Japan Business Sentiment:

 Article Source: https://mainichi.jp/english/articles/20220308/p2g/00m/0bu/051000c

Article:

TOKYO (Kyodo) -- Business sentiment among workers with jobs sensitive to economic trends in Japan fell for the second straight month in February as economic activities remained curbed amid a coronavirus resurgence, government data showed Tuesday.

The diffusion index of confidence in current conditions compared with three months earlier among "economy watchers," such as taxi drivers and restaurant staff, inched down 0.2 point to 37.7 following a 19.6 point plunge in January, the steepest fall since March 2011, according to the Cabinet Office.

The office maintained its assessment of the economy from the previous month, saying it has shown "some weakness in its recovery." A reading below 50 indicates that more respondents feel conditions are worsening rather than improving.

Ideas:

Workers with jobs that are sensitive to economic trends are aways going to be on edge meaning they are always going to worry about today, next week, and next month.

As long at the Japanease economy is not where is should be workers are going to be on edge about what is happening and what is going to happen in the future.

The Japanease economy is the third largest in the world, with a lot of econmic activity, but at the time is is never at it fullest potential as their seems to be some blind spots or areas that are constantly weak in the economy.

Its important to remember an index is just a number, its not 100 percent realistic as to what some might think tomorrow, or next week, or next month.

Article:

In the reporting month, over 30 of Japan's 47 prefectures were under a quasi-state of emergency, which calls for people to refrain from nonessential travel between prefectures, in response to surging new daily COVID-19 cases amid the spread of the highly contagious Omicron variant.

A worker at a high-end restaurant in the greater Tokyo area said a request for shorter opening hours under the quasi-state of emergency had a severe impact on the business.

"There have been no parties held by companies, which have been a pillar of our revenue, while the number of individual customers remains low," the worker said.

Ideas:

Shorter working hours at restaurants, especially restaurants, might be the difference between just breaking and making a substantial profit.

Most restaurants probably get a lot of business in the eveneings and during the day so much, so the everning hours for late night customers or company employees might be important to them.

And then you add in the idea of no parties or business meetings held at restaurants or hotels and that can add up to a lot of lost economic activity each month.

Eventually maybe they will all begin to return but it might take a some time for hotels and restuarants to get back to the pre-pandemic level. 

Maybe not until the Golden Week period will hotels, restaurants, and other places begin to feel things are somewhat back to normal or at least a normal new normal.

Article:

An employee in the food-manufacturing sector said a recent surge in ingredient prices have added pressure on profitability as "we haven't been able to raise prices of our products yet."

Looking ahead, the diffusion index gauging business sentiment in the coming months rose 1.9 points from January to 44.4, up for the first time in five months, as many workers expected that progress in administering COVID-19 booster shots would help lift the restriction.

Still some voiced concerns over the outlook for raw material prices and energy costs, which are surging after the invasion of Ukraine by Russia, a major oil producer.

Ideas:

Companies in Japan have been reluctant to pass on their prices inceases to customers as they know the final end customer is very price sensitive.

But if many companies in Japan are having the same price increase challenges and they all pass on their cost increases to the next in the supply chain, then maybe customers will have no choice but to accept the fact that Japanease companies, like many companies globally, had no choice but to pass on their costs and then maybe customers will finally accept that a increase in prices is a normal business activity in Japan.

But there still in Japan, and globally, the continued surge in prices in many different areas, which could mean Japan's inflation level will eventually reach the 2.0 percent level that the Bank of Japan has been looking for.

But its not the best kind of inflation. The Bank of Japan most likely is looking for an increase in consumer spending inflation and not a supplier cost inflation increase.

Article:

A worker in the transportation industry said there are "few factors that indicate the economy will improve" given costs related to the sector such as the price of fuel and tires are all rising.

The office polled 2,050 workers from Feb. 25 to 28, of whom 1,808, or 88.2 percent, responded.

Ideas:

There might not be many factors that are positive in the Japanease economy, but its still the third largest economy in the world, which again means there is still a lot going on.

And yes, there might be price increases in fuel and tires but that doesn't mean all is bad in the economy.

An economy is made up of many different sectors. In a market economy there are always some sectors that do better than other sectors.

Right not those sectors that maybe are being hit hard by raw material cost increases and or fuel price increases might not be feeling good, but that doesn't mean all is bad. 

They might might just be breaking even or even still making some kind of profit but not what they want or what they estimated their sales might have been in Q1 or Q2.

Have a nice day and be safe!