Japan Consumer Spending:

 https://mainichi.jp/english/articles/20210604/p2g/00m/0bu/032000c

Article:

TOKYO (Kyodo) -- Japan's household spending in April rose a record 13.0 percent from a year earlier, as consumption rebounded from a sharp decline triggered by the initial shock of the coronavirus pandemic last year, government data showed Friday.

The year-on-year increase was the largest since comparable data became available in January 2001, with households with two or more people spending an average 301,043 yen ($2,700) in real terms, the Ministry of Internal Affairs and Communications said.

Ideas:

While the 13.0 percent increase is very good, it has to remembered that April 2020 was not so good. So even though it was the largest year-on-year increase, perhaps consumer are making up for lost time from a year ago.

Consumers, if they can, seem to want to be out and about and spend, and if even if they are not out they spend on online.

What's interesting is why it was a 13.0 percent increase, when e-commerce had been growing in Japan.

Perhaps, as expected and or just the shock of the situation consumers and businesses were not prepared for something like the pandemic, meaning, even though they might had a the capacity to spend online or even a business have the capacity to have an online presence the shock of the pandemic had reduced the economic activity during that time to a very low amount.

Article:

The 13 percent rise was the second straight monthly growth following a 6.2 percent increase in the previous month.

In April 2020, household spending dropped 11.1 percent due to the government's first state of emergency over the virus, initially issued for Tokyo and six other prefectures and later expanded nationwide. Requests for staying home and closure of nonessential businesses under the emergency declaration cut into consumer spending.

Ideas:

Consumers in Japan and many businesses were in most likely in shock at the time as to what to do.

Of course many companies were advising their workers to work from home. Which meant many of the restaurants and convenience stores near their work places were losing valuable sales.

As there are sometimes positives and negatives in any situation, most likely the convenience stores near the workers homes saw an increase in sales along with any restaurants that were offering take out or delivery type services.

Most likely companies like Uber Eats saw a large increase in profits during that time and still now has the pandemic continues on.

Most likely Yahoo Japan Shopping, Rakuten, Japan Amazon, and many other companies that already had an online presence saw huge increases in the spring and summer of 2020 and probably still do now.

Article:

The previous record on a year-on-year basis was a 9.5 percent leap marked in September 2019 on the back of a last-minute splurge ahead of a consumption tax rate hike from 8 percent to 10 percent on Oct. 1 that year.

Meanwhile, seasonally adjusted spending in the reporting month inched up 0.1 percent from March for the third monthly rise in a row, amid a fourth wave of infections driven by highly contagious virus variants and the subsequent third virus emergency since late April.

Ideas:

In 2014 before the April 1 sales tax increase from 5 percent to 8 percent, March of 2014 also saw a large increase in consumer spending as consumers were trying to buy things they thought they needed before the 3 percent sales tax increase.

And then in April of 2014 consumer spending decreased a lot a consumers either had bought what they wanted or needed and weren't wiling to spend. 

But in the next few months of May and June, consumer spending began to get back to the pre-March 2014 levels, as consumers now either had no choice and had to spend on what they needed and or they began to get used to the idea that the 3 percent was not so bad and or again they had no choice. 

And the same thing happened, for the most part in 2019 as the sales tax increased from 8 percent to 10 percent starting on Oct. 1 of 2019.

As I was in Japan in September 2019 for a short trip to Yokohama and everything seemed crazy as there were sales campaigns going on and it seemed like a shopping frenzy taking place as consumers were just everywhere buying everything it seemed, before the Oct 1 sales tax increase.

It was a special time in the fall of 2019 before the pandemic hit the world. There was the Japan Rugby World Cup taking place and all kind of exciting and interesting things happening in Japan in the fall of 2019.

Article:

The average monthly income of salaried households with at least two people in April rose a real 2.8 percent from a year ago to 543,063 yen, following a 1.0 percent dip in March.

Household spending is a key indicator of private consumption, which accounts for more than half of Japan's gross domestic product.

Ideas:

Its interesting that the average monthly income increased from a year ago. Was it because of less or no bonuses in 2020 because of the pandemic. Was it just normal increases in income. 

Household  or consumer spending is estimated to be about 50 percent of Japan's GDP, meaning about 50 percent of all legal economic activity in Japan.

Even though exports get a lot of news and Japan has a sizeable export industry, the domestic market is still driven by consumer spending, as it is in most advanced economies around the world.

So when consumer spending drops even a little, it has the potential to have a large affect on the Japanese economy.

For lack of a better phrase, as I can't think of the correct economic phrase, at this time, that I like to use in this situation, many economic activities like consumer spending have a domino affect. 

Meaning its a complicated puzzle. As consumers spend more, businesses do better, as businesses do better, their workers might get higher salaries, which means they might spend some of that in the economy, and save some of it. And the suppliers to these businesses might do better, which means their workers might get higher salaries and they might spend more and so on in an economy, with all kinds of related economic activity. Another phrase might be a synergy affect.

Now if the opposite happens then we see all of the negatives too that could take place.

Have a nice day and be safe!