Japanese Manufacturer Sentiment:

 https://mainichi.jp/english/articles/20210701/p2g/00m/0bu/024000c

Article:

TOKYO (Kyodo) -- Sentiment among major Japanese manufacturers in June improved to its highest level since December 2018, lifted by a recovery in demand in the U.S. and other overseas economies despite a blow from a global chip crunch, the Bank of Japan said Thursday.

The key index measuring confidence among companies such as automobile and electronics makers rose to 14 from 5 in March, marking the fourth straight quarter of improvement, according to the central bank's quarterly Tankan survey.

Confidence was at its highest since it stood at 19 in the December 2018 survey. Still, it undershot the average market forecast of 17 in a Kyodo News survey.

Ideas:

Business and or manufacturer sentiment, or feelings about the Japanese economy and global economy is improving, after a not so good spring 2020. 

And yes, despite the Q2 being a few quarters past, it was so bad much of the economy is still trying find its way out of it. 

Yes, it appears to be high, with the highest since December of 2018, but it always important to remember how fast it can decrease. So in a way the index has the potential to be very volatile.

The market may have estimated a value of 17 but the index was only 14, which indicates that maybe not everyone is optimistic, as there are many areas of the Japanese and global economy that are not doing so good.

Article:

The index for large nonmanufacturers, including the coronavirus pandemic-battered service sector, rose to 1 from minus 1 in the March survey, turning positive for the first time in five quarters.

The Tankan index represents the percentage of companies reporting favorable conditions minus the percentage reporting unfavorable ones.

The survey reinforced the view that while a recovery from the coronavirus pandemic fallout is being observed, it is still uneven, with nonmanufacturers lagging behind manufacturers.

Ideas:

The large nonmanufacturer index increase from minus 1 to 1 is really not that big of a jump and the service industry has been hit the hardest during the pandemic. But a positive is positive no matter how small it is.

The recovery will continue to be uneven for a very long time, as of this posting, the virus situation is spiraling out of control again, which means consumer spending might be less than expected or less than needed for a full or even partial recovery in the services sector.

The manufacturing industry appears to be headed in the right direction, minus the semiconductor chip challenges while the services sector has a long way to go to even begin to feel any kind of recovery.

Article:

"The chip shortage hurt confidence among automakers but it is expected to improve going forward, so the recovery trend in the manufacturing sector remains unchanged," said Yoshimasa Maruyama, chief economist at SMBC Nikko Securities Inc.

Automakers, the backbone of Japan's export-driven economy, have benefited from a pickup in demand in key U.S. and Chinese markets, helping boost confidence in the overall manufacturing sector.

Automakers' sentiment was positive at 3, though down 7 points from the previous survey, weighed on by a global shortage of semiconductors that has forced some automakers to curb production.

Ideas:

The chip shortage doesn't appear to be a serious a challenge as expected, even though there have been shutdowns related to the shortage. If the automakers sentiment, feeling, is still in the positive range it means they might not feel its really that bad or is not going to delay production or shipping too much.

But it must be understood that while manufacturing and car exports are an important part of the Japanese economy even saying export-driven economy, its not the entire economy as the Japanese economy is very complex.

It might be correct to say these days in the 21st century that manufacturing drives the economy. Yes it is an important part of the economy, but its not everything. 

The Japanese economy has grown into a diverse complex economy that actually now is a services oriented economy as are all advanced economies.

Article:

Such tight chip supply conditions have instead raised demand for equipment to make semiconductors, improving sentiment among production machinery makers, the BOJ data showed.

In the United States and some European countries where economic activity has been gaining momentum with the rollout of vaccines, inflation worries have grown.

Economists say such concerns have not materialized in Japan as inflation remains stubbornly low. But some in sectors such as food and beverage as well as metals voiced concern that rising materials costs would hurt profitability, a BOJ official said.

Ideas:

Whenever there is a challenge in one area, such as a chip shortage, it can be an incentive for new innovation such as new ways to produce chips.

And for example as restaurants were required to close early and as customers decided to stay home, many service sectors or companies were created to meet the new demand for home delivery by Uber Eats type companies or other companies, and even 7/11 started delivery services to meet the demands of consumers.

Inflation, if its related to consumer demand will continue to remain low in the short term and possibly long term, as the pandemic again as picked up steam.

As far as food sector is concerned that might be a different story and increasing material costs food companies eventually might have to "pass on" the rising costs to the next group in the logistics chain, whomever they might be, such wholesalers, restaurants, supermarkets, retail customers and so on.

Article:

With the impact of the COVID-19 crisis persisting, the speed at which people in Japan get vaccinated is expected to determine the pace of a recovery in the services sector.

Japan is accelerating its vaccination drive, providing shots in workplaces and universities in addition to local municipalities with about three weeks to go until the Tokyo Olympics starting on July 23.

Confidence among operators of hotels and restaurants remained deep in the negative, at minus 74, though it is expected to improve to minus 47 in the coming months.

Ideas:

Yes, the speed of people getting vaccinated is going to help the services sector. However, no one could see or have thought that the new virus situation was going to be this bad, and most likely will slow down the recovery of the services sector.

Confidence among hotel operators is going to remain negative for a long time. When the hotels lose the majority of its domestic visitors and then add in the million plus Chinese tourists, maybe for a monthly total, the hotels are not going to come back quickly.

Restaurants are in a similar situation. They most likely are not in as bad a situation as the hotels but for some, when the majority of you business is at night and or even late night and you add in the profits they get from the sale of alcohol, they most likely are not going to come back very quickly, if at all, as long as the virus situation continues to spiral out of control.

Article:

"The gap between manufacturers and nonmanufacturers (in recovery) will become narrower as vaccinations progress," Maruyama said.

Major cities such as Tokyo and Osaka emerged from the country's third state of emergency in late June, shifting to less severe anti-virus measures. But a recent rebound in coronavirus cases casts a pall over the outlook.

Large companies, defined as those with 1 billion yen ($9 million) or more in capital, expect a 9.6 percent increase in capital spending for fiscal 2021 from April.

Ideas:

Yes the gap will become narrower, but its now going to take much longer than expected as the virus situation is now out of control again, meaning many of the services sector businesses are not going to see much of a recovery just yet.

Capital spending may increase for the large companies, as some of the large companies might not be too affected by the virus situation.

At the same time, if companies expect a significant recovery in the near future or enough of a recovery in the near future, they might think now is the best time to capital spending to prepare for when the Japanese economy gets moving again.

Article:

Looking ahead, the index for manufacturers is projected to worsen slightly from 14 in the latest survey to 13 and that for nonmanufacturers to rise from 1 to 3.

Companies expect the U.S. dollar to trade at 106.71 yen in fiscal 2021, up from 106.07 yen in the March survey.

The BOJ surveyed 9,407 companies between May 27 and Wednesday, of which 99.2 percent responded.

Ideas:

With the latest virus situation getting worse in Japan and now globally too, some manufacturers are probably not to happy if it affect the demand for their products.

Nonmanufacturers who are most likely in the services sector might see some daylight but not much as the virus situation as now exploded again.

Regrading the currency exchange rate, exporters prefer a weak rate compared to a stronger rate. With a weaker rate exporters can get more from the sales of their products overseas. With a stronger currency rate, they lose more.

Importers are the opposite from what exporter need or want. They prefer a stronger rate, which means they have to pay less to import products, for example from the US.

Have a nice day and be safe! 

Japan Industrial Output:

 https://mainichi.jp/english/articles/20210630/p2g/00m/0bu/035000c

Article:

TOKYO (Kyodo) -- Japan's industrial output in May fell 5.9 percent from the previous month, down for the first time in three months, as carmakers and other manufacturers cut back on production due to a global chip shortage, government data showed Wednesday.

The seasonally adjusted index of production at factories and mines stood at 94.1 against the 2015 base of 100, the Ministry of Economy, Trade and Industry said in a preliminary report. The result followed an upwardly revised 2.9 percent rise in April.

Ideas:

Manufacturers might have cut back on production because of the chip shortage, but is it possible that they might have been able in the previous months to increase inventory so that if a cutback occurred they wouldn't lost orders or customers. 

In other words are the manufactures able to produce more than they want, expect, or need in case situations occur that they have to cut back.

And or was the shortage something that has been happening for a while, and the best they could do each month was to meet their estimated output and nothing more.

Article:

The 5.9 percent fall was the sharpest drop since a 10.5 percent dive was marked in May last year when the world's third-largest economy was hit hard by the government's first state of emergency over the coronavirus pandemic, declared the previous month.

By industry, the auto sector plunged 19.4 percent from the previous month following a 1.0 percent fall in April. The global shortage of semiconductors used in new cars forced automakers to cut production, a ministry official told reporters.

Ideas:

A resource such as semiconductors, of such great importance, you would think, manufacturers, if possible, would have multiple sources and not just rely on one supplier.

But the next question is how did the semiconductor chip market get into this situation. Was it preventable, weren't they able to produce enough chips to have a backlog of supply in case any scenario like this happened. 

Is this a logistics problem, a supply problem, a pandemic related problem, or suppliers not being able to find the resources needed to produce the chips.

While exports are very important for the Japan economy, they are not the entire economy. So yes, its not good but Japan no longer is just a manufacturing only economy like decades before. 

The Japanese economy is now a fully advanced services economy, so a 19.4 decrease in the auto sector, while an important part of the economy, is not everything in the Japanese economy.

Article:

Output in the electrical machinery and the information and communication electronics equipment sector sank 4.5 percent, as manufacturing of lights for cars and air conditioners was also affected by the semiconductor shortage, according to the official.

Makers of machinery used in production, including chip-making equipment, slid 5.9 percent after a 7.7 percent boost in output in the previous month.

Meanwhile, the overall decline was cushioned partly by a 7.2 percent gain in transportation machinery except for cars, as well as a 2.2 percent increase in chemical products.

Ideas:

Again despite the decrease in output in the above sectors, they are not the entire Japanese economy. Yes its not good but the Japanese economy should be able to maintain some kind of modest growth during the pandemic.

As the above results show, the Japanese economy, like any economy is very complex and made up of a lot of different areas or sectors. While some might be down, some are going to be up. That's just how an economy works, in the pandemics or in normal times.

As with any resource, such as semiconductor chips, do companies have agreements lets say globally, to find other sources of supply. Meaning if a company is running low of a resource can they find ways to get the resource globally.

But the chip shortage being global maybe many companies are having the same challenges and all companies are in the same situation, and unable to find chips sources from other companies.

Article:

The ministry maintained its assessment of industrial output, saying it is "picking up."

Based on a poll of manufacturers, the ministry expects output to rise 9.1 percent in June and decline 1.4 percent in July.

"Recovery in demand for domestic and overseas capital investment is expected to continue," the official said, while warning of further fallout from the chip crunch and the economic impact of the spread of coronavirus variants.

The index of industrial shipments decreased 4.7 percent to 93.1 while that of inventories dropped 1.7 percent to 93.1.

Ideas:

Output may rise in June but why a decrease in July other than the beginning of the Obon season which is the major summer holiday period in Japan, as maybe some companies will take a holiday during this time and some production might be shut down.

Capital investment is always dependent on the sentiment of companies, as do they see the economy improving in the future, or globally. 

And yes, the new virus variants are going to slow down the economy some, again, as the Japanese economy is in a roller coaster situation, meaning up and down as the pandemic continues on with no end in site.

The increase or decrease of inventories can usually mean two things. If there is a continued increase in inventories that might mean demand is not as good as expected and or a company overestimated what demand would be and now they have a lot of inventory just sitting and they overproduced.

The other side of the equation meaning if inventories are low, again they might have underestimated future demand and they can't meet demand. And then the situation now might be there is a shortage of resources to produce something, such as with the semiconductor chips.

Have a nice day and be safe!

Japan's Jobless Rate:

 https://mainichi.jp/english/articles/20210629/p2g/00m/0bu/020000c

Article:

TOKYO (Kyodo) -- Japan's unemployment rate worsened to 3.0 percent in May, hitting the highest level in five months, as a government state of emergency over the coronavirus pandemic was extended to more of the country, government data showed Tuesday.

The seasonally adjusted jobless rate rose from 2.8 percent in April, up for the second straight month, according to the Ministry of Internal Affairs and Communications. It had stayed in the upper half of the 2 percent range since logging 3.0 percent in December.

Ideas:

Japan has had and still has one of the lowest unemployment rates among advanced economies. While 3.0 percent might not be good for Japan, its still very good among many countries.

But even though the unemployment rate is only 3.0 it still doesn't tell the entire story about employment. Such as how many jobs in the economy now are part-time, temporary, and or contract jobs with little or no benefits.

After the 2008 financial crisis, many companies in Japan and globally started to shift their work force to more contract or temporary workers instead of the so-called full-time or even the so-called life-time jobs in Japan.

So is it possible that during the pandemic Japanese companies are going to increase the number of employees who are part-time, contract, or temporary workers.

An economy can't survive or grow correctly if there are too many temporary contract workers. Workers are consumers or spenders in the economy. If they don't have enough disposable income, or extra income, the are not going to use their money in the economy, except for their daily basic needs.

Article:

Separate data from the Ministry of Health, Labor and Welfare showed that the job availability ratio in May was unchanged from a month earlier at 1.09, meaning that there were 109 job openings for every 100 job seekers. It fell 0.01 point in April.

In the final week of the reporting month, 10 out of the nation's 47 prefectures were under a third state of emergency over the virus that was initially declared in late April for Tokyo, Kyoto, Osaka and Hyogo but expanded later.

Ideas:

Again what kinds of jobs are available for workers. If they are good paying jobs then the economy will grow correctly and move forward correctly. If they are not or if there are a lot of contract type jobs, which usually have a lower pay, then the workers are not going to feel good spending any extra income they have because they don't think its enough.

As such the Japanese economy, or any economy is not going to reach it full growth potential. Workers again, are consumers, and they need to feel good about about their jobs and their salaries and how much disposable income, or extra income, they have before they fully participate in the economy as consumers.

The new emergency measure, while most likely needed, might need encouragement to consumers to get out and spend, and its not going to bring encouragement to those businesses that have to close early and lose sales and profits.

Article:

With requests for people to stay home, alcohol-serving establishments to close temporarily and other commercial facilities to cut operating hours, the measure was repeatedly extended beyond the initial end date of May 11, dealing a blow to the world's third-largest economy.

Except for the southern island prefecture of Okinawa, the virus emergency was lifted last week, but among the 10 prefectures, seven including Tokyo have shifted to a quasi-state of emergency, allowing targeted anti-virus measures for specific areas rather than entire prefectures.

Ideas:

The continued pandemic situation in some ways might be causing problems for companies and hiring, even though the job availability ratio appears quite high. 

For some companies, as with any economy, as an economy is very complex, the pandemic might not be affecting them that much. But of course with some companies the pandemic is having huge affects as a result of less customers, less sales, and less profits.

The longer the pandemic continues the more stress some companies are going to have if they can't get some support such as subsidies from the Japanese government.

Article: 

The latest outcome showed that the number of people in work fell 130,000 from the previous month to 66.45 million, down for the third consecutive month.

The number of unemployed increased 100,000 from April to 2.04 million. Among them, 810,000 people voluntarily left their jobs, up 70,000, while 630,000 were laid off, up 30,000, and 480,000 were new job seekers, down 10,000.

Ideas:

So it seems the pandemic is still causing many challenges in the Japanese economy has lost even more jobs.

The challenge with these numbers, people, is will they be able to go back to work in jobs that they had before the pandemic situation.

For example the those who voluntarily left their jobs, will they be able to return to the jobs they had before the pandemics. Those who were laid off will they be able to return to their previous jobs.

And then can these people find good meaningful well paying, if they had those kinds of jobs before the pandemic.

The pandemic or any major shift in an economy, if the pandemic has caused that, can bring major shifts or changes in the kind of jobs available once the situation ends.

Article:

The gender gap in the jobless rate narrowed, as that for men was flat at 3.2 percent while that for women was up 0.4 percentage point to 2.7 percent.

"The outcome seems to reflect the fact that more female workers continued to look for new jobs," a government official told reporters, saying such women included those laid off as companies struggled due to the pandemic and those who voluntarily quit their jobs.

Ideas:

Globally women seemed to have the biggest challenges related to the pandemic and jobs. Most likely because, unfortunately, many women work in service type jobs, which at the present time is the sector that is most affected by the pandemic.

If you add in child-care costs and if they have children in school, and the children have or have to study online at home, it adds extra stress on women who for the most part take care of children.

Have a nice day and be safe!

Bank of Japan:

 https://mainichi.jp/english/articles/20210618/p2g/00m/0bu/038000c

Article:

TOKYO (Kyodo) -- The Bank of Japan decided Friday to extend the deadline for its scheme to support corporate funding by six months until next March and maintained its ultraeasy monetary policy as the coronavirus pandemic drags on.

The BOJ, in a surprise move at a two-day policy meeting, decided to launch a new program this year to provide funds to financial institutions for their investments or loans aimed at addressing the issue of climate change. An outline of the new measure will be unveiled at the next policy meeting in July.

To keep borrowing costs low, the Japanese central bank will continue to set short-term interest rates at minus 0.1 percent while guiding 10-year Japanese government bonds at around zero percent.

Ideas:

In the wake of the current situation, with pandemic and the Japanese economy not doing so good, it was probably a good ideas that the Bank of Japan keep the short-term interest at minus 0.1 percent.

And at the same time help financial institutions as sometimes they are forgotten in the BOJ's easy money policy. Sometimes it is forgotten that they too have make a profit to stay in business.

The idea of climate change has finally been realized in Japan as we massive floods, massive white outs, or huge snow storms, the Shizuoka landslide, and the extended heat wave.

Even insurers are now trying to figure out to address the climate change situation.

Article:

It made no change to the pledge to buy exchange-traded funds when needed, with the annual upper limit set at 12 trillion yen ($109 billion).

"Japan's economy has picked up as a trend, although it has remained in a severe situation due to the impact of COVID-19 at home and abroad," the BOJ said in a statement, maintaining its previous assessment.

The BOJ appears to be in no hurry to dial back its crisis-mode monetary stimulus as the economy remains on shaky ground and its 2 percent inflation target is still far off, in stark contrast with the United States and some European countries where concerns about inflation have grown.

Ideas:

Some parts or sectors in the Japanese economy may be picking up but many parts or sectors are still not doing so good.

And economy is very complex, all sectors never grow or change in a linear fashion, as all up or all down. There are always going to be some going up and some not doing so good.

But that is what a market economy is all about. There are always going to be up and downs.

With the pandemic some of the downs are extreme of course and some ups might seem extreme because of some industries are being created or new businesses in an industry are being created to fit the needs and demands of society.

The Bank of Japan, and its goal of  2 percent inflation just doesn't seem to make sense right now as consumer demand is not where it should be at this time.

As the same time, the US, with more of a free spending consumer society, inflation might be a problem in the future. But Japan, while consumer spending is estimated to be around 50 percent of GDP just doesn't have the same spending mindset that US consumers do.

Because of that Japan may never reach the Bank of Japan's goal of 2 percent inflation.

Article:

The U.S. Federal Reserve signaled Wednesday that it may start raising interest rates earlier than expected in 2023.

Japan's core consumer price index, excluding volatile fresh food items, rose 0.1 percent in May, marking the first increase in 14 months, government data showed earlier Friday, providing relief to the BOJ.

The pandemic has moved the 2 percent target further away, prompting a fine-tuning of the BOJ's toolkit in March in preparation for longer-than-expected easing. The target is unlikely to be attained even when Kuroda's current term ends in April 2023, according to BOJ projections.

Ideas:

The ideas that the US federal reserve in thinking of raising the interest rate in 2023 might seem like a good time to do it. If they tried to do in the summer of 2021, now, it might be too soon, as the virus situation has started to spiral out of control again.

But even more importantly, the US economy, like all economies is very complex as there are some areas doing much better than other sectors industries.

And there are still millions of people/families that have not been able find jobs that they lost. 

Japan's core consumer price index increase of 0.1 percent is nothing to get excited about, even though its the first increase in 14 months.

No matter what the BOJ tries, as the present time, the 2 percent goal might not be attainable, as Japanese consumer demand is just not there.

Also the services industry is just too far down and until both consumer demand and the services industry improve, the 2 percent goal might be out of reach for now and in the near future.

Article:

The year-on-year change in the core CPI is expected to stay around zero "in the short run" but will gradually rise thereafter, the BOJ said, while acknowledging "high uncertainties" over the consequences and the impact of the pandemic.

Governor Haruhiko Kuroda is scheduled to hold a press conference later in the day to explain the central bank's decision.

Climate change has become one of the key topics for central bankers as momentum is building toward decarbonization to help reduce global warming.

Ideas:

Whether short run or long run the core CPI probably won't change much anytime soon. There just isn't enough consumer demand at the present time or in the near long term to change it.

There are still too many uncertainties for sure as the pandemic continues to drag on.

Those businesses, whomever they are, which have been hanging on, hoping for an end in the pandemic, eventually might have to shut or reduce operations even more. Even with the Japanese government subsidies they are receiving it might not sustain them.

Everyone now seems to be thinking about climate change and what to do about it. For example, the EU has come out with even stricter emissions standards and many carmakers around the world are not happy about it. Essentially the EU wants to get rid or gasoline type cars by 2035, if that is the correct date, and carmakers are not happy.

Article:

Japan, under Prime Minister Yoshihide Suga, has been sharpening its focus on green growth with its pledge to bring carbon dioxide emissions to net zero by 2050.

"Climate change issues could exert an extremely large impact on developments in economic activity and prices as well as financial conditions from a medium- to long-term perspective," the BOJ said.

Kuroda said earlier that central banks should be flexible in designing policies toward a greener society and the BOJ would explore actions and take necessary steps on climate.

Ideas:

The idea of a greener society now is the major trend everywhere. But it takes new technologies and it takes money to transform a society and an economy, and it takes time.

And at the same time there is going to a lot of resistance to change. Maybe not so much from society itself, as the change might feel gradual to them or even not very noticeable, but any business that is rooted in the carbon style industries such as the coal sectors, the oil sectors, the auto sectors or any other sectors or business is going to resist as long as they can.

Cost in the short term might be too much and as such governments and societies will need to change and try to figure out the best way to transform to a greener society without disrupting the present economy or society too much.

Have a nice day and be safe!

Japan Core Consumer Prices:

https://mainichi.jp/english/articles/20210618/p2g/00m/0bu/026000c

Article:

TOKYO (Kyodo) -- Japan's core consumer prices rose 0.1 percent in May from a year earlier, increasing for the first time in 14 months on climbing energy prices, government data showed Friday.

Nationwide core consumer prices, excluding volatile fresh food items, were boosted by sharper rises in gasoline and kerosene prices on the back of higher crude oil prices, according to the Ministry of Internal Affairs and Communications. The core consumer price index was down 0.1 percent in April.

Among petroleum products, which gained 15.6 percent, gasoline surged 19.8 percent and kerosene jumped 19.0 percent, the data showed.

Ideas:

A 0.1 percent increase in core prices is really not that much, but its always a trend that needs to be watched.

And the idea that any time producers or wholesalers see an increase in their prices, mostly likely they are going to "pass on" the additional costs to the next group, in the logistics chain.

Petroleum prices are very volatile, meaning the increase and decrease easily, so sometimes companies might have a difficult time estimating what their costs will be in the future.

And as the summer gets hotter and hotter, families are not going to be happy staying at home despite the suggestions by the Japanese government to not go out too much. They are going to find relief in big shopping malls and other areas to avoid running their AC's all day and all night.

Article:

Utility bills were down 0.3 percent as there is typically a delay in reflecting crude oil price moves, a ministry official said.

Still, electricity bills' decline of 2.9 percent and city gas prices' fall of 3.7 percent were smaller than their year-earlier drops.

"With a rebound from last year and recent rises in crude oil prices, the impact from the gasoline prices and electricity bills were enough to turn the core CPI positive," a ministry official said.

Ideas:

Yes there is always a delay related to changes in prices either up or down, and when consumers, such as families would begin to see changes in their utility costs.

There is still the idea that maybe many or some companies have their employees working from home, either part of the week or all of the week, so company utility costs might be lower too. 

But then that might increase the costs of home utilities costs. In an economy there are always positives and negatives related to different economic activities such as working from home, higher utility costs or working at the office, lower utility costs at home.

But even if the CPI increase, lets say 0.1 percent, an economy is very complex, and that doesn't mean there was a 0.1 percent increase in prices in all parts of the economy. 

And the idea that it only increase 0.1 percent could mean that there is not as much economic activity in the economy as needed to increase prices to a level where the economy is functioning at a good level.

Article:

Another contributor to the core CPI's rise were housing prices, up 0.6 percent on year, as insurance fees against fire and earthquakes climbed 16.4 percent as many insurance firms raised them this year reflecting increased natural disasters.

Prices of household items such as air conditioners were up as people spent more time at home amid the coronavirus pandemic, with durable goods gaining 2.3 percent.

Ideas:

if insurance fee are included in housing prices, instead of being a separate item, then its understandable why housing price might be increasing.

Japan, every year seems to be experiencing more and more natural disasters or situations. The severe flooding in the southern part of the country, the flooding in the Atami, Shizuoka, the heavy snow damage in the Nagano area last winter and so on, just to name a a few, not to mention the 2019 typhoons that hit the Chiba area.

I talked to an insurance person in Japan recently and they are also trying to figure out what to do about global warming as this is now part of the insurance industries strategies to try and figure out how to handle the global warming situation.

Yes, air conditioners no doubt are probably big sellers right now. And maybe even big screen TV's and the Olympics are now on. I wonder how many families have visited Yodobashi Camera, a large electronics store to see all of the big screen TV's on sale, or just bought one online.

Article:

Meanwhile, mobile phone fees slumped 27.9 percent, continuing their downward trend after major carriers cut data usage fees in response to government pressure.

So-called core-core consumer prices, excluding fresh food and energy items, fell 0.2 percent in May from a year earlier for the second straight month of decline.

Ideas:

Mobile phone fees, most likely, are too high, unless the government puts some kind of limit or price controls or a price ceiling on the fees as a way to either help consumers and or keep the market as competitive as possible, forcing major carriers to find ways to compete beside just having high prices.

And there is Rakuten and its entry in the mobile phone fee market which claims to offer lower prices. 

But for every economic situation there might be some positives and negatives, so it will be interesting to see if the major carriers find ways to keep their profit margins the same, for example now charging higher prices to buy the phone besides the monthly fees for the service.

Core consumer prices are always a major concern for the Bank of Japan as it is still concerned with getting inflation to the 2.0 percent level. But that might not happen anytime soon as long as consumers are being told to stay at home and not go out. 

Consumers can buy only so much online before they want and need to be out and about and yes even using money in the economy.

Have a nice day and be safe!

Japan May Exports:

 https://mainichi.jp/english/articles/20210616/p2g/00m/0bu/022000c

Article

TOKYO (Kyodo) -- Japan's exports in May jumped 49.6 percent from a year ago to post the sharpest rise in over four decades, with their rebound from a coronavirus pandemic-induced downturn driven by solid demand for cars and auto parts, government data showed Wednesday.

Exports of goods surged to 6.26 trillion yen ($57 billion) in the reporting month, increasing at the fastest pace since a record 51.4 percent leap was logged in April 1980, according to the preliminary data released by the Finance Ministry, which began compiling the statistics in January 1979.

Ideas:

This is of course is very good. But we need to remember, it is year to year measurement. 

Because of the not so good spring 2020, it makes the May percent seem really big. The key word is "increasing at the fastest pace." This does not mean overall amount but value which is much different.

While its very good that exports rebounded by a large amount, it also reminds us just how bad the spring 2020 was, not just in Japan but globally.

Article:

After expanding 16.1 percent in March and 38.0 percent in April, exports grew for the third consecutive month, partly in reaction to a 28.3 percent year-on-year fall seen in May last year due to the initial shock of the pandemic that pushed down global demand and disrupted supply chains.

Exports of both cars and auto parts more than doubled, up 135.5 percent and 139.1 percent from a year earlier, respectively. Demand for the auto-related Japanese products was strong especially from the United States, a ministry official told reporters.

Ideas:

There could be several reasons why exports increase a lot over three months from last year.

The first of course being the huge decrease in demand globally because of the pandemic.

Another reason might be related to a collapse of the logistics and supplies chains which might have disrupted production at manufacturing plants.

The companies might not have been able to produce the products as needed and or they didn't have the needed intermediary parts needed to product the final products.

And the other reason might have been the spread of the virus in many different businesses especially manufacturing facilities.

For example, in the meat packing plants in the US during that time and after, many of the workers in the plants contacted the virus and the plants had to shut down for an unspecified amount of time.

As such the logistics and supply chains related to those companies were also affected, and even more the supermarkets and other places that sold the meat products suffered supply shortage problems.

So most likely the same things could have happened with the auto industry in Japan.

Article:

Imports also saw a remarkable rise of 27.9 percent to 6.45 trillion yen, up for the fourth straight month following a 12.8 percent boost in April, due to a recovery of domestic consumption and rebound in crude oil prices.

The country's goods trade balance with the rest of the world came to a deficit of 187.15 billion yen, the first red ink in four months.

Ideas:

And again part of the reason for the increase in imports might have been the continued improvement in logistics and supplies chains as they have mostly now gotten back to normal from the disaster of the spring 2020 period.

And of course maybe consumer demand has increased somewhat but probably not back to the pre-pandemic level as many consumers might still be concerned about the future and jobs.

A rebound in crude oil prices usually just means the value of the commodity has gone up, which would increase the overall value of the total imports, not necessarily the volume of the imports. 

Have a nice day and be safe!