Japanese Business Sentiment:

 Article Source:  https://mainichi.jp/english/articles/20220408/p2g/00m/0bu/056000c

Article:

TOKYO (Kyodo) -- Business sentiment among workers with jobs sensitive to economic trends in Japan rose for the first time in three months in March in line with the lifting of all anti-coronavirus curbs on business activities, government data showed Friday.

The diffusion index of confidence in current conditions compared with three months earlier among "economy watchers," such as taxi drivers and restaurant staff, climbed 10.1 points from February to 47.8, according to the Cabinet Office.

The office upgraded its assessment of the economy from the previous month for the first time since November, saying it has shown "signs of picking up." In February, the office said the economy has shown "some weakness in its recovery."

Ideas:

Those with service types, that require contact with people/cusomers have got to be feeling much better and now customers/people can get out and about even more than before.

But Japan never had the extreme lockdown measures of China and other countries so people could still get out and about as much as they wanted.

And even restaurants, which were supposed to close at a certain and not serve alcohol after a certain time were really never under a required lockdown. But the Japanese public and businesses compared to other countries, tried to follow the government's suggestions about not going out unless it was essentail activities and most restaurants too probably followed the government's suggestions as much as possible.

The economy might be showing some signs or recovery but as the tourism industry as a long way to go before its back to anything resembling 2019, with 31 million international tourists, the Japanese economy will not get back to any real normal for a while.

Article:

In the reporting month, a coronavirus quasi-state of emergency that covered most of the country's 47 prefectures was lifted incrementally and was removed across the nation on March 22, just before the survey was conducted.

The office polled 2,050 workers from March 25 to 31, of whom 1,829, or 89.2 percent, responded.

Looking ahead, the diffusion index of business sentiment in the coming months climbed 5.7 points from February to 50.1, surpassing the boom-or-bust line for the first time since December.

Ideas:

Surveys always need to be taken with a grain of salt, meaning its hard to sometimes really know what they mean, as people are people and they can easily change their thinking about many different things.

So really what does a reading of 50.1 mean? Does the 0.1 mean all is ok, or now getting better and so on. So in reality there not much confidence in a measurement when people are invovled as again next week they can easily change their mind, change their spending level, change their investments, and change how they think or feel about what is going in an economy.

If there was just a survey related to tourism workers and companies, especially related to international tourism, you might get a different measurement or reading as that group is far from where they were in 2019, when 31 million international tourists entered Japan and spents million of money on whatever in Japan at the time.

Article:

Workers welcomed the removal of the COVID-19 restrictions and pinned their hopes on the expected resumption of the government's subsidy programs to support local tourism, the poll showed.

"After the quasi-state of emergency was lifted, the number of leisure guests for weekends increased significantly," said a hotel staffer in the Hokuriku region in central Japan.

An ad agency worker in the Kinki region of western Japan said promotions for commercial and leisure events in April are starting to increase again.

Ideas:

The  domestic tourism industry is probably beginning to get back to some kind  of normal but even it might not reach the 2019 level when everyone was out and about and moving all over Japan.

It might be a good time to restart the "Go to Travel" program to further boost domestic travel and a lot of revenue was lost during the pandemic and any kind of program or subsidy might be a good supplement at this time to spur economic growth with Q1 growth was onoy -0.1.

The "Go to Travel" program probably should be maintained through the summer and early fall to help the domestic tourism industry as again companies lost a lot revenue and profits during the two years of the pandemic.

Article:

But some voiced concerns about rising energy, food and raw material prices that have accelerated since Russia's invasion of Ukraine.

"It is unclear how large the cost rises will be so we cannot pass all the increases on in sales prices," said an employee of a transportation business in the southwestern region of Kyushu. "We expect our sales to rise but profits to decrease."

Ideas:

And of course, there is the continued ongoing inflation situation that is now in Japan and globally too.

So even though there is more movement here and there prices in many different areas might be a constraint that might cause some to decrease spending, to decrease travel, to decrease going out to restaurants, and decrease spending on whatever, either online shopping or going to stores. 

And add in home energy cost increases and supermarket prices going up the Japanese economy is a long way from 2019 which seem seemed very different. 

Things were not perfect in 2019 with mutiple typhoons that hit along with sales tax increase from 8 to 10 percent, but they were cerntainly a lot better than now.

Have a nice day and be safe!