growth of 0.7 percent might not seem like that much for the size of Japan's economy its still a good amount of growth and should not be taken or seen and a negative.

Even though 2.5, 2.6, or even 2.4 is slightly above the 2 percent target it's probably still in the range that the BOJ might still see as being manageable. But it it were to increase to well above 2.5 then it might be a problem for the BOJ and they might need to begin to think about increasing the key rate to try and reduce inflation back down to the 2 percent range.

And as both the US Reserve and the EU central banks kept their rates unchanged the BOJ most likely is going to do the same thing, as for the most part, most or many central banks seem to follow what the US Reserves does, but the BOJ up until recently didn't do exactly why the Reserve did and kept their rate at zero or under.

Yes, the BOJ did increase its rate to 1.25 as for a very long time it had kept the rate at zero or near zero but just in the past year or maybe 18 months its has begun to increase the rate and there was change in leadership at the BOJ which meant a change in policy. 

But at the same time, its not a rate change happy organization, meaning its not looking to change or increase rate every month as the BOJ is still a very conservative group and the saying "do no harm" is still important for the BOJ.

And yes, of course the markets are expecting another rate hike in December but its too early to know exactly what the BOJ is going to do as things between now and December can change very quickly which could upset that normal workings of the Japanese economy but no one knows exactly what is going to take place between then and now.

Have a nice day!

Article source: https://mainichi.jp/english/articles/20261030/p2g/00m/0bu/041000c