Japan Key Economic Assessment:

 Article Source:  https://mainichi.jp/english/articles/20220421/p2g/00m/0bu/066000c

Article:

TOKYO (Kyodo) -- Japan's government on Thursday upgraded its key economic assessment for the first time in four months, citing a recovery in private consumption, as the effects of the coronavirus pandemic wane.

"The Japanese economy shows movements of picking up," the Cabinet Office said in its monthly report for April, while dropping the expression "some weaknesses are seen" it had used through the previous month.

The recovery has been driven by more spending for traveling and dining out, a government official said, as a COVID-19 quasi-state of emergency, which allows authorities to ask restaurants and bars to close early and stop serving alcohol, was removed across the country in late March.

Ideas:

Private consumption or private spending might have seen a slight increase but most likely it the tread is not going to continue as inflaton is going to squeeze consumer spending even more in the future.

Even if the Japanese government doesn't want to say it, there are still some major weaknesses in the Japanese economy. But of course all governments sometimes want to be as positive as possible.

Any economy that had a Q1 GDP growth of only -0.1 percent is not a very good economy, as weakenesses will continue for the time being.

There might be more spending for traveling and dining out but its nowhere near the pre-pandemic level yet.

Its going to take some time before the Japanease economy gets back to the pre-pandemic level.

Without a solid return of international tourism, the Japanese economy is going to remain below where its potential is.

Article:

But the Cabinet Office cautioned that short-term downside risks stemming from rising raw material prices, fluctuations in financial markets and supply-side constraints amid the war in Ukraine remain.

The office also said attention should be given to how the pandemic unfolds from now on.

By component, its view on private consumption was also upgraded for the first time since December. The monthly report said it recently "shows movements of picking up," compared with its previous expression "pausing for picking up recently."

Ideas:

These risks may not be short-term as this has been somewhat of an on-going problem since the pandemic started.

It just seems since the Ukraine war the inflation challenges has been more in the news lately.

Yes, it is important to see and what how the pandemic situation is going to unfold in the future, and how the Japanease economy is going to more forward related to any after-affects related to the pandemic.

"Showing movements of picking up" might positive in some ways but it must be remembered that consumer spending has never really reached its potential in the Japanese society or Japanese economy.

And the ideas of "pausing for picking up" may come back again as inflation continues to increase prices in many different sectors in the Japanease economy, meaning consumer spending might begin to slow down again or remain sluggish for a while as prices continue to increase.

Article:

The assessment on public investment was upgraded as well as "solid" from "in a weak tone recently, although it is at a high level." It was the first upward revision since July 2020, according to the office.

All other evaluations were kept unchanged, with the report saying corporate profits are "improving as a whole, although some weaknesses remain in non-manufacturers" and exports are "almost flat."

Its view on the world economy was retained for the third straight month, describing it as recovering as fewer countries have been seriously affected by the impact of the pandemic.

Ideas:

Public invesments, related to the Japaneae government, has always been mostly positive as its a major source of government spending in the Japanese government, whether its related to bridges, dams, airports, or other thing to help the economy grow.

Corporate profits might be improving but the employees of said companies probably are not seeing any increase in salaries as was suggested by Prime Minister Kishida back in December of 2021, as a way to get the economy moving and improve consumer spending.

Companies, as has been reported many times over the years, companies are sitting on huge piles of money in the banks and should some of it to improve the morale of their employees and help the economy overall.,

As employees, consumers, feel better about their increased salaries they might save some of it and they might spend some of it in economy.

But the problem now is inflation is going to make what salaries they have now seem even less, so a reason to increase the salaries of company employeess.

But companies of course are worried about inflation too and might use it as means not to increase the salaries of their employess.

Have a nice day and be safe!