Mainichi: Japan core Consumer Prices:

https://mainichi.jp/english/articles/20200522/p2g/00m/0bu/031000c

Article:

TOKYO (Kyodo) -- Japan's core consumer prices fell from a year earlier in April, the first decline in 40 months, dragged down by lower oil prices and weak travel demand in the wake of the coronavirus pandemic, with further declines expected in the coming months, government data showed Friday.

The nationwide core consumer price index, excluding volatile fresh food items, fell 0.2 percent after rising 0.4 percent in March, the Ministry of Internal Affairs and Communications said, a far cry from the Bank of Japan's 2 percent inflation target.

"Energy prices, which have a big impact on consumer prices, could fall further in the coming months when the effect of oil price falls is mirrored in electricity and gas prices," a ministry official said.

Ideas: 

This is no surprise and low demand usually might mean a drop in prices. Of course the oil surplus also usually means lower prices in the oil market.

Of course there are always positives and negatives related to any economic action or activity. Lower prices might be good for consumers, in most situations, but not always good for businesses who need to make a profit. But at the same time, lower prices might enable them to actually stay in business, and the lower prices might be an incentive for consumer to buy. 

I was looking at the Japanese hotel site.. Jalian.net and the hotel prices are very low, extremely low as they are trying to get customers to come to their hotels. Also I was looking at Toyko Inn but they haven't reduced their prices. They are the same, for the most part, as before the virus situation. Correction; the single room prices seem lower while the double and twin seem the same as before. 

Article:

Analysts are keeping close tabs on whether the price trend will be deflationary going forward, which would hit companies' profits and may add downward pressure on wages.

The official said it is too early to say whether the latest fall, the first since December 2016, is a sign of deflation.

"We need to assess the situation carefully. Consumer prices are affected by various factors and are not limited to falls in demand" in personal consumption, he said.

In the reporting month, the price of kerosene and gasoline fell 9.1 percent and 9.6 percent, respectively, reflecting declines in crude oil prices triggered by concerns about the impact of the pandemic on the global economy.

Ideas:

Yes, its too early to say if the fall in prices will continue. As the country opens back up and more activity begins to gradually take place it might take several months for prices to stabilize and or prices to see a "real feel" meaning what the true prices will be in the economy. 

In another article that came out recently mentioned that company profits were in the black, and companies were sitting on huge cash piles. But of course we have to remember, not all companies are the large multi-companies and there thousands of small and medium sized companies that might be existing month to month without large cash reserves. Of course the need for the government and the Bank of Japan to continue to offer assistance as needed

Article:

Accommodation costs dropped 7.7 percent as inbound tourism was all but wiped out due to border restrictions imposed by the government to curb the spread of the virus.

Japan received an estimated 2,900 foreign travelers in April, down 99.9 percent from a year earlier, government data showed Wednesday. It was the first time the monthly figure has slipped below 10,000 since 1964, when the government began compiling such statistics.

Prices of outbound package tours fell 11.7 percent, but this did not reflect the effects of the pandemic, as such trips had been booked around January. Rather, the figure slumped due to comparisons with the previous year's longer-than-usual Golden Week holiday, which had boosted demand.

Ideas:

To be fair and honest, yes the need for protecting society, but at what cost is always the challenge. Again in economics and everything there are positives and negatives. A 93.3 percent drop in tourists surely has not been good for most businesses. 

And then in April a 99.9 percent drop. Can any economy, that for so long, and so many businesses that relied on international tourism, survive in this current situation. And how long once things begin to get back to a "new normal" before international tourism can come back enough to help some of the businesses that are still left. 

Yes, in 2019, Golden Week was unusually long because of the change in the Imperial Family situation. 

Article:

Among other items that were affected by coronavirus, prices of flowers fell 1.9 percent as organizers moved to downsize weddings and funerals to reduce the risk of infections.

Face masks, meanwhile, cost 5.4 percent more and fresh food 11.2 percent - with cabbages sprouting 48.2 percent - as more people stayed home.

Excluding the impact of a consumption tax hike to 10 percent from 8 percent and a free preschool education and nursery program, both introduced last Oct. 1, consumer prices fell 0.6 percent in April.

Ideas:

The virus situation affected prices in many ways. Some prices increases and some decreased depending on the situation. 

Depending on the situation, such as the use of flower as weddings and funerals, the demand for flowers obviously would be down, and the events were of course downsized. The same might be said for school graduations, if flowers were before, a part of graduations. 

Of course the cost of face masks would have gone up due to increased demand and maybe even a shortage early on the virus situation. 

The increase cost of fresh food could of course be attributed to more families eating at home instead of going to restaurants or even getting maybe take out bento meals. 

But overall a decrease in prices of 0.6 percent, might not be that big a deal. But at the same time, it might indicate consumers might have been spending less overall during the virus situation. 

Article:

Takeshi Minami, chief economist at the Norinchukin Research Institute, said prices related to services and private consumption reflected the impact of coronavirus in April when a nationwide state of emergency was declared, under which people were asked to refrain from nonessential outings.

"Due to deterioration in business earnings, the environment surrounding household income is becoming increasingly severe," Minami said.

"Even if the state of emergency is lifted nationwide, it is unlikely that life would go back to the pre-pandemic situation, so sluggishness in personal consumption is expected to be prolonged."

So-called core-core consumer prices, which exclude fresh food and energy, rose 0.2 percent from a year earlier, compared with an increase of 0.6 percent in March.

Ideas:

Yes, there is a definite decrease in personal income, which of course means less spending in the economy. And yes it will take time before incomes are back to some kind of normal. Most likely it could take up to a year before things get back to some kind of "new normal" where consumers feel good enough to spend at or near "pre-virus" levels.

But even now as things begin to open up with more and more economic activity taking place, consumer spending will begin to improve.

As I look at Shibuya scramble crossing everyday on You Tube I see more and more people getting out and about; returning to somewhat normal work routine, as much as possible, except for those who are working at home, and of course more and more beginning to venture out to restaurants and stores for some shopping and spending.

The economy is heavily dependent on consumer spending. It can't exist without it. Upwards of 60 percent of the Japanese GDP is dependent on consumer spending.

Have a nice day and be safe out there!

Mainichi: Japan Dept. Stores Sales:

https://mainichi.jp/english/articles/20200522/p2g/00m/0bu/104000c

Article:

TOKYO (Kyodo) -- Japan's department store sales in April fell 72.8 percent on a same-store basis from a year earlier, the largest monthly decline since comparable data became available in 1965, as government measures to combat the coronavirus pandemic forced many stores to reduce operations or temporarily shut, an industry body said Friday.

Interim data in May suggest an even steeper fall is possible in the month with sales in the first 18 days down around 85 percent, the Japan Department Stores Association said, although some recovery is likely in the latter half of the month after the government lifted the state of emergency for 39 of the nation's 47 prefectures on May 14.

Sales of 203 stores run by 73 operators totaled 120.8 billion yen ($1.1 billion) in the seventh consecutive monthly fall, the association said.

Ideas:

Its no surprise that there was decrease in sales for April. If we look at all the possible activities taking place since 1965 there wasn't anything even close that would have hurt sales as much as this. Not even the so called "lost decade", which really wasn't a lost decade was like this. 

What might be interesting if and when the Japan Department Stores Association comes out with any information or data related to online sales of department stores. 

Most likely there might be a slight increase in online sales, but not that much as consumers most likely are refrained from any consumer spending except for only the most essential items which a consumer could get at a pharmacy, grocery store or conbini.

Yes,there should be some recovery in May but of course it won't be anything near the normal level of consumer spending. Even most likely for the last 12/13 day of the month of May.

Most likely consumer spending, when it returns to some level, will enter a "new normal" level of consumer spending for the rest of the year.

Also we can except more months of below normal consumer spending and eventually reaching what might be again a "new normal" level of consumer spending.

Article:

Duty-free sales dropped 98.5 percent on a same-store basis to about 500 million yen as the number of customers tumbled 99.5 percent for a third straight monthly fall to just 2,400 due to cross-border travel restrictions in and outside Japan to curb the deadly virus infections.

By product, sales of clothing and miscellaneous products such as cosmetics and jewelry fell 82.7 percent and 78.7 percent, respectively.

Those of food items sagged 53.0 percent, a comparatively milder decline than most other items, as many stores kept their grocery floors open.

Ideas:

Of course Duty-free sales would have had a large decrease as there were no international tourists, such as the large number of Chinese tourists that would buy the bulk of the Duty-free products. 

Sales, cosmetics, jewelry are items too are not a surprise in falling sales. But usually cosmetics, for a very long time, were kind of "recession" proof as women, mostly, would still buy cosmetics despite any downturn in the economy. But this situation is much different of course. 

A 53.0 percent decrease in food items, while not a surprise, is kind of a surprise. If many stores kept their grocery floors open, perhaps consumers were limiting the number of times they went to the grocery store to avoid large crowds.

As case in point is in Yokohama at Yokohama eki, station, with department stores such as Sogo and Mitsukoshi having large grocery floors. 

Whenever I would go to Sogo, the entrance and all areas near it were extremely crowded. And the grocery area in the back, but close to the entrance was always crowded and busy. As such customers maybe felt they wanted to avoid large crowds that are common at Sogo.

The same can be said for a small grocery store across from the Sony Plaza store in the basement area of Yokohama eki. Anytime I went there, just to admire all of the fresh food and bento offerings it was very busy.

Another case in point was 2019 Christmas eve, I went to a bread store near the grocery store, and with tradition, the grocery store was selling bento type roasted chickens for Christmas eve. 

And not to be out done by the grocery stores, in the walking areas of the station, there were many tables setup selling bento type roasted chicken. And lets not forget KFC which also was selling its chicken too. 

Have a nice day and stay safe!

BBC: Health and Wellness: How about Japan?

https://www.bbc.com/worklife/article/20200520-can-the-centenarian-olympics-help-you-live-longer

Ideas:

This is an excellent article about longevity, health, and exercise in some western countries. But I know this article can easily be  related to Japan as the Japanese live longer than most societies, except for a few of the "Blue Zone" areas.

But if I were to explore articles in Japanese I'm sure I would find many articles that are unique to Japan within the same context.

Especially if we consider running and the marathon in Japan. Yes not everyone runs in Japan and not everyone runs marathons in Japan.

For example it has been estimated that for the Fall 2020 marathons, before the virus situation, there might have been up to 300,000 marathon participants for the fall. Which might be higher than any other country in the world, including the US.

Of course Japan is obsessed with the marathon and running.

But for health and fitness, we also have to look at the Japanese lifestyle. For the most part Japanese cities are designed, whether intentional or not, that requires a lot of walking or bike riding and not just driving in a car like in the US or even South Korea.

So the average Japanese might not get the standard 10,000 steps each day but for sure they are most likely over 5,000 steps on most days. That doesn't mean everyone is getting 5,000 steps everyday but a lot might.

And if you add in hiking, which is a popular activity in Japan you have another part of the population that is active.

Then you have to look at the diet. Yes the Japanese diet is changing, and yes, there is maybe, sometimes, too much salt and sugar, but for the most part the Japanese diet is very healthy.

Even the idea of "white" rice. Yes some say its not so good, but white rice might be considered a neutral carbohydrate in that it doesn't cause too much harm to the body, if eaten in moderation.

So to summarize, if you add in marathon running or running, hiking, the design of Japan cities, which might require a lot of walking, and the Japanese diet, its easy to see why so many Japanese citizens lives to be over 100 and stay healthy.

Have a nice day and stay safe!

Mainichi: Japan Pro Sports Shutdown Affect: And Marathons In Japan

https://mainichi.jp/english/articles/20200513/p2g/00m/0sp/115000c

Article:

TOKYO (Kyodo) -- The economic cost of shutting down professional sports in Japan because of the coronavirus outbreak will amount to roughly 274.7 billion yen ($2.6 billion) by the end of June, a Kansai University economist said Wednesday.

Katsuhiro Miyamoto, a professor emeritus in theoretical economics, based his calculations on the size of the different pro sports markets in Japan. He studied the impact of canceling, postponing, or holding events behind closed doors and the subsequent loss in profit from food, drinks, merchandise and lodging.

Ideas:

Pro sports, in most industrialized or advanced economies, and even developing economies is a major industry. As such it can have an affect on many parts of an economy and society.

Its like the housing and construction industry in any economy. Housing and construction affect so many different areas/sectors of an economy and society, a shutdown in the housing industry can have huge affects, as most likely is happening globally.

But the pro sports industry can have an affect on so many different industries and sectors; advertising, television, retail, etc. and the list is limitless.

Article:

Miyamoto estimated that from January through the end of June the lack of pro baseball will result in a loss of about 72 billion yen ($673 million), with pro soccer's impact ringing in at 39 billion yen, sumo's at 5.6 billion yen, pro basketball at 4 billion yen and pro golf at 3.6 billion yen.

The downturn from the absence of other pro sports, Miyamoto calculated, will come to around 3 billion yen for a total loss of 127.2 billion yen ($1.2 billion) in direct costs.

In addition to direct costs, Miyamoto's end figure of 274.7 billion yen included the cost of indirect purchases at related businesses such as restaurants and the effect on consumption by employees of related companies.

"It seems that large organizations, teams, and clubs will manage to hold up, but I am concerned that many small organizations and clubs will take a considerable amount of time to recover," Miyamoto commented.

Ideas:

Exactly! The pro sports industry even affects many businesses indirectly such as restaurants where fans/consumers might to go after a game or might go there to watch a game and eat. So even bars, sports bars and such places will be affected.

And yes, lets not forget about employees and people. Whether those directly involved in the sports industry but also those indirectly affected, whatever business or industry it is.

Also: Marathons in Japan:

http://japanrunningnews.blogspot.com/2020/06/kobe-marathon-canceled-19444-finishers.html

Participation in marathons in Japan is huge. As you can see in the list in the Japan Running News blogspot.

Marathons bring huge sums of money into a community. So the economic losses are going to be big for these cities that have decided to cancel their marathon over the virus situation.

Have a nice day and be safe out there!

© 2020, Tom Metts, all rights reserved

Mainichi: Online Spending By The Elderly:

https://mainichi.jp/english/articles/20200513/p2a/00m/0na/015000c

Article:

TOKYO -- There has been a spike in the number of online purchases made by elderly people in Japan while offline transactions in physical stores are on the decline following the novel coronavirus outbreak, according to research conducted by a major credit card company.

As the elderly have a higher risk of developing severe symptoms if they contract the virus, the coronavirus pandemic may lead to advances in a shift to digital forms of shopping for this group of people.

Ideas:

Its only natural the some groups have less of the desire to buy online. But the situation now is not normal and as such more of the older groups are now forced to buy online when maybe it was not part of the normal shopping/buying patterns.

Also some might still find it challenging to buy online.

In that case companies should try to simplify online purchases as much as possible. It becomes a win win situation for companies and consumers.

Article:

Sumitomo Mitsui Card Co. examined the transaction data of a total of about 10 million customers' cards. Between April 1 and 14, the number of transactions through e-commerce sites and other forms of online shopping made by customers in their 70s had increased by 9.5% compared to the same period of the previous year. The amount of payments during this period had barely changed from the same time frame a year earlier, which suggests a trend in making more frequent purchases of low-priced products.

On the other hand, the number of offline transactions at supermarkets had dropped by 3.4% from the same period of the previous year, while transactions at convenience stores and electronic retail stores had also decreased. The amount of payments made at supermarkets had increased by 6.5%, suggesting an overall tendency of bulk buying, while reducing the number of visits to stores.

Ideas:

A 9.5 percent increase really doesn't seem that much considering the severity of the situation. More frequent online purchases but maybe buying either what is only needed and or more concern with price as consumers/families and whomever are worried because of job losses and the economy.

The drop in offline transactions/purchases is no surprise. Even at electronic retail stores is no surprise. But the decline in convenience stores, conbinis, is a little of a surprise, as consumers,office workers, would stop by a conbini on the way home, maybe, instead of going to a supermarket for something, such as buying a takeout dinner bento from the conbini. 

Most likely consumers were also worried about crowds at conveniences stores too.

Whenever I went to a conbini, especially 7/11 but all conbinis in Japan, the supply and variety of takeout conbini food was incredible.

But I wonder now, with the virus situation, do they still have the same supply and variety.

Yes, most like, there was a decrease in the actual visits to a supermarket and bulk buying was/is the trend, to avoid large crowds which are common at supermarkets and even department store.

Whenever I was in Yokohama and went to Sogo department store at Yokohama station, you couldn't walk in the store sometimes it was so crowded. Even the supermarket area in the back.

Further in the Yokohama station,eki, there is a small supermarket near Sony Plaza, a small brand name store, which usually attracts younger customers, but even this somewhat small but well stocked supermarket was always full with customers.

I would go there sometimes just to see all of the takeout bento type meals/foods that you could get. 

Article:

The number of online transaction cases for customers in their 20's saw a large increase, while supermarket transactions also rose for this generation as well.

A PR representative for the card company said, "The consumer behavior of the elderly, who until now apparently weren't used to online shopping so much, may change greatly prompted by the novel coronavirus."

Ideas:

The online shopping habits have been slow to develop compared to other countries, maybe because of the preference for cash by many.

But now because of the virus situation, maybe more and more Japanese consumers, including the elderly are going to purchase more online than before. 

Maybe it will be the new normal in Japan.

And at the same time it should not and hopefully won't affect those stores and places that place a priority on face to face customer service.

And stores and places need to find ways, if not already to embrace the new normal of shopping online but still have a store presence if at all possible.

Have a nice day and be safe out there!

© 2020, Tom Metts, all rights reserved

Mainichi: Japan Consumer Spending:

https://mainichi.jp/english/articles/20200508/p2g/00m/0bu/029000c

Article:

TOKYO (Kyodo) -- Japan's household spending fell 6.0 percent in March from a year earlier, logging the largest drop in five years amid government calls for the public to stay at home to curb the further spread of the new coronavirus, government data showed Friday.

Spending in real terms by households with two or more people was 292,214 yen ($2,750), the Ministry of Internal Affairs and Communications said.

A ministry official told reporters the spread of the virus reduced spending on activities such as eating out and leisure as people avoided nonessential outings.

Ideas: 

On the positive side, a drop of 6.0 percent is not good, but it could have been worse.  Most likely, even though this article doesn't talk about it, online spending might have increased for some sectors. For example maybe there were increases in sales for Amazon Japan, Rakuten, and other place. And then maybe for those places that already had some kind of online presence. 

But the overlying factor has to be consumers are worried and scared about job losses, income losses etc. and as such are holding back on spending.

And then there are the companies who are hurting because of decreases in consumer spending. 

Article:

Household spending fell for the sixth consecutive month since October last year, when the consumption tax was raised from 8 percent to 10 percent.

The 6.0 percent year-on-year decline was the steepest fall since a 10.6 percent plunge in March 2015 caused by a last-minute surge in demand the previous year ahead of a consumption tax hike from 5 percent to 8 percent in April 2014.

"So-called 'nest-dweller consumption' such as expenditures on foodstuffs for cooking at home increased, but the negative effect caused by people refraining from going out had more impact," the official said.

Ideas:

A decrease in spending because of the sales tax was a given. But most thought that by January of 2020 consumer spending would be close to normal before the sales tax increase. In 2014 after the sales tax increase from 5 percent to 8 percent consumer spending took only about  quarter, 3 months, to get back to what consumer spending was before the 2014 sales tax increase.

"Nest-dweller consumption" most likely would never make up for the losses related to consumer spending outside of the home. 

On the other hand, again, there has to be some gain related to online shopping and spending. It would seem natural or logical. 

However, again, consumers are worried about job losses and decreased incomes or even saving, and as such have maybe even refrained from some online shopping other than essential items. 

Article:

As for April, the official predicted the downward trend would continue due to the state of emergency declared over the virus pandemic by Prime Minister Shinzo Abe.

The declaration was issued on April 7 for Tokyo, Osaka and five other prefectures and later expanded to cover the rest of the country and extended to May 31.

"We shouldn't assume that the figure touched rock bottom in March," the official added.

By category, outlays for culture and recreation were down 20.6 percent, the largest contributor to the overall drop, with those for domestic and overseas package tours plummeting 83.2 percent from a year earlier.

Ideas:

The prefectures that were in a suggested lock down of course makeup the bulk of spending in the economy, or should we more politely say more consumer spending overall in those prefectures. 

Yes, most likely, unfortunately, April and even maybe May might be be like March or a little worse. But everyone is hoping the continued good weather might be an occasion to maybe, be cautious, and get out and spend some on outside activities.

Domestic travel, which also includes domestic spending, needs, with caution, to get back as quickly as possible. 

People weren't meant to be locked down in their homes for a long time.

There has got to be a better way to solve the virus situation instead of everyone being afraid to go out. But at the same time be cautious and safe. 

Article:

In the same category, meanwhile, expenditures on game consoles and software more than doubled and those on internet connectivity rose 12.4 percent, apparently reflecting longer hours people spent at home.

Food expenses overall fell 2.4 percent, with those on dining out decreasing 32.6 percent, while expenditures on meat and grains were up 10.3 percent and 9.5 percent, respectively.

Social expenses such as congratulatory money and outlays for suits and other formal clothing also declined. The official said those might have been caused by a spate of cancellations of various events including graduation ceremonies.

Ideas: 

Spending on items for use inside the home would of course increase. At the same time, I have noticed an increase in prices of notebook computers on Japan Amazon and US Amazon. Either from an increase in demand and or because of low supplies, due to supply and logistics challenges. 

An increase in internet usage would be logical and families are locked down at home, and company employees are working from home.

A 2.4 percent decrease in food spending might not be that big of a deal, except for the stores/places that would usually get consumer spending. A 32.6 percent decrease in dining out of course is very much expected as consumers shifted to eating at home. 

An increase in meats and grains, again, would be logical as consumers would buy those products and use them at home. However, sources inside Japan have said the there have been shortages of rice in some places. Even with a limit on the number of bags, of say 1 per customer, a family of four would go to the supermarket and each member of the family would buy one bag of rice.

The decrease in outlays also is not expected as many event were either cancelled, postponed or limited.

Article:

After adjusting for inflation, the average monthly income of salaried households with at least two people was up 1.5 percent this March from a year earlier to 490,589 yen.

Household spending is a key indicator of private consumption, which accounts for more than half of Japan's gross domestic product.

Ideas:

The idea that monthly income increased sounds good but that is the average. What is the high and what is the low, and what is the dispersion between the average and the low. Meaning there might be a large group below that number, especially if someone worked for a business that was hit hard by the virus situation.

Yes household spending or consumer spending makes up more than half of Japan's GDP, which means Japan, like all other countries can't go too long in the current situation. 

There are just too many variables or people involved in all kinds of sectors or industries that rely on consumer spending. 

The Bank of Japan and the government, while doing a lot, can't sustain every business and every family forever. 

The economy itself need to get back to some kind of "new normal".

Have a nice day and be safe out there!

© 2020, Tom Metts, all rights reserved

Mainichi: Japan Dept. Store Sales in April:

https://mainichi.jp/english/articles/20200501/p2g/00m/0bu/116000c

 Ideas:

Its understandable that sales would be down. It is however, a good time to try to transform some of the products to an online platform and sell as much as possible online. Yes, Japan, for the most part is all about face to face customer service. But the time is right to move to online selling for department stores. Maybe now and the future this is the future of shopping in Japan. Yes customers, especially older shoppers might prefer face to face shopping and or are not able to shop online. But the option should be made available and if a department store doesn't have an online presence now is the time to develop it.

Who knows when this situation will change. The sooner department stores can transform from just brick and mortar stores to stores with a good online presence, the sooner their sales may begin to come back.

Rakuten and Amazon Japan and many many others are probably doing just fine in this new business environment. Now is the time for brick and mortar stores to do the same. And any other brick and mortar if they haven't already.

Of course part of the drop in sales, maybe for everyone, is the uncertainty of jobs and salaries, as consumers are waiting, cutting back, or just don't have the extra income to spend at this time.

Have a nice day and be safe out there!

© 2020, Tom Metts, all rights reserved