Japan Convenience Store Sales:

 https://mainichi.jp/english/articles/20200923/p2g/00m/0bu/095000c

Article:

TOKYO (Kyodo) -- Convenience store sales in Japan fell 5.5 percent in August from a year earlier, marking the sixth straight month of decline, due to fewer customer visits amid the prolonged coronavirus pandemic, an industry body said Wednesday.

The decline of sales in the reporting month improved from a 7.4 percent decrease in July, as ice cream and other summer items sold well due to scorching heat across the country, the Japan Franchise Association said.

Ideas:

Most likely the decrease in convenience stores sales were mostly those near the city centers where there are a lot of large company workers, as since March 2020, most likely many company workers were working from home and not visiting the convenience stores near their work places go get their lunch bento, their Itoen green tea, and or their onigri for lunch.

The convenience stores near where they live were probably not as affected, although they too might have seen less customers as people were visiting all places less, and maybe buying more at one time to avoid having to go back many times.

Article:

In August, same-store sales at seven major convenience store operators totaled 905.94 billion yen ($8.62 billion), down from 958.82 billion yen a year before.

The number of shoppers dropped 9.3 percent from the previous year to 1.35 billion, compared with a 14.0 percent plunge in the previous month, reflecting an increasing number of people working from home and refraining from nonessential outings, the industry body said.

Ideas:

The key phrase here is nonessential outings, whether to restaurants, supermarkets, and even multiple visits to convenience stores or conbinis.

Again, most likely if a person did go to the supermarket, they might have actually bought more than usual to avoid having to go back again, maybe in the same week or even two weeks if possible.

Supermarkets were probably not as affected as customers still have to buy the daily essentials needed for everyday living.

And at the same time, it has been reported that some supermarkets and other places were finding ways to keep their customers such as innovative pickup services to make sure the customers feel safe, and of course providing either online purchases and or delivery services by supermarkets and or delivery services companies including motor scooter type services by some startup or new companies.

Article:

Average spending per person rose 4.2 percent to 671.7 yen due to robust demand for food items, alcoholic beverages and hygiene products, including face masks, it said.

Sales in the service category, such as concert and sporting event tickets, sank 23.6 percent from the previous year, which was worse than the 16.2 percent drop in July.

The overall number of convenience stores in Japan climbed 0.2 percent to 55,841 from a year earlier, growing for the fifth consecutive month.

Ideas:

Its not a surprise that many services type businesses saw decreases in sales and profits and people avoided going to place where there would be a lot of potential contact with other people.

The increase in the number of convenience stores could mean several things. The first being the entry into the convenience store market, even during a pandemic is low, meaning barriers to entry are low.

The second might be that there might have been those who needed to keep working because of lost work/jobs, retirement and they felt running convenience store franchise might be something they could do.

Also, possibly, before the pandemic, there were many stores that were planning to open and still continued to open despite the pandemic.

But at the same time it doesn't say if there were any closings due to the pandemic or other challenges.

Have a nice day and be safe!

Bank of Japan Policy:

 https://mainichi.jp/english/articles/20200917/p2g/00m/0bu/075000c

Article:

TOKYO (Kyodo) -- The Bank of Japan left its ultraloose monetary policy unchanged Thursday to support the economy amid the coronavirus pandemic, with Governor Haruhiko Kuroda expected to announce the central bank will closely cooperate with new prime minister Yoshihide Suga.

At the end of its two-day policy meeting, the central bank maintained short-term interest rates at minus 0.1 percent while guiding long-term rates to around zero percent. It will also continue with measures to facilitate fundraising by struggling companies.

Ideas:

The Bank of Japan's low interest rate policy can have some positive effects and some negative effects.

On the positive side businesses and consumers will be able to get some easy money at lower rates which will then of course is expected to be used in the economy to increased needed economic activity.

At the same time, if banks follow the Bank of Japan's policy suggestions with the low interest rates in might mean they will not profit as much as the want from the low interest rates.

So that of course means they will need to find other ways to make up for the loss of profits from the low interest rates by charging higher fees related to other services they provide.

And its good during the current pandemic that continue to find ways to help struggling companies but at the same time, don't put any pressure on the companies with extra debts burdens which they don't need at this point.

Article:

"Japan's economy has started to pick up with economic activity resuming gradually, although it has remained in a severe situation due to the impact of the novel coronavirus at home and abroad," the BOJ said in a statement.

Under its massive asset-purchasing program, the bank will keep buying government bonds from financial institutions without setting a limit and exchange-traded funds at an annual pace of 12 trillion yen ($114 billion).

Ideas:

Whatever the Bank of Japan can or is wiling to do is good for the Japanese economy as there are many businesses and families who are struggling at the this time.

This is not the time to say let the market decide the winners and loser or let the market decide who will survive and who will not.

These are unprecedented times and its good for central banks and governments to do as much as they can to help those in need.

There is nothing wrong with some Keynesian economics or strategies when the market can't help itself. 

The Japanese economy most likely is going to remain in a severe situation for a long time as the pandemic doesn't appear to be ending anytime soon.

Article:

The BOJ maintained support measures for corporate finance, including providing cheap funds to banks that extend interest rate-free loans to struggling companies under a government program and buying up to 20 trillion yen in corporate bonds and commercial papers from lenders to ensure ample liquidity in the banking system.

Suga launched his Cabinet on Wednesday, inheriting former Prime Minister Shinzo Abe's "Abenomics" policy mix of monetary and fiscal stimulus and structural reforms.

The BOJ had joined Abe's efforts to beat chronic deflation in Japan, introducing unprecedented monetary easing programs to lift the country's inflation rate to 2 percent, the goal that the bank has failed to achieve for more than seven years.

Ideas:

If the BOJ does provide support measures and if the banks follow through with actually giving cheap funds also to the companies that need them then its a good thing which helps struggling companies.

But if some banks decide to not provide the cheap funds but add on some other fees to cover cost or help with the banks profits it defeats the purpose of what the BOJ is trying do to.

But the important idea, as stated, it ensure an amble supply of liquidity in the economy for struggling companies and struggling families too. 

At the present time deflation might be the least of the BOJ's worries, as there are too many companies and families that are just trying to survive.

The BOJ should focus on the 2.0 inflation target at a latter date, as consumer demand at this point most likely is just too low to see any kind of inflation increase.

But at the same time, the only way there might be an increase in inflation is from the supply side, for example if supply prices begin to increase too fast and suppliers will eventually have to decide how much of their costs to they "pass on" those along the chain.

But as consumer demand and maybe business demand is not too good, most likely suppliers are not going to pass on the costs just yet and take a wait and see approach.

And then there is the possibility of the increase in energy costs which could effects businesses, car owners, and families and energy costs will increase such as electricity, heating oil, and so on.

Have a nice day and be safe!