Japan Economy News:

 https://mainichi.jp/english/articles/20210109/p2g/00m/0bu/015000c

Article:

TOKYO (Kyodo) -- A key index reflecting the current state of the Japanese economy fell in November for the first time in six months, due to sluggish retail sales affected by a surge in coronavirus infections, government data showed Friday.

The Cabinet Office's preliminary data for the coincident index of business conditions in the reporting month edged down 0.3 point from the previous month to 89.1 against the 2015 base of 100. It followed a 4.6 point rise marked in October.

But the office maintained its assessment that the Japanese economy is "bottoming out" after upgrading it in August from "worsening," the most pessimistic of its five evaluation levels.

Ideas:

A rise in October of course meant there was a little more people who were positive than negative.

But at the same time an index measurement of 89.1 from 89.4 is not much of a difference, which means there are those are more pessimistic than there are positive.

But what really does the index measure? Can it really read the minds of consumers as to what they want and or are going to do?

Indexes are important for understand general trends but can they really figure out the thinking of consumers or people?

Article:

A third wave of infections, by far the largest yet, has been observed across Japan, forcing Prime Minister Yoshihide Suga to declare another state of emergency on Thursday.

"The number of virus infection cases began to increase in November, and we believe that it more or less affected the index," a government official told reporters.

The official added warmer-than-usual temperatures in the reporting month also cut demand for winter clothes.

Ideas:

Yes, no doubt, it might have affected the index, and yes it can be a very good indicator of future trends and or what happened in the past.

But businesses and such should still use their data and intuitive sense to see what is happening.

Kenichi Ohmae, in the long time best seller, "The Mind of the Strategist" mentions that intuitive thinking in strategic thinking/planning was a lost art, that some businesses don't use today. Of course that was 30+ years ago.

I think its still relevant today. If we become too dependent on statistics only the decide what do to. Instead of using our business instincts we become too accustomed to all the statistics that come as a way decide new strategies to move forward

Of course all a business has to do is see in their stores, restaurants etc. that there are less customers and less sales.

while indexes and statistics are very good, there is still the need for basic intuition for a company, a business person, etc. 

Of course the best way is to use both tools. Use the statistics and see what they say then use your intuition to figure out what is really happening and use your intuition to figure out what really is the best strategy to move forward.

Article:

The reading had significantly recovered after posting 71.7 in May amid the government's first state of emergency declaration over the pandemic. But it has been still at a low level if compared to the 94.5 marked in February, when the virus began to spread across the country.

The figure for May was the worst since 71.1 logged in April 2009 in the aftermath of the global financial crisis. Japan completely lifted the declaration late that month, after declaring in early April.

The leading index of business conditions, forecasting the situation in the coming months, rose 2.3 points to 96.6 in the reporting month, up for the sixth straight month.

Ideas:

Again indexes are a good way to see what happened, is happening, and to see what might happen in the future

But indexes, just like other statistics, should not be the only way to think about what have happened and or what might happen.

Indexes, in this situation, try to measure, correctly, what people think or feel. While it is a fair estimate, you are dealing with people and people, for the most part of sometimes unpredictable and or can change their minds very quickly, and the same with businesses.

So all indexes, while they try to explain what might have happened, need to be seen as just a number, but use your tuition to help figure out what is really happening.

Reference: 

Ohmae, Kenichi. 1982. The Mind of the Strategist. New York: McGraw-Hill, Inc.

Have a nice day and be safe!