Japan Govt. View on Economy:

 https://mainichi.jp/english/articles/20210324/p2g/00m/0bu/020000c

Article:

TOKYO (Kyodo) -- The government on Tuesday retained its monthly economic assessment, saying weakness has been seen in some sectors as consumption remains sluggish due to the continued impact of the coronavirus pandemic.

A recovery in Japanese exports has been slowing, the Cabinet Office also said in the report, downgrading its view on the component for the first time in 10 months. Meanwhile, its views on business sentiment as well as the trend of bankruptcies were lifted amid signs of improvement.

"The Japanese economy shows weakness in some components" and remains in a "severe situation due to the coronavirus pandemic" although it continues to show signs of picking up, the office said in its overall assessment.

Ideas:

The Japanese economy will probably not be firing on all cylinders for a very long time.

Exports maybe eventually come back but other very important parts of the economy could take a year or more.

More specifically services and tourism might take even longer to reach pre-pandemic levels.

While many people are out and about, that doesn't mean they are out spending as before.

Its easy to see a lot of people at Shibuya crossing on You Tube, and in the stores or at Starbucks, but that is not the whole economy.

And economy is very complex and as such, there are many parts that will take a long time to recover

Article:

Last month, it downwardly revised the assessment for the first time since April last year during a state of emergency in Tokyo and other areas over the pandemic, which led authorities to demand people refrain from nonessential outings and restaurants and bars close early.

The emergency, declared in January, was fully lifted on Sunday.

Among components, the latest report continued describing private consumption as being "in a weak tone recently."

Ideas:

Yes consumption might not be where is should be. But that has always been a challenge for the Japanese economy.

Its seems that for the size of the Japanese economy, the 3rd largest in the world, consumer spending is not at level or potential it could be.

Part of the reason, of course, is the number of older citizens in Japan. Older citizens tend to spend less than younger age groups.

But if you look at the 20-65 age groups in Japan, it has been reported the amount of spending in the 20-65 age groups in Japan are equal to any 20-65 groups in any OECD country.

But the 65+ age groups in Japan, some reports say up to 30 percent of the population is getting larger each year.

Article:

Exports are "increasing at a slower pace recently," it said. The lower assessment is due largely to weaker growth in auto exports to the United States, an official of the Cabinet Office said.

As for how companies view the current business conditions, the government upgraded the category for the first time in eight months, citing "movements of picking up." But it added that "some severe aspects remain."

On bankruptcies, which had been on the rise due to the pandemic, the report said the number is now "decreasing," in the first upward revision in three months.

Ideas:

Exports might be a little slow but in another nearby country exports are beginning to pick up a lot.

And these two countries usually compete with the same kinds of products.

So it seems logical that Japan's exports are going to eventually start to increase too.

Business sentiment is always hard to predict. The Bank of Japan and or the Japanese government can take surveys, but these are usually only related to big companies and the Japanese economy is more than than large companies that always make the news.

And just what does "now decreasing" really mean? At what level are the bankruptcies decreasing is the question.

Article:

Looking forward, the government said Japan's economy is expected to recover on a pickup in overseas economies. But it also said the outlook largely depends on development in the pandemic.

"The emergency was lifted but I don't think it means that the situation over the virus has changed much. I believe people will remain cautious and refrain from going out to some extent," the official said.

Ideas:

If global demand begins to increase then there might be substantial increase in Japanese exports.

As more countries increase the number of citizens getting vaccinated it could be an increase in overall global demand.

But then there is still on the on-going problem of the virus variants spreading globally.

A lot remains to be seen just what is going to happen in the coming months.

Have a nice day and be safe!