Japan's July Unemployment Rate:

 https://mainichi.jp/english/articles/20210831/p2g/00m/0bu/033000c

Article:

TOKYO (Kyodo) -- Japan's unemployment rate fell to 2.8 percent in July, down for the second straight month, despite a resurgence of coronavirus infections and a fourth state of emergency declared for Tokyo over the virus, government data showed Tuesday.

The seasonally adjusted jobless rate fell from 2.9 percent in June, which had also seen a 0.1 percentage point drop from the previous month, according to the Ministry of Internal Affairs and Communications said. But the level is still higher than the 2.4 percent registered in February last year when the Japanese economy had yet to see significant fallout from the pandemic.

Ideas:

Most likely either business sentiment is improving, meaning they might be re-hiring and or demand has picked up and some industries and or businesses are feeling much better even though there is still the pandemic.

Japan's unemployment rate might not get back to the 2.4 percent level for a while, as there are still quite a few industries and businesses that are not doing so good.

Such as the tourism sector which of course include hotels. Even though domestic tourism has picked up some, most likely much of the tourism industry is still not doing very well, which could mean less jobs than before the pandemic.

Article:

Separate data from the Ministry of Health, Labor and Welfare showed that the job availability ratio in July increased to 1.15 from 1.13 a month earlier, rising for the second month in a row, meaning that there were 115 job openings for every 100 job seekers. It had gained 0.04 point in June.

A surge in new infections driven by the highly contagious Delta virus variant forced the government to issue the latest coronavirus state of emergency for Tokyo in mid-July, only three weeks after the third emergency was lifted for the capital.

Ideas:
An increase from 113 to 115 really is not a big improvement in the job market. But compared to many countries Japan is still doing very good for the number of jobs available for those looking for a job.

Even though there are 115 jobs for every 100 job seekers, what kinds of jobs are available?

Are they the kinds of jobs that pay good salaries and benefits, or are they contract type jobs and that are limited with less than good benefits?

Many times there is a lot of news about jobs and in the news about how the unemployment rate has decreased. But the news should always be taken with a grain of salt, meaning not all of the new jobs available are the kinds of jobs that job seekers are really looking for.

Article:

It joined Okinawa as the two regions of Japan under an emergency declaration during July. The southern island prefecture's virus emergency was declared in late May.

Under the declaration, people are asked to stay home and restaurants and bars to refrain from serving alcohol and close by 8 p.m. However, some eateries have defied the latest request, serving alcohol and returning to regular business hours.

"I don't think we can say that the number of infections and the jobless rate showed a clear correlation this time," a government official told reporters. "Having said that, the virus impact remains, and we have to monitor it closely."

Ideas:

By this time, maybe 18 months into the pandemic, most likely many businesses such as restaurants in the Tokyo area can't wait any longer and if they do they might not survive. 

So if there are no penalties and the emergency measures are only suggestions its only logical or natural that more and more businesses are going to stay open in order to survive.

Yes the virus situation remains and yes its becoming more apparent, that there might not be a correlation or even an association with people out and about and the number of infections.

While more and more people are becoming vaccinated the virus rate remains high, but not as high as before.

For example at one time Japan was at 23,000 cases but is now down to 13,000 cases. So can we actually say the vaccination rate has lowered the number of infection? Again its hard to really say.

Article:

The July survey shows that the number of unemployed stood at 1.90 million, dropping 120,000 from June and down for the second consecutive month. Among the total, 700,000 people voluntarily left their jobs, down 90,000, while 570,000 were laid off, up 10,000, and 480,000 were new job seekers, down 20,000.

The number of people in work rose 420,000 from the previous month to 67.08 million, increasing for the second successive month.

"The third emergency was lifted for Tokyo and several areas in June, and I believe its effect appeared in July and led to the second monthly improvements both in jobless rate and job availability, which are lagging indicators of the state of the economy," said Yuriko Shimanaka, an economist at Mizuho Research & Technologies.

Ideas:

So 1.9 million were unemployed in Japan. But the numbers need to be looked at carefully. For example 700,000 voluntarily left their jobs? So what does that mean? Did they take some kind of voluntary leave, meaning did they receive some kind of severance or bonus to leave their jobs, because of the pandemic situation?

And then there were 570,000 who were laid off. And of course mostly likely because of the pandemic, and it would be interesting to see what industries or sectors did most of the people come from? Was it mostly services where most of the pandemic problems have been such as tourism, hotels, airlines, retail and so on.

And there were/are 480,000 job seekers. But are these jobs seekers part of the 700,000 or the 570,000?

But on the bright side, if you can have a bright side in the pandemic, supposedly there were 420,000 new workers.

And they question again is what kinds of jobs did they get? But for now and really any time these day "something is better than nothing" when there are so many without a job. As some kind of job is better than no job for now.

A lagging indicator just indicates what has already happened or is happening. The word lag sometimes means it takes time to see the affects of some economic actions. For example the Japanese economy might be showing some signs of improvement but it might take some time before businesses actually do something related to the improved economic conditions.

Article:

The government has repeatedly extended and expanded the ongoing fourth emergency, now covering 21 out of Japan's 47 prefectures, and is set to last until Sept. 12, clouding the outlook for the employment environment.

Given the situation over the fourth emergency and the spread of the Delta variant, Shimanaka says the improvement in job markets will be a "temporary" move.

"The impact of the virus emergency might have become smaller on the economy and the labor market, but undoubtedly it remains a negative factor, so the indices could begin to worsen again in August," Shimanaka said.

Ideas:

Even though 21 of the 47 prefectures are under the emergency measures, most likely even those that aren't might still be feeling the affects of the pandemic situation, such as less than good consumer demand as consumers most likely are still not out and about as much as before the pandemic situation.

While the economy might be picking up some, there are many areas or sectors, such as the services industry in the large metropolitan areas that are not doing so good and might not for much if not all of 2021.

The labor market, in particular the labor market related to the services sector and in particular the hotels, airlines, and tourism related businesses might not see a lot of improvement until the spring of 2022 if even then.

Have a nice day and be safe!

Japan's Aug. Economic Review:

 https://mainichi.jp/english/articles/20210826/p2g/00m/0bu/034000c

Article:

TOKYO (Kyodo) -- The Japanese government on Thursday retained its view on the domestic economy in its monthly assessment for August, saying increased weakness has been seen in some sectors, while warning of downside risks from a recent resurgence of coronavirus infections.

The economy shows "further" weakness in some components and remains in a severe situation due to the pandemic, the Cabinet Office said, as the government's fourth state of emergency over the virus has been expanded to 13 out of Japan's 47 prefectures, with eight more to be added from Friday.

The measure only covered Tokyo and Okinawa a month ago.

Ideas:

No doubt the Japanese economy remains in a very fragile situation, with many sectors far from being at the pre-pandemic level.

Even though only 21 prefectures are in emergency situations doesn't mean the other prefectures are not experiencing not so good economic growth.

And yes, even prefectures are very much different in terms of economic growth like different sectors or industries don't all grow the same, and as such all prefectures in Japan have and will continue to have different levels of economic growth.

While some prefectures and areas have some growth some might not, some of it related to the pandemic some of it related to just normal market activity in an economy.

Article:

The wording was used for the fourth month in a row after a downward revision in May, when the previous virus emergency for Tokyo and some other areas was in effect.

Looking forward, the report said the economy is expected to continue picking up, but warned full attention should be given to a "further increase in downside risks" due to the spread of the virus.

"Given factors such as how fast virus cases increase since the beginning of this month along with expansions of the virus emergency, we thought we should change the description" for the economic outlook, a government official told reporters.

Ideas:

Government economic reports like many central bank reports or assessments sometimes are very cautious about what they might say, as the don't want to cause harm in the financial or the stock markets and even globally.

Yes the economy may well be picking up in some areas such as exports, manufacturing, or business investments, but there are still many areas of the economy that is not doing so good.

The pandemic situation will most likely continue to play heavily on many areas or sectors such at the tourism industry, the services industry including restaurants and hotels. And even some retail places still might not be doing so good as some consumers might still be concerned about going out too much.

Article:

The number of new daily COVID-19 cases nationwide has kept expanding since around late July, with the figure breaking the previous record of nearly 8,000 marked in early January and topping the 25,000 mark for the third straight day on Saturday amid the spread of the highly contagious Delta variant.

Under the state of emergency, restaurants and bars are asked not to serve alcohol and close by 8 p.m., while major commercial facilities such as department stores are requested to limit the number of customers allowed in at the same time.

The end date of the latest emergency is currently set on Sept. 12.

Ideas:

Even though more and more people are getting vaccinated in Japan it seems to cases keep rising which is not good for many parts of the Japanese economy.

Some reports have stated that up to 40 percent of restaurants and other places in the Tokyo entertainment areas are not following the suggestions of the government as they say they can't survive if they close as maybe most of their business is done in the evening's.

For every action there is an equal and opposite reaction or there are always positives and negatives in many economic actions.

While the attempt to limit the number of customers into a department store at anyone time, most likely its not good for business for Japanese department stores. Or maybe there is no affect and possibly the total number of customers over a day, week or month might level out or be the same if customers are willing to wait to get into a department store.

Or quite possibly some might decide to buy online if the items they want or need are sold online.

But of course, in the case of supermarkets, quite possibly they might not have an online presence and or have for example delivery types services to customers close to the supermarket.

As of this writing, a bit delayed, the emergency measures have been extended to the end of October.

Article:

By component, the office retained its view that private consumption has shown "further" weakness, especially in services spending. In addition to the surging virus cases, the official said he believes heavy rain across the nation earlier in August also dampened consumer sentiment.

Upgrading the evaluation of corporate profits for the first time since February, the report said earnings are "picking up, although some weaknesses remain in nonmanufacturers" due to the impact of the virus. The July report had said they were "picking up as a whole."

Meanwhile, imports saw the first downgrading in 10 months, as the office said they are "pausing" in recovery recently, compared with the July report that said they showed "movements of picking up."

Ideas:

External factors such as the weather can also have an affect on consumer spending. But at the same time, quite possible during that time period of heavy rains, it would be interesting to see if online consumer spending increased as the rains might have caused some people to not go out.

While many manufactures are seeing growth some are won't in September because of the semi conductor chip shortage

While many businesses not related to the service industry most likely are seeing economic growth. But at the same time maybe many are not. 

An economy is very complex and a such there is always a lot of dynamics taking place at the same time.

Even before or without a pandemic in an market economy there area always positives and negatives meaning there are always businesses and sectors who are doing good and some businesses and sectors not doing so good.

The ideas of a "pausing" can mean many different things. For example sometimes energy, oil, and gas are major import items to or for the Japanese economy. As sometimes these energy commodities are fragile or are subject to global energy supplies and as such sometimes the energy prices are up and sometimes they are down, which can affect the value of the imports into Japan. 

So a pausing could mean oil prices were down and as such the value of imports was down too, but not necessarily the quantity of imports depending on what statistic or measurement is used.

Have a nice day and be safe!

Japan's Core Consumer Prices:

 https://mainichi.jp/english/articles/20210820/p2g/00m/0bu/029000c

Article:

TOKYO (Kyodo) -- Japan's core consumer prices dipped 0.2 percent from a year ago in July, as lower mobile data fees remained a big drag despite support from rising energy prices, government data showed Friday.

Nationwide core consumer prices, excluding volatile fresh food items, marked the 12th straight month of decline, according to the Ministry of Internal Affairs and Communications, posing a challenge for the Bank of Japan in its quest to hit its 2 percent inflation target.

The ministry changed the base year to 2020 from 2015 and the calculation method for the consumer price index. Under the new base year, the pace of decline in the core CPI slowed from 0.5 percent in June.

Ideas:

The Bank of Japan has been trying for a very long time to get inflation to 2 percent but hasn't been able to reach its target goal.

I don't see this as a failure of the Bank of Japan, I see it more as a structural challenge and or the Japanese economy is just not setup or structured like the US or even the EU economies.

For inflation to fully be able to change up or down, the economy needs to be in some kind of equilibrium, meaning, in this case, there is not full participation of all groups in the economy for consumer spending to reach its potential.

For example, women workers in Japan, most likely, are not working at their full potential, as some or many are working at low skilled jobs, underemployed jobs, or part-time jobs, and as such their salaries are not where they should be for their skill level. 

So as a result, a large part or group of the Japanese economy is unwilling or unable to spend up to their potential, thus might reduce consumer spending in the Japanese economy.

But at the same time, even if inflation was able to reach the 2 percent level, then the Bank of Japan has to begin to think about those on lower salaries and or those on fixed incomes if inflation begins to get too high for them.

So inflation can be both a positive and a negative in an economy. Inflation at the 2 percent level might show or indicate a good level of demand or economic activity in the economy.

And below that, say 1 percent might indicate the demand in the economy is not where it should be or not what it could be .

Article:

The data reinforces the view that Japan is unlikely to see inflation accelerating and the BOJ will need to maintain its ultraloose monetary policy for an extended period.

That contrasts with the United States which has been hit by inflation worries. The U.S. Federal Reserve is thought to be preparing to start stimulus tapering as early as later this year.

Mobile data usage fees, which are given more weight in calculating the CPI than before the latest revision, tumbled 39.6 percent in July from a year ago as major Japanese carriers now offer cheaper plans after facing mounting pressure from the government.

But higher energy prices and accommodation fees had a positive effect.

Ideas:

The ultraloose monetary policy can be both a positive and a negative. For banks and other it could be a negative if the Bank of Japan or the Japanese government doesn't provide subsidies or help if potentially banks are losing profits are lower interest rates.

At the same time, it can also be a negative, if the ultraloose policy encourages too many companies or families to continue to borrow extra money when means now potentially they are acquiring even more debt.

Extra or more debt can "crowd out" extra spending in the economy if businesses or families are worried about too much debt and or don't have enough extra money for using it in the economy.

If mobile fees were too high then then its a good thing that they are being lowered for consumers in the economy.

However, the companies will find ways to make up for the reduced data usage fees and charge consumers higher prices in other areas, either services and or other products.

Energy prices are very volatile as they are subject to global supply and demand. But an increase in energy prices should never be thought of as a solution to higher inflation.

There are always positives and negatives in anything that happens in an economy. Higher prices might be good for suppliers as maybe they now can get higher profits, but not so good for consumers of the energy as now they have to pay more. And if this means gas, oil, energy for some homes or cars etc., and if they are on lower incomes or fixed incomes it can be a real economic problem for them.

And maybe for some businesses, especially during the pandemic, if there profits margins are already too tight. An increase energy prices might be too much for some.

If accommodation fees means higher hotel fees, then most likely there might be more domestic travel now and hotels are upping their fees and demand increases. But they need to be very careful as consumers are still weary about the pandemic and maybe for some, if a  hotel has too high a price they will find another hotel and or not travel at all.

But if these hotels of course cater to the rich or upper class then they won't care too much about the hotel rates.

Article:

Rising crude oil prices led the kerosene price to jump 25.2 percent and gasoline to rise 19.6 percent, ministry data showed.

Accommodation fees gained 17.3 percent as hotel operators imposed higher prices with the number of customers increasing from a year ago due partly to a four-day holiday that coincided with the opening of the Tokyo Olympics.

The government's subsidy campaign to spur local tourism was launched in July last year, triggering sharp falls in accommodation fees. It has been suspended nationwide since last December amid a resurgence of COVID-19 infection cases.

Ideas:

Again energy sometimes are influenced a lot by supply and demand in the global market. And if they become too high in a country some groups or even businesses might be stretched because of the higher energy prices.

For example if gasoline prices, for consumer using cars, become too high they might then begin to think, if they can or could to consider using more public transport instead of driving their cars everyday.

The use of cars increased a lot in Japan increased a lot since the pandemic began as workers and others didn't want to be on crowded trains or subway systems.

But that can easily change if suppliers don't keep gas prices to an optimal or equilibrium level.

Yes its supply and demand but in some ways it might not be right that whenever there is a holiday period, some special event etc. hotels or other feel they need to increase prices if there is an increase in demand. 

There are already going to get more sales and customers so why the need to "price gouge" for lack of a better phrase or take advantage of consumers or customers.

The campaign last summer was probably a good attempt to encourage travel but it came at the wrong time and the pandemic was far from over as it is now.

But now at leas more people are vaccinated and its estimated up to 49% of the Japanese population have been vaccinated.

Article:

"The impact of mobile phone fees is large," said Junichi Makino, chief economist at SMBC Nikko Securities Inc. "Excluding special factors such as the lowering of mobile fees and the 'Go To Travel' campaign, however, the core CPI is up 0.5 percent."

"Although severe macroeconomic conditions continue, the CPI data does not change our view on the underlying price trend...and Japan is not headed toward deflation," Makino said.

Japan is still struggling to rein in coronavirus infections due to the spread of the highly contagious Delta variant. The Japanese economy eked out growth in the April-June quarter driven by strong exports and capital spending, though private consumption remained weak.

Ideas:

The decrease in mobile fees, despite helping everyday families and consumers, the lower fees might mean more extra income which means potentially consumers might use the savings from the lower mobile fees now in the economy which in turn increases overall demand in the economy.

If they core CPI did increase by as much as 0.5 percent, then that's a good thing. But the real challenge is if it can be continued into the future.

Japan might not be headed to deflation or lower prices but that doesn't mean consumer demand is where it should be. Consumer demand in the Japanese economy is way below where it should be and most likely won't be anywhere near its potential until the pandemic is over.

As mentioned in other articles, while exports increases are good and very much needed, they are unable to carry the Japanese economy as its estimated that exports might only account for 20 percent of Japan's GDP while consumer spending is estimated to be 50 percent of GDP.

Any increase in capital spending is good as it shows or could show businesses might be feeling good about the future or at least for their business or industry.

Article:

Concerns have grown that surging raw material costs could squeeze profits at Japanese companies as economists say many are reluctant to pass on those higher costs to consumers.

"We will have to closely watch how energy prices move," a ministry official said.

So-called core-core consumer prices, excluding fresh food and energy items, dropped 0.6 percent for the fourth straight month of decline. 

Ideas:

Yes, companies that see their suppliers increase their prices might be concerned about "passing on" the increased supply costs to the next in line because of consumer demand is not where it should be, whether that is supplies to other companies or whether that is to the final retail customer in the supply chain.

As such profit margins might be less than wanted or needed for a company to grow or even stay in business.

Eventually overtime companies may have no choice but pass on some or all of the costs to the next group in the supply chain.

Core-core consumer prices might have dropped 0.6 percent but the real question, for those that matter, did they see a decrease in prices.

Again an economic activity can be both a positive and a negative. 

For consumers of course they might see it as a positive but for the suppliers they might see it as a negative as most likely their sales and profits didn't increase.

Have a nice day and be safe!

Japan Exports:

 https://mainichi.jp/english/articles/20210818/p2g/00m/0bu/020000c

Article:

TOKYO (Kyodo) -- Japan's exports grew 37.0 percent from a year earlier in July, keeping up their sharp rebound from the initial blow of the coronavirus pandemic amid a solid global economic recovery, government data showed Wednesday.

Rising for the fifth month in a row, exports totaled 7.36 trillion yen ($67 billion), lifted by robust shipments of cars and auto parts to the United States as well as semiconductors and chipmaking equipment to Asian nations including China, the Finance Ministry said in a preliminary report.

Ideas:

Export growth is always good and most likely will continue but not at the same pace, as maybe some of the exports are demand that was delayed due to the pandemic.

The global economic recovery will most likely continue except for a situation that seems to be growing related the semi conductor chip market.

But at the same time, even though many countries are increasing their vaccination rates, the virus variants seem to be growing which potentially could cause challenges for supply chains and shipping.

Article:

The year-on-year increase topped 30 percent for the fourth straight month, following a 48.6 percent expansion in June, partly in reaction to a 19.2 percent drop in July last year when the pandemic dampened global demand for Japan-made products such as cars.

July's exports topped the pre-pandemic level two years ago, up 10.7 percent from 6.64 trillion yen in July 2019.

Imports soared 28.5 percent to 6.92 trillion yen, up for the sixth consecutive month, on rising prices for crude oil imports from the United Arab Emirates and other countries along with brisk purchase of iron ore mainly from Australia.

Ideas:

Yes, because the drop in the spring and summer of 2020 was large, it makes it look like the increase in 2021 as something significant. But in reality most likely its just a normal delayed demand from a year earlier.

So there was the delayed demand and the normal demand for July 2021 and that would obviously top the pre-pandemic level. Again just normal activity plus delayed activity.

The idea that imports increased needs to be taken with a grain of salt, meaning it might not be what it seems. For example are the imports based in import prices or are they based on import volume. 

As it looks, the increase in imports is based on changes in import prices and oil prices are very volatile meaning the go up and down easily on the global oil markets and or depending on supply and demand in the oil market.

So if the OPEC oil suppliers had reduced their supplies it might cause prices in the global market to increase as as such Japanese importers have no choice but to pay higher prices for the oil they need.

And then the iron ore prices could be in a similar situation and or dependent on supply costs and or shipping costs due to the pandemic.

But for the iron ore it could nothing more than an increase in demand from Japanese companies that need to ore to make different products and as such more ore was imported in July than the previous months.

Article:

The goods trade surplus stood at 441.02 billion yen, ensuring black ink for the second successive month and turning positive from the previous year's 14.76 billion yen deficit.

All figures were compiled on a customs-cleared basis.

The strong recovery in exports has helped the Japanese economy emerge from its record annualized contraction of a real 28.2 percent in the April-June period last year from the previous quarter triggered by the pandemic.

In the April-June period this year, the economy grew an annualized real 1.3 percent from the previous quarter for the first growth in two quarters, the Cabinet Office said Monday.

Ideas:

Its always good when the there is a merchandise good trade surplus as that means more money going into the Japanese current account that is going out due to imports.

Of course it also means global demand for Japanese merchandise exports are strong, which is good for Japanese manufacturers.

It also needs to be remembered, what while exports are important for the Japanese economy, they are not the entire economy. Exports only make up about 20 percent of Japan's GPD, while consumer spending makes up about 50 percent of Japan's GPD.

So while 20 percent might not be that much it is a large amount, but at the same time, exports alone can't grow the economy or carry the economy while consumer spending is not where it should be.

The Japanese economy needs all parts functioning at their potential. That means exports, consumer spending, business spending/investment and so on.

Have a nice day and be safe!

Japan's Economic Recovery:

 https://mainichi.jp/english/articles/20210817/p2g/00m/0bu/015000c

Article:

TOKYO (Kyodo) -- Japan's economic recovery is likely to remain sluggish in the July-September period, as the resurgence in domestic coronavirus infections is expected to lead to parts of the country remaining under a state of emergency for the next few months, analysts say.

Some analysts say the economy is unlikely to return to its pre-pandemic size by the end of 2021 as projected by the government, following the release Monday of figures showing real gross domestic product increased at an annualized pace of just 1.3 percent in the April-June period.

Responding to a survey released Thursday by the Japan Center for Economic Research and conducted over an eight-day period through Aug. 6, 36 private-sector think tanks forecast average GDP growth of an annualized 2.55 percent in the July-September period, down sharply from the 4.90 percent increase projected a month earlier.

Ideas:

Most likely Japan's economic recovery is not going to change much or improve that much for the time being. There is still too much uncertainty around the pandemic situation in Japan.

Its highly unlikely that the Japanese economy can reach the pre-pandemic level anytime soon. When you have a large part of the services sector still under-performing, when you have the current semiconductor chip shortage continuing and getting worse, and when you have both the domestic and international tourism sectors almost non-existent, except for maybe travel to Okinawa, its doesn't look like the Japanese economy is anywhere near the pre-pandemic level.

Maybe even a 2.55 percent is a little too much right now. Of course many times the surveys can appear to be somewhat optimistic at best. Probably something just below 2.0 percent is a little more realistic considering the semiconductor chip situation.

Article:

The downgrade reflects the state of emergency issued in Tokyo in mid-July, which was then expanded to four more prefectures earlier this month, asking eateries to stop serving alcohol and close early and for people to refrain from unnecessary outings.

Fully covering the period of the Tokyo Olympics, held with almost no spectators from July 23 through Aug. 8, the emergency, the fourth so far issued, is currently scheduled to end on Aug. 31.

But the number of daily new virus cases nationwide has kept increasing, topping 20,000 on Friday to log a record high for the third straight day.

Ideas:

Perhaps by now most if not all people are tired of the waiting and the long drawn out measures. Of course the measures are meant to help society and keep the numbers down. But sometimes people don't see that.

An economy is very complex and there are always positive and negatives in any situation or any action that is taken. While the emergency measures have been for the good of society overall, they are not so good for the restaurants and other places that have to close early and not serve alcohol.

Of course there have been reports of up to 40 percent of such places in the Tokyo entertainment areas not following the emergency rules (suggestions) as they say they can't survive as most likely most of their business is at night.

Trying to get people to refrain from unnecessary outings is like the classic example of a man's finger in a dike which is about to flood, meaning a man using his finger to stop the flood is impossible. 

Yes, some people or many people here or there might refrain from doing things, but people now have too much pandemic fatigue, and maybe some are finding ways to cope or manage living within the pandemic situation.

Of course as more and more people become vaccinated, maybe some people have begun to take too many chances and not remain vigilant as the cases are still too high.

Article:

"The emergency will be probably extended to around October," said Keiji Kanda, a senior economist at the Daiwa Institute of Research. "That means, most of the July-September period will be under the state of emergency, and economic growth in the quarter will be very slow."

Kanda said that it has been "getting harder" to flatten the curve of infections by repeated emergency declarations as people have become less willing to comply with them.

Such a situation could remain in place until the end of October, when about 80 percent of Japan's population is expected to be fully inoculated, he added.

Ideas:

Even if there were no emergency measures economic growth probably would not be back to the pre-pandemic level. An economy does not change course or bounce back immediately overnight. There are too many moving parts of an economy that take time to get up to full speed.

Some might parts, such as exports, might and have bounced back, but now even exports are most likely not going to reach a level that was seen in the spring because of the semiconductor chip shortage.

And as the pandemic drags on most likely more and more people are less willing to comply with the emergency measures.

And not just people, as businesses maybe are becoming less willing and they need to survive and stay in business.

It wouldn't be a surprise, that the  40 percent that was reported to be not complying in the Tokyo area, more and more businesses are not following the emergency measures as they have to survive, and the number of businesses rise well above the 40 percent that was reported earlier.

Even as more and more people get vaccinated and Japan does reach the 80 percent mark, will the number of virus cases decrease? That seems to be the challenge for the Japanese government to figure out, knowing full well people want to get back to some kind of normalcy in their lives.

Article:

During the second and third emergencies earlier this year, there was a sharp fall in people visiting retail stores and entertainment facilities from the period before the measures were introduced in the target prefectures and some other areas.

But under the current emergency, the flow was only slightly down in Tokyo and roughly flat nationwide in July, according to Daiwa's analysis.

Daiwa predicts the fourth emergency and a less strict quasi-state of emergency covering 13 prefectures will reduce Japan's GDP by 520 billion yen ($4.7 billion) from July 12 through Aug. 31, smaller than the losses incurred under the second and third emergencies, respectively.

Ideas:

Yes, the flow might be slightly down as people are tired of waiting and just want to be out and about. Maybe its time for the Japanese government and globally, to try and figure out how to "live with the continuous threat" of a virus situation with of course taking all the needed measures to protect society.

And yes the Japanese economy might not be where it should be but at the same time, its not dead too. An economy is very complex and its a living organism, meaning there are many parts to it. As such there are some parts that might be doing quite well, but because of the pandemic there are still many parts not doing so well.

So the flow of people to stores and such might be flat, but that doesn't mean negative. There most likely still a good flow of people/customers into stores and such but of course not what it should be.

Article:

"The adverse economic impact is expected to be smaller as the virus emergency has become less effective. Still, consumer spending will remain at quite a low level as long as the emergency continues," Kanda said, adding that the only realistic option for the government to contain the virus spread now is to promote its vaccine rollout.

Although Japan still lags behind other developed economies in inoculations, its rate of fully vaccinated people has been sharply increasing recently, reaching 36.70 percent as of Thursday, compared to the world's average 23.26 percent, according to the University of Oxford's Our World in Data project.

Citing expectation that progress in the vaccination campaign will boost private consumption, the Cabinet Office released an estimate in early July that Japan's GDP will return in 2021 to its "pre-pandemic level" -- defined as its size in October-December 2019 -- also supported by brisk exports and business investment.

Ideas:

Consumer spending has always been a major challenge for the Japanese economy, and has been part of the Bank of Japan's focus on increasing the inflation rate to 2.0 percent with not much success.

And while the pandemic situation continues, most likely consumer spending is not going to be where is should be or reach its potential. But consumer spending even before the pandemic was never at its full potential.

Part of the problem is structural meaning there are parts of society or economy that are not operating at their full potential.

For example part of the Bank of Japan's strategy and the negative interest rate, related to businesses has been to "use your money or lose your money" over the long term by providing workers more pay raises as a way to get workers/consumers to feel good about the extra income or "disposable income" they have a use it spend it in the economy to increase inflation.

Another area where there are structural challenges are the working women in the Japanese economy Most likely are are not working at their skill level and most likely many or some are working in lower level jobs and or are underemployed.

If this group was able to work at their skill level, and were able to be paid at their skill level, it might actually improve consumer spending in the Japanese economy and most likely consumer spending in the Japanese economy might get near to its full potential, and maybe get closer to the 2.0 percent inflation level that the Bank of Japan has been trying to reach for about seven years.

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The annualized size of real GDP for the April-June 2021 was 538.67 trillion yen, while that for October-December 2019 was 547.00 trillion yen.

A government official said that the official view will be maintained even after the release of the April-June GDP data and analysts' relatively pessimistic projection for the following quarter.

"Consumption will be encouraged once vaccinations prevail and allow us to ease restrictions on economic activities, so the economic recovery to the pre-pandemic level by the end of this year is still achievable," the official said.

But Taro Saito, executive research fellow at the NLI Research Institute, said the recovery is highly likely to be delayed until next year since he projects GDP will grow by just some 1 percent in annualized terms in the current quarter, downgraded from his previous forecast of around 5 percent following the latest emergency.

Ideas:

Its too soon the project any kind of real recovery in GDP growth as unfortunately, despite the number of vaccinated is growing, the virus cases have not decreased enough for the Japanese government to feel safe or good about the situation.

Consumption or consumer spending, most likely will not be anywhere near where it should be for the time being. While there might be some who are tired of waiting and they will be out and about spending, there is most likely a large number who are still very concerned about their income and jobs and many sectors in the Japanese economy are still under stress because of the pandemic and as such are not going to spend much yet, and they are waiting to feel better about their situations.

A GPD growth of about 1 percent sounds about right because of the semi conductor chip shortage has now began to affect Japanese car makers and any company or industry in Japan that uses chips in any electronic situation.

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"As is the case with April-June, the trend of increases in capital expenditure and exports offsetting a virus emergency-induced consumption decline will remain unchanged," Saito said.

Meanwhile, he pointed out that GDP components other than consumer spending have turned less susceptible to the virus measures. Among them, capital spending will continue to grow "throughout fiscal 2021 and 2022" which ends in March 2023, he predicts.

"On the back of manufacturers' strong performances, more firms will invest on industrial machinery as well as on digitalization". 

Ideas:

While its good that exports and capital spending has increased, it must be pointed out that exports and business spending alone can't carry the Japanese economy and can't fully expand GPD growth.

Consumer spending in the Japanese economy is estimated to be around 50 percent of GDP. If consumer spending is down because of the pandemic and for other reasons GPD growth is not going to get much past the 1.0 percent level in 2021.

Yes it good that some measures are now less affected by the pandemic situation, it remains to be seen how much they can help the overall growth of the Japanese economy.

Consumer spending in the past, now, and in the future is the main component in the Japanese economy and GPD growth that is going to be the biggest challenge.

Have a nice day and be safe!