Japan Company Economy Expectations: Ideas Later.

Half of firms expect Japan's economy to grow amid inflation concern

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TOKYO (Kyodo) -- About half of major Japanese companies expect the domestic economy to grow in the year ahead, down from 70 percent six months ago, reflecting concerns over inflation from the prolonged conflict in the Middle East, a Kyodo News survey showed Saturday.

Some 51 percent expect gradual economic growth over the next 12 months, while 38 percent expect growth to be flat and 5 percent expect the economy to contract moderately, according to the survey of 111 companies conducted from early to late July.

In the January poll, 70 percent expected steady growth and 25 percent expected the economy to move sideways and 1 percent expected it to shrink moderately.

Among those expecting moderate economic contraction or flat growth, 54 percent cite rising prices as a reason for the outlook with multiple answers allowed, while 50 percent cite sluggish consumer spending and 48 percent cite a surge in energy costs.

Some 81 percent of the companies forecasting gradual economic expansion see capital spending recovering, 77 percent point to rebounding consumer spending and 68 percent expect wage hikes to help growth. None expects stronger expansion.

Government data showed Friday that Japan's household spending fell from a year earlier for the seventh consecutive month in June, while Japanese companies agreed to raise wages by more than 5 percent on average this year for the third consecutive year since the first such increase in 33 years in 2024.

Among all the surveyed companies such as Toyota Motor Corp., Panasonic Holdings Corp. and Mitsubishi UFJ Financial Group Inc., 58 percent expect their earnings to grow or grow moderately.

About half, on the other hand, say tensions in the Middle East have had a negative impact on their businesses, citing higher costs for raw materials, energy and transportation.

To mitigate the impact of heftier costs, nearly half say they plan to raise prices over the coming year, while three companies say they will neither increase prices nor lower them. Still, many others declined to answer or remained undecided

The survey does not reflect the impact of the magnitude 7.1 earthquake that struck Kumamoto Prefecture on July 28 or a joint intervention by Japan and the United States in the foreign exchange market.

Article source:   https://mainichi.jp/english/articles/20260809/p2g/00m/0bu/009000c

Japan Household Spending in June: Updated Aug. 9, 2026.

Japan's household spending in June falls 3.3% on year.

Ideas

There are many variables that can cause a change in household spending and not just the weather and a change in temperatures as noted in the article.

There is also the idea of consumer sentiment or the mood of consumers or shoppers that is a major variable that can cause good moods or less than good moods which can increase spending or decrease spending too.

The fact that Japan household spending decreased for the seventh consecutive months by 3.3 percent might indicate that the decrease was by more than the change in the weather but it that could have been a cause that have to be other reasons just as the continued inflation situation in Japan and maybe households were saving up a little for the coming August Obon holiday period or the longer holiday period in September this year.

Of course, yes, the drop in temperatures might have been a reason for the 2.5 percent decrease in beverage sales but what about also if there were increases in the price of beverages and Japanese consumers felt they have become a little too expensive and were cutting back on buying a lot of them.

The 290.886 yen spent by two or more consumers seemed about right but what about the the amount spent by single people or even the lower-income groups as that might be a more accurate metric to see what is really happening in Japan instead of what is happening with the middle income or even high income groups in Japan.

The decrease in dining out is not a surprise as inflation cause decreased disposable incomes in Japan and households or whomever has less extra income to use outside the home and dinning out is always one of the first expenses to be cut from the budget.

And yes, consumable goods, again due to inflation, which is a repeatable expense as they have to be bought often and maybe, again, due to less disposable incomes households are cutting back, as much as possible on not buying consumables as often as before in Japan.

Its seems, not to criticize, but sometimes due to the threat of significant typhoons, earthquakes, and tsunamis in Japan households are prone or quick to horde or buy things for possible emergency situations which was very evident during the 2024 earthquake scare which saw a surge in the many consumable items which actually caused a temporary shortage of some items and couple with the supposed shortage or rice there was actually a significant rice shorter in Japan too.

And even during the pandemic it was reported that there were were shortages of many consumables such as face masks, tissue and other paper products too during that time, due to hording by some in Japan.

Again, there could have been many reasons for the decrease in spending on transportation and equipment and not just because of unfavorable weather or one fewer Sunday as again inflation and the decrease in disposable incomes might have been the main reason and the less than good weather of course might have been a reason to wait and travel later and save a little more for future travel.

Yes, private consumption or consumer spending is about half of Japan's GDP but at the same time, it seems, Japanese households and consumers are spending less due to the decrease in disposable or extra income and of course due to the continued increase in inflation in Japan these days.

A 2.0 percent increase in real income, while good, is a good estimate but to be fair, what about the income of the lower-income groups too which might be a better indicator or metric about what is going on in Japan.

A description of just the middle-income group or even the upper-income group is not a good description of what is really happening in Japan as just examining to middle and upper-middle groups doesn't give the complete picture of what is happening in Japan.

As again looking at the lower-income groups, the part-time worker groups and even the contract workers groups in Japan might give a complete picture of the state of the economy in Japan and of what is really happening in Japanese society these days.

Have a nice day

Article source:  https://mainichi.jp/english/articles/20260807/p2g/00m/0bu/005000c

Japan Planned Food Cuts: Ideas Later.

Japan's planned food tax cut faces consumer, retailer skepticism

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TOKYO -- Japan's Cabinet on Aug. 5 approved a policy to cut the consumption tax rate on food and beverages from 8% to 1%. However, with prices continuing to rise and the reduction set to apply for only two years from April 2027, the plan has drawn a cool response from consumers and retailers. The restaurant industry, where the 10% rate is expected to remain in place, has also voiced concerns about the impact. Will Japan's first consumption tax cut since the tax was introduced prove effective?

"When it returns to 8%, the impact will be substantial, so I can't simply welcome the cut," said Emi Hashimoto, 42, a financial planner in Tokyo's Shinjuku Ward who is raising six children, from a first grader to a second-year high school student.

With her children at growing ages, the family's monthly food bill, excluding meals out, comes to about 100,000 yen (roughly $630). In 2024, she managed to keep the monthly total to around 60,000 yen (approx. $380), but relentless price increases are now weighing heavily on the household budget.

The tax cut would theoretically reduce the family's monthly burden by about 7,000 yen (around $44). But Hashimoto is skeptical.

"Stores that have held off on raising prices may do so when the tax cut takes effect, and the costs of adjusting to the new rate may also be passed on to consumers," she said. "I doubt we'll actually save the full 7,000 yen."

"In the end, the tax cut is essentially another giveaway," she added. "Rather than spending so lavishly, the government should tighten its belt, eliminate waste and stop unnecessary spending."

Retailers weigh the impact

The more consumers spend, the greater the benefit they would receive from the tax rate cut. But how do retailers selling high-end food products view the measure?

About 40 pieces of Wagyu beef are displayed at Tokyo Cowboy, a butcher shop in Tokyo's Setagaya Ward. Popular items include cuts such as "ichibo," or top sirloin cap, and "misuji," or top blade, priced at around 2,500 yen (roughly $16) per 100 grams.

A 600-gram purchase for a family would cost 15,000 yen (about $95), with the tax cut reducing the consumption tax by 1,050 yen (roughly $6.70). The benefit may appear substantial, but the shop is not entirely optimistic.

According to company President Nozomi Ueno, 53, many customers place greater importance on the quality and value of the meat than on its price.

"It's hard to imagine the tax cut producing a major boost in foot traffic," he said.

Although the tax burden on purchases by the shop would be reduced, continued increases in the cost of ingredients and packaging materials could still force it to raise prices.

"I don't know whether we'll be able to pass the full savings on to customers," Ueno said.

Concerns in the restaurant industry

The proposed cut is expected to follow the reduced-rate system introduced in October 2019, excluding dine-in meals. If so, the tax rate on dine-in meals would remain at 10%, while the rate on takeout food would fall from the current 8% to 1%, widening the gap.

On July 14, the Japan Foodservice Association and other industry groups issued an "emergency message on reducing the consumption tax rate on food products."

They warned that the difference in tax rates "would put dining out at a price disadvantage, affect the many job roles that sustain the food service industry and place a heavy burden on the management of various restaurants."

An association official said, "Restaurants have told us they are concerned that the difference in tax rates will discourage consumers from dining out."

A 53-year-old man who operates a stand-up soba shop in Tokyo said, "The tax cut may lower my purchasing costs, but considering how customers would react if I raised prices when the tax rate returns to 8% in two years, I can't lower my prices this time."

Facing higher operating costs, he had just increased the price of a basic bowl of hot soba from 430 yen (about $2.70) to 480 yen (around $3) in June.

"I just hope we won't have to compete with takeout businesses covered by the tax cut or with restaurants that lower their prices," he said.

Article source:   https://draft.blogger.com/blog/post/edit/2653803302921314930/1150161409062193337

Japan Editorial: Ideas Later.

Editorial: Japan needs basic economic policy review, not reliance on US, to stop yen's slide

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The responsibility for securing confidence in the yen as a currency rests with the Japanese government. Relying on the United States will not overcome the negative spiral of a weaker yen and higher prices.

In response to the yen's historic depreciation, the Japanese and U.S. governments have moved to buy yen in the market. It is the first coordinated intervention in 15 years, since 2011, when the yen surged immediately after the Great East Japan Earthquake. It is the first yen-buying intervention in 28 years, since 1998, when Japan fell into a financial crisis over bad-loan problems at Japanese banks.

Such a move is unusual outside of a major disaster or a global economic crisis. That is because it could distort financial markets.

This time, the political calculations of Prime Minister Sanae Takaichi's administration and the administration of President Donald Trump in the United States aligned. Japan had repeatedly intervened on its own to buy yen and sell dollars, but those efforts failed to correct the yen's weakness, and Tokyo had been hoping for help from Washington.

With congressional midterm elections coming in November, the United States was concerned that the negative effects of "selling Japan" -- a simultaneous weakening of the yen and rise in long-term interest rates -- would spill over into its own economy. U.S. Treasury Secretary Scott Bessent, who led the coordinated intervention, was deeply wary that turmoil in Japanese markets would push up U.S. long-term interest rates.

Japan has, in effect, incurred a major debt to the United States. President Trump has been emphasizing that Japan "wanted a little bit of help." Washington may seek something in return, such as the early completion of the $550 billion, or about 86 trillion yen, in investment in the United States that Japan promised under the Japan-U.S. tariff agreement.

The Takaichi administration is touting the move as "the completed form of the Japan-U.S. currency alliance," but intervention alone will not easily reverse the stream of yen selling.

At the root of the yen's weakness is market distrust of the Japanese government's economic policies, which disregard fiscal consolidation and independent monetary policy.

The U.S. side argues that an early interest rate hike is essential to correcting the yen's weakness. Monetary policy, however, is something the Bank of Japan should decide. To put the brakes on the weaker yen and higher prices, it is only natural to raise the policy rate, which is far too low relative to the inflation rate.

It is also essential that the Takaichi government change its irresponsible fiscal policy. If it forces through a consumption tax cut without identifying a funding source or presses ahead with fiscal expansion, long-term interest rates will rise further.

There are limits to the stopgap method of coordinated intervention. It is time for the Japanese government to review economic policy itself to restore market confidence.

Article source:  https://mainichi.jp/english/articles/20260805/p2a/00m/0op/017000c

Japan Real Wages: Ideas Later.

Japan real wages in June rise for 6th straight month on summer bonuses

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TOKYO (Kyodo) -- Japan's real wages in June rose 1.6 percent from a year earlier, increasing for the sixth straight month in the longest positive streak since a seven-month run in 2021, reflecting higher summer bonuses, government data showed Wednesday.

Nominal wages per worker, including base and overtime pay, were up 3.4 percent at 531,677 yen ($3,370), marking the fifth straight month of growth exceeding 3 percent and the first such streak in more than 34 years, the Ministry of Health, Labor and Welfare said.

The latest growth in inflation-adjusted wages matched an upwardly revised 1.6 percent rise in May and came as the inflation index used for the data climbed to 1.9 percent in June from 1.7 percent in the previous month.

Wage growth was supported by a 3.5 percent increase in special earnings, mainly bonuses, to 232,445 yen, as this year's robust "shunto" labor-management negotiations kept pressure on the corporate sector to raise pay.

Data released Tuesday by the Japan Business Federation, the country's largest business lobby known as Keidanren, showed that major companies agreed in the talks to raise wages by 5.37 percent on average, surpassing 5 percent for the third straight year.

The organization also said summer bonuses at major firms were up 1.88 percent on average from a year earlier on the back of healthy corporate profits, topping 1 million yen for the first time since comparable data became available in 1981.

While the yen's sharp fall has pushed up import costs, Japan's consumer prices have remained below 2 percent due in part to government measures to keep down gasoline and other energy prices, helping real wages to stay in positive territory.

Economic analysts, however, warn that the pace of inflation in resource-poor Japan is likely to accelerate later this year as more companies are expected to pass on rises in raw materials and labor costs to retail prices.

Solid wage growth and stable price increases are key conditions for the Bank of Japan to continue lifting interest rates as it seeks to normalize its monetary policy after a decade of unorthodox easing that ended in March 2024.

The central bank left the benchmark policy rate unchanged at 1.0 percent at its meeting last month, but Governor Kazuo Ueda signaled more rate hikes, flagging upside risks to inflation and citing factors including the weaker yen, which drives up import costs.

Article source:  https://mainichi.jp/english/articles/20260805/p2g/00m/0bu/017000c

Japan Food Exports: Ideas Later.

Japan farm, food exports up 10.9% to record high in 1st half of 2026

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TOKYO (Kyodo9 -- Japan's exports of agricultural, forestry and fishery products and food products in the first half of 2026 rose 10.9 percent from a year earlier to 897.7 billion yen ($5.7 billion), a record high for the period, the government said Tuesday.

Shipments to all of Japan's top 10 destinations, including the United States and Hong Kong, exceeded year-before levels, pushing the overall total to a new January-June peak for the second straight year.

By product, green tea posted a notable gain, supported by a global matcha boom, with the Ministry of Agriculture, Forestry and Fisheries saying that growing inbound tourism has raised overseas awareness of Japanese food.

Rising health consciousness also contributed, while new sales channels expanded at supermarkets and restaurants abroad that had not previously handled Japanese food. But the pace of export growth slowed from 15.5 percent in the first half of 2025.

Among the top 10 destinations by export value, eight countries and regions, apart from second-ranked Hong Kong and third-ranked China, marked first-half records. Exports to Hong Kong increased 3.0 percent, while those to China grew 4.3 percent.

Exports to South Korea rose 20.5 percent, with yellowtail and beer showing solid gains, while those to Vietnam jumped 35.4 percent on strong demand for scallops and mackerel. The United States ranked first, up 15.3 percent to 162.6 billion yen.

Green tea, beef, apples, and sauces and mixed seasonings registered record highs for the January-June period. Green tea surged 83.5 percent to 48.2 billion yen, while yellowtail surged 69.0 percent to 43.4 billion yen.

Demand for the tea as an ingredient for lattes and sweets grew. Yellowtail exports to North America and South Korea remained firm, while prices increased. Rice exports fell in volume terms due to shortages but rose in value to a record 7.5 billion yen on higher prices.

Article source:  https://mainichi.jp/english/articles/20260804/p2g/00m/0bu/030000c

BOJ Keeps Key Interest Rate Unchanged. Ideas Later.

BOJ keeps key interest rate unchanged, lifts economic outlook for FY 2026

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TOKYO (Kyodo) -- The Bank of Japan on Friday kept its benchmark interest rate unchanged at around 1.0 percent after raising it to a 31-year-high last month while revising upwards its economic outlook for the current fiscal year, which started in April, despite ongoing Middle East tensions.

After a two-day policy meeting, the central bank said it will continue to raise the rate to stably achieve 2 percent inflation target, vowing to adjust the timing and pace by examining the Middle East development, expansion in artificial intelligence-related demand and the developments in foreign exchange rates.

In the latest quarterly economic outlook report, the central bank said it expects the Japanese economy to grow 0.6 percent in fiscal 2026, compared with its earlier projection of a 0.5 percent expansion.

While the U.S.-Iran conflict is expected to weigh on economic activity for fiscal 2026, the economy will be supported by factors such as the increase in global AI demand, the BOJ said.

For fiscal 2027, the central bank lifted the outlook to an expansion of 0.8 percent compared to 0.7 percent forecast earlier, noting that the negative effects of high crude oil prices will wane and that a "virtuous cycle from income to spending will gradually intensify."

Core consumer prices, excluding volatile fresh food, are estimated to rise 2.5 percent in fiscal 2026, against the 2.8 percent forecast in April.

With businesses continuing moves to pass on wage increases to sales prices, high crude oil prices and a weak yen, the bank said the consumer price index is likely to "accelerate to a level clearly above 2 percent from the second half of fiscal 2026."

"As for underlying CPI inflation, there is a risk that it will deviate upward to a level above the price stability target of 2 percent," it said in the report.

Of the nine Policy Board members, Hajime Takata voted against the action to keep the key short-term interest rate unchanged and called for a hike to around 1.25 percent, citing the need to respond to upside risks to prices.

Article source:  https://mainichi.jp/english/articles/20260731/p2g/00m/0bu/022000c