Japan Economy:

 https://mainichi.jp/english/articles/20210813/p2g/00m/0bu/026000c

Article:

TOKYO (Kyodo) -- Ninety percent of major Japanese companies expect the country's economy to expand in 2022 on hopes that the fallout from the coronavirus pandemic will subside, a Kyodo News survey showed Thursday.

The survey on 111 companies, including Toyota Motor Corp. and Sony Group Corp., also showed companies increasingly joining global efforts to curb greenhouse gases and striving to ensure economic security amid an intensifying U.S.-China rivalry, with a focus on supply chains for chips and energy resources.

The survey found 75 percent of the firms expect moderate economic growth next year, followed by 15 percent that said the world's third-largest economy will expand in 2022.

Ideas:

If the Japanese economy can grow, even a little this year and in 2022 would be good. The virus situation doesn't seem to be decreasing and maybe not even in the early and late fall.

Even with more and more people becoming vaccinated, new variants seem to be popping up everywhere.

The business community maybe has come to realize that greenhouse gases and global warming is real and its a real threat to society and business.

There was a very good article in the BBC talking about the shortage of semiconductors chips. Many industries and supply chains potentially will be affected in the coming months from the supply shortage.

Article:

Five percent said they expect economic conditions to remain unchanged, while no company projected a moderate decline or contraction.

With multiple answers allowed, 93 percent of the firms foreseeing economic expansion said they believe so due to the progress in coronavirus vaccinations, while 83 percent cited the recovery in private consumption and 72 percent pinned hopes on an easing of coronavirus restrictions on economic activities.

Despite the optimistic outlook by the companies, concerns remain over the pandemic going forward, with the government's inoculation campaign remaining slow and the highly contagious Delta variant driving up infection cases nationwide, analysts say.

Ideas:

Yes the progress of the vaccinations is good, but again, even with the increased vaccinations the virus situation doesn't seem to be weakening. If fact, it seems to increasing with the virus variants arriving almost every month.

A real recovery in private consumption or consumer spending might be a ways off, other than a little by little of its improvement each month during the fall. Consumers spending, which make up almost 50 percent of Japan's GPD, never seems to be a full strength.

Exports, has been on an upward slope for the past 6 months or slow, but its possible they could slow if the semiconductor shortage gets any worse.

There have been three recent times that Japanese consumer spending decreased a lot. In April of 2014 when the Japanese sales tax went from five to eight percent, Japanese consumer spending decreased in Q2 of that year. And of course in October 2019 when the sales tax was increased from eight to ten percent, again consumer spending decreased a lot. 

But both times consumer spending bounced back after consumers adapted to the idea of higher prices on products they needed or wanted to buy.

And maybe with the pandemic consumers eventually, will learn to adjust and live with the pandemic as it is and or will learn to be more safe and try to just go about their normal lives, as much as possible in the "new normal" of a pandemic world.

Article:

If the infection situation does not improve as hoped for, recovery of private consumption could be delayed, and supply chains could be disrupted, respondents in the survey said.

As for the current condition of Japan's economy, 56 percent of the companies said it is flat, and 40 percent said it is expanding moderately.

Twenty-six percent of the firms said they expect quarterly sales to return to pre-pandemic levels in 2022 and 16 percent expect any recovery to materialize in 2023 or later.

Ideas:

Most likely the pandemic, in Japan and globally, might not improve any time soon. But at the same time, its always possible that as more and more people become vaccinated, they will just try to, with caution, get back to their pre-pandemic lives as much as possible, which might include more consumer spending.

But at the same time, the pandemic has created major changes in how people live and work. It will be interesting to see how much people go back to what they were doing or how much, before they pandemic.

For example, how many people are going to venture back to eating and drinking out as much as they did before the pandemic. And what about shopping, how many people are going to venture back out to the stores and or buy online as some or many have done during the pandemic.

And how many companies are going to go back to only working in the office or will there continue to be some kind of combination of working from home and working in the office.

Yes, the economy might be flat, but an economy is very complex, and as such there might be some sectors or industries that are flat, some might actually be growing some or even more than some, and of course with the services sector some that are not growing at all.

Article:

But some companies fared well despite the global health crisis, with 16 percent saying sales have already recovered to pre-pandemic levels and 5 percent not seeing any declines in sales.

As the administration of Prime Minister Yoshihide Suga promotes efforts to combat climate change, with the target of achieving carbon neutrality by 2050, 94 percent of the companies said they are taking steps to reduce carbon dioxide emissions.

Companies polled said they believe it is important to promote energy-saving steps during business activities and set concrete targets on reducing greenhouse gas emissions.

Ideas:

Yes again, an economy is very complex and every company and every sector doesn't grow equally or in a linear fashion. 

The pandemic has created new opportunities for innovation and growth for some companies and sectors and unfortunately has hurt a lot companies in particular in the services sector.

In a market economy there are always going to be those companies that do better than other companies, its a given as there are always positives and negatives in a market economy.

But the pandemic has created new challenges for many sectors and companies. While as mentioned above, some might have had no decline in sales, while of course unfortunately some sectors might have had major losses in companies have to shutdown or close.

One can only see the images in the news on NHK or any other channel in Japan and see the implications of climate change with the heavy flooding in many places in Japan such as in Shizuoka and recently Fukuoka, and then in the winter the heavy white out or snow bombs that hit some major highway areas in wester Japan, and the Self Defense Forces had to be used to rescue the stranded cars and semis because of the heavy snow.

Energy saving steps are going to take some time and it might be expensive for some companies. But at the same time, innovations, new products, and services related to energy savings are being created quickly. But the real key is how fast can companies adapts and implement every saving features in their companies.

Article: 

Many companies also said they need to protect supply chains to ensure procurement of high-tech parts such as semiconductors as well as energy and mineral resources when the United States and China impose sanctions and export controls on each other.

The Japanese government has also been focusing on enhancing domestic development and production of cutting-edge semiconductors to reduce the country's dependence on foreign manufacturers amid a global chip crunch.

Kyodo News conducted the survey between early July and early August, targeting major companies in each sector.

Ideas:

Probably at this present time, there is no more vulnerable sector, globally, than the supply chains. Unfortunately the China/US trade situation has affected many countries and most likely will continue to do so.

Countries and companies are in a race now to secure as many rare earth minerals as they can, as they are needed for almost every high tech product in the world now, including semiconductor chips which are already suffering a global shortage

Of course the fire in the chip factory in the Tohoku area of Japan didn't help the Japanese chip making sectors or the suppliers of chips.

While the Japanese government is trying to develop the domestic semiconductor it might take a long time until Japan can fully manufacture enough domestic chips so that Japanese companies don't have to rely on chips or parts for chips from China and Taiwan. 

However, its seems these days, using the Apple I phone as an example, it might have parts from many different companies as almost everything and anything that is electronic probably has hundreds of small micro parts that might be from companies that might specialize in one small part that might go into a washing machine, a car, a smartphone, a TV and so on.

Have a nice day and be safe!