Japan Household Spending:

 https://mainichi.jp/english/articles/20210108/p2g/00m/0bu/040000c

Article:

TOKYO (Kyodo) -- Japan's household spending rose a real 1.1 percent in November from a year earlier, with a rebound from the previous year's drop due to a tax hike outweighing a decrease amid a resurgence of coronavirus infections, government data showed Friday.

Average spending by households with two or more people in real terms was 278,718 yen ($2,700), up for the second straight month, according to the Ministry of Internal Affairs and Communications. It increased 1.9 percent in October.

The figure had fallen for 12 straight months through September mainly due to a consumption tax hike from 8 percent to 10 percent implemented on Oct. 1, 2019, as well as the impact of the pandemic since last spring.

Ideas:

Its not surprising that consumer/household spending rose in November, as in November 2019 consumers were still thinking about or worried about the consumption tax hike from 8 percent to 10 percent.

The 8 percent to 10 percent was probably not that big a deal for many products but the media has made such a big deal of it that consumers were either confused and or worried about just a 2 percent increase.

And yes, there are some or many with lower incomes or even middle incomes that even a 2 percent increase might have caused concern or worry, especially with big ticket or even medium ticket items.

I was in Japan, Yokohama in the September of 2019, during the Rugby world cup, not there for that but for other reasons, and at Yokohama station and places, its seemed like everyone was in a spending frenzy with all of the stores sales etc. before the tax came into affect.

Article:

Meanwhile, seasonally adjusted spending in November fell 1.8 percent from the previous month for the first decline in four months. The month saw the start of a third wave of virus infections with daily numbers of cases continuing to rewrite record levels.

"Consumption of some items increased in reaction to (falls in the previous year triggered by the tax hike), but at the same time, declines in spending on components such as eating out widened as virus infections spread," a ministry official told reporters.

The virus resurgence has gathered strength, forcing Prime Minister Yoshihide Suga to declare another state of emergency in the Tokyo metropolitan area on Thursday.

Ideas:

So in November you had  different forces in play; You had consumers by now accepting the 2 percent tax increase and compared to November 2019 were beginning to spend again.

You had consumers, who might have not spent as much in the Spring but were no beginning to spend a little more.

And then you had the possible third wave of the pandemic which might have caused some consumers to not spend as much.

So which factor had the most affect? Obviously the pandemic factor most likely has had the greatest affect as consumer spending has reduced consumer spending.

Before the third wave, as usual, consumers maybe can only wait so long before they want to get out and about and visit stores, restaurants, and other places.

And or they want to spend online etc. instead of going out.

Article:

Effective through Feb. 7, the emergency entails requests for residents to stay home, and for service providers such as restaurants, bars, department stores and entertainment facilities to shorten their operating hours.

"It is inevitable that some negative effects will occur," the official said.

By category, the official said so-called nest-dweller consumption grew in November, as utility costs and outlays for furniture and household utensils soared 10.6 percent and 10.8 percent, respectively. Expenditures on foodstuffs such as meat and vegetables for cooking at home were also up 1.7 percent.

Spending on drinking dived 57.4 percent, a sharper decline than the 36.3 percent drop in October.

Ideas:

Yes, unfortunately, there will/has been some negatives related to the new emergency measure and or the old/new emergency measures.

And it inevitable that some product sales grew such as those needed for the home and or products that needed to be replaced etc.

Foodstuffs no doubt would have risen during the same time.

However, this is the perfect time for restaurants and other places to innovate and provide either takeout services and or delivery services and maybe some consumers would be more than willing to get takeout and or get a delivery from restaurants if the services were available.

Spending on drinking no doubt decreased as workers/employees were not working their offices but working from home, and as such didn't meet other workers for drinks when their long workday ended.

Article:

Outlays for domestic and overseas package tours plunged 55.1 percent, compared to the previous month's 27.0 percent fall, despite the state-subsidized "Go To Travel" campaign launched last July to boost the virus-hit domestic tourism sector.

The average monthly income of salaried households with at least two people rose a real 0.6 percent to 473,294 yen, up for the 11th month in a row.

Japan's first virus emergency was declared in Tokyo and six prefectures in early April last year and was expanded nationwide later that month. The measure dealt a major blow to the world's third-largest economy until it was completely lifted in late May.

Spending sank 16.2 percent in May last year, the sharpest decline since comparable data became available in January 2001, and 11.1 percent in April 2020.

Household spending is a key gauge of private consumption and accounts for over half of Japan's gross domestic product.

Ideas:

The travel industry and all those related businesses and industries were most likely the hardest hit areas in Japan related to the virus situation.

When foreign tourism drops over 90 percent it has to a major problem for many businesses and industries related to the tourism industry,.

The Japanese government should step in and help as many of these businesses as possible.

And of course all of those businesses who focus on domestic tourists, the government should also step to help them survive during the pandemic.

This is not the time for the phrase "Let the Market Decide" who should survive and who should not.