Japan Jobs Availability:

 Article Source: https://mainichi.jp/english/articles/20220729/p2g/00m/0bu/008000c

Article:

TOKYO (Kyodo) -- Japan's job availability ratio improved for the sixth consecutive month in June, reflecting the waning impact of the COVID-19 pandemic on social and economic activities, government data showed Friday.

The job-to-applicant ratio rose 0.03 point from the previous month to 1.27, according to the Ministry of Health, Labor and Welfare. The ratio means there were 127 job openings for every 100 job seekers.

The number of job offers increased especially in the accommodation and food service sector, up 30.9 percent from a year earlier, partly due to Japan's easing of border controls to accept foreign travelers, according to the seasonally adjusted data.

Ideas:

The jobs availablity ratio might have increased some, which is a good sign but the idea always is what kind of jobs were made avaiable. Were they jobs good enough that new graduates or other can feel good about or are they just menial jobs to make it look like there are a lot of good jobs avaiable.

And its good that finally the accomadation and food service sector was maybe finally beginning to get back to some kind of normal after two years.

But the challenges is, over a two year period how many jobs were lost in this sector and how fast that they be replaced. 

As Japan will eventually open up completely to foreign vistors are the hotels, restuarants, tourists areas ready for the increase of foreign tourists that will come eventually.

Article:

But the labor ministry warned job offers in July may be affected by the resurgence of coronavirus infections, after Japan reported over 230,000 cases Thursday, hitting a new record for the second consecutive day.

Separate data from the Ministry of Internal Affairs and Communications showed Friday the seasonally adjusted jobless rate in June stood at 2.6 percent, unchanged from the previous month.

The rate for men dropped 0.1 point from the previous month to 2.7 percent, while the rate for women climbed 0.1 point to 2.5 percent.

Ideas:

You would think by now, after two plus years of the pandemic that companies might have taken a "live with covid" approach and not let the pandemic affects its hiring decisions.

The 2.6 rate is probably much lower than many advanced economies and it might show that Japan's economy is still in much better condition than other advanced economies.

But at the same time is the low unemployment rate reflect those who need or want work and just how difficult is it to get a job in Japan.

Of the situation for working women might always be a challenge to find the best job available and or what where they might be able, if married with children, able to do both at the same time.

And then there is the older generation who might still need or want to work. How well can they get meaningfull jobs in Japan.

Article:

"The unemployment rate remained flat but the content and details of the statistics were good," said Megumi Wada, a researcher at the Daiwa Institute of Research, pointing to the declining trend for people without jobs.

The seasonally unadjusted number of unemployed people in June totaled 1.86 million, down 210,000 for the 12th consecutive month of decline from a year earlier, the government data showed.

Looking ahead, Wada said, "I project the recovery trend will continue unless there is a shift of policy by the government to restrict activities."

Ideas:

No doubt as the Japanese economy continues to improve more and more companies might be looking to re-hire previous workers and or add new positions that are needed in the company.

Companies might be re-hiring or adding new positions but the question still remains will they also begin to increase wages too as the economy begins to improve.

Maybe not so much as inflation related to energy costs and supplier costs keep increasing they might feel their profit margins are too compromised at this time for any changes in wages.

And then there is the ideas that many companies, in Japan, these don't hire full-time full benefit employees but workers on contract only with less benefits as a way to cut costs.

Article:

The number of people who involuntarily left jobs decreased 110,000 from a year earlier, and the number of those who voluntarily left dropped 50,000, the data showed.

The number of people with jobs increased 210,000 to 67.59 million for the third straight month of increase from a year earlier, according to the data.

By industry, the number of workers in the health care and welfare, academic research and telecommunications sectors increased notably from a year earlier.

Ideas:

If an economy's labor market is fluid, meaning its easy for labor or workers to move around and easy to find jobs without much effort, and if Japan is anywhere near the level of other advanced economies than the movement of workers in and out of jobs should not be a real problem.

The increase in the health care and welfare industry is not a surprise and Japan is an ageing society so those kinds of workers are needed now more than ever.

The academic research area might be nothing more than bringing in some academics from overseas and or as Japanese universities get back to some kind of normalcy they need more as more and more students return to the classrooms.

As to why the telecommunicatations sector increased is kind of mystery as you would think that many of those workers might have been involved in remote work over the past two years.

There is always the possibility of new innovations in the telecommunications industries and new products and services required the hiring of new workers.

Article:

People who temporarily left the workforce decreased to 1.57 million, the lowest figure since 1.48 million in June 2019 before the spread of coronavirus infections, reflecting a decreasing trend of workers on leave.

"The situation has been easing for the companies that had been forced to suspend their operations," a government official said.

Ideas:
Its a good idea that workers in Japan might be leaving the workforce less because they feel they have good jobs and want to remain in them.

And as companies feel the Japanese economy might finally be getting back to some kind of normal they feel they can begin to rehire workers and or hire new workers, begin to invest again and begin start up projects that were put on hold because of the pandemic.

But the Japanese economy is probably a long way before it gets to the pre-pandemic level again and there probably many companies now having to deal the the inflation situation and still have recovered from all the losses they incurred during the pandemic.

Have a nice day and be safe!

Japan And Wage Increases:

 Article Source: https://mainichi.jp/english/articles/20220729/p2g/00m/0bu/014000c

Article:

TOKYO (Kyodo) -- Japan on Friday urged companies to raise wages on par with price hikes of around 2 percent, a level the central bank has set as its inflation target, so that the world's third-largest economy can complete its exit from deflation.

The government said in its Annual Report on the Japanese Economy and Public Finance that such an economy will block the country from falling into stagflation, at a time when the United States, Europe and others are suffering from price surges fanned by Russia's war against Ukraine.

It was the first such paper compiled under Prime Minister Fumio Kishida, who pledges to bring about "new capitalism," characterized by a virtuous cycle of growth and redistribution driven by investment into people.

Ideas:

Its very much needed to help the Japanese economy and consumer, but with the increase in costs affecting many companies it might not happen or not a lot of companies might not do it.

Back in December 2021 Prime Minister Kishida suggested a 3 percent increase in wage increases but its highly unlikely any companies really did that much. They might have done something much less.

But now that supply and energy costs have continue to increase is even more unlikely companies are going to do it.

The Prime Minister's ideas seem a little unclear as to how they are going to do it. Unfortunately government say something and then they either don't make it clear and or don't really know how to do it.

Article:

The document underscored "the need to shift to a new system featuring sustained and stable price increases of about 2 percent and corresponding wage growth rates."

"Given that the economy continues to be picking up and the rate of price increases is not significantly high, Japan is not in a state of so-called stagflation," which involves slow growth and high inflation mixed with high unemployment, it said.

The rate of price hikes in Japan is higher than that in the recent past, but it is attributable primarily to surging import prices driven by crude oil prices, said a government official who briefed reporters.

Ideas:

Granted Japan might not be in the same condition as Europe or the US but the Japanese economy might not be that well off too. 

It might still be in the state of "light-stagflation" or just on the edge of it, if the Japanese economy can't find ways to get past the perpetual low growth of 0 to 1 percent each year.

It migh be in the 2 percent range right now but that's because growth was very low during the pandemic period.

Yes, prices in Japan haven't increased like in the EU or the US but the 1.9 or so of price increases in Japan might still be too much for many consumers.

The weak yen doesn't help as it continues to cause increases in import prices and other prices in the Japanese economy.

Article:

Japan has yet to completely exit from long-lasting deflation, the official said.

"To get (the country) out of deflation, it is vital that nominal wages rise in line with price increases and growth in labor productivity," the paper said.

But since 1997, "The rate of increase in nominal wages has not been enough considering the rate of price increases," it said, citing businesses' cautiousness to expand operations by carrying out major investments in the midst of persistent deflation.

Ideas:

Japan is not going to completely exit from long-lasting inflation until companies are forced to increase wages.

The Bank of Japan's plan of keeping interest rates near zero and and in large banks as an incentive for large companies to use or lose their holdings in banks over the long term doesn't seem to have worked as wage increases are no where to be seen.

Labor productivity is a very different situation and it might mean Japanese companies need to join the 21st century in how they do things to improve productivity.

Japanese companies need to learn how to take calculated risks instead of always playing it safe even if the market conditions are not perfect. 

Its too easy for a Japanease company to use the "wait and see" approach, meaning waiting until the investment enviornment improves. Well the environment has been the same for 30 + years and they need to start taking some risks to grow and improve.

Article:

Companies have also regarded wages as costs, not investment in employees, resulting in insufficient distribution of profits.

Since the start of this year, the impact of the COVID-19 pandemic on the economy, such as private consumption, has diminished, while capital investment has shown signs of picking up but is still under pre-pandemic levels, according to the paper.

Following Russia's invasion of Ukraine that started in late February, the world has been hit with a storm of soaring prices that has stoked concerns about stagflation in many countries.

Ideas:

It seems Japanese companies or some or many Japanese companies now see employees like western companies do and not as important stakeholders but just costs and important parts of the company like many did decades before.

The insufficent distribution of profits will going to get bigger and bigger in Japan as Japanese companies become more like their western counterparts.

Part of the problem is now shareholders, investment companies and so on are only interested in short-term or quarterly profits and not in the long-term.

Before companies could take a long-term approach and including investing in their employess who at the time considered important stakeholders in the company.

But it seems those days may be long gone in Japan as the short-term approach and short-term profits is all that matters today.

Article:

From macroeconomic perspectives, however, inflationary pressure is weaker in Japan than in Europe and the United States, the paper said.

It also touched on bottlenecks in advancing carbon neutral efforts in Japan, while saying environment measures can contribute to economic growth, citing stricter emission regulations resulting in increased competitiveness of Japan's auto industry in the 1970s as an example.

The paper said it is necessary for Japan to consider increasing the use of nuclear power because it emits no greenhouse gases, and fossil fuel and gas prices have been surging globally in the wake of the Ukraine crisis.

Ideas:

Yes, inflationary pressue might be much weaker in Japan but for some groups its still might be too much for some groups. And as Japan has been in a quasi-deflation period for a long time even the normal consumer might seem like its too much now.

Any kind of innovation related to carbon neutral efforts in Japan will cost and will need to have some political will of the Japanese diet to advance such ideas as companies are going to resist any such moves that might cost them any more in this environment.

And yes, as energy costs continue increase Japan needs to look at going back to some kind of nuclear power. The 2011 situation is long over and hopefully the Japanese government has put into place regulatory safegaurds to make sure TEPCO and other companies are able to provide safe situations related to nuclear power.

Article:

Most nuclear power plants in Japan have stayed offline since the 2011 Fukushima nuclear disaster.

The paper called for investment in digital technology skills, saying digital transformation involving artificial intelligence and Internet of Things would contribute to solutions to social issues and the promotion of carbon neutrality.

Ideas:

These are all good ideas but they are not going to happen on their own. The Japanese government needs to provide some incentives or subsidies, if they aren't doing them yet, as a way to get companies involved in new innovative technologies to help the economy transform and grow.

It would seem by now that someone or some group has been looking at the idea or ideas of re-starting nuclear power plants for the good of the Japanese economy and Japanese society, due to the continued increase in energy prices globally.,

The 2011 situation was a once in a lifetime situation and most likely the idea a earthquake and tsunami cause problems for another power plant is very low.

But still there needs to be plans put into place by TEPCO and other companies for any and all scenarios that might happen no matter how unlikely the possibility.

Have a nice day and be safe!

Japanese Consumer Prices:

 Article Source: https://mainichi.jp/english/articles/20220725/p2g/00m/0bu/047000c

Article: 

TOKYO (Kyodo) -- Japanese consumer prices, including fresh food, are expected to rise 2.6 percent in the current fiscal year through March from a year earlier, mainly due to Russia's invasion of Ukraine and the impact of the yen's depreciation, the Cabinet Office said Monday.

It also revised Japan's real gross domestic product growth downward to 2.0 percent from the previous estimate of 3.2 percent released in January.

"Rising prices are a risk to the economy recovering from the coronavirus pandemic," Prime Minister Fumio Kishida said at a meeting of the Council on Economic and Fiscal Policy, where the projections were presented.

Ideas:

Consumer prices increases again, it must be remembered, are not because of an increase in consumer demand or consumer spending but because of an increase in supply prices being passed on to the next in the supply chain, including the final consumer.

A GDP growth of 2.0 percent might be a more realistic estimate of what the Japanese economy is at, and that could be a a stretch, meaning it might even be less than that by the end of 2022.

Increasing prices in many industries are going to crowd out overall spending in the Japanease economy which is going to limit economic growth.

Including the ideas of wage increases which is very important for the Japanese economy to grow.

But as companies are under stress for supplier costs most likely there profits margins are too thin to think about any wage increases at this time.

Article:

To prevent consumption from sliding amid surging prices of essential items, the government has pledged to take necessary steps, including giving reward points to households that reduce electricity consumption and aiding farmers grappling with high fertilizer costs.

The government plans to spend a total of about 260 billion yen ($1.9 billion) on the countermeasures by tapping into a reserve fund.

For fiscal 2023, the Cabinet Office predicted a 1.7 percent increase in consumer prices. It expects crude and other energy prices will remain high.

Ideas:

The government might pledge to help society but they have to make is a user friendly as possible. Meaning if there is too much paper-work or too much red-tape some or many families or those in society might not be able to get the help.

During the pandemic there were many programs related to subdies and so on but the paper-work or red-tape might have been too much for some.

Consumer prices, energy prices, and raw material prices increases are proabably here to stay for a while in the Japanese economy and the Japanese government needs to find user friendly ways to ease the burdend on society and companies.

Article:

The Bank of Japan has estimated prices, excluding fresh food, will rise 2.3 percent in the current fiscal year.

The key economic council includes members of Kishida's Cabinet, BOJ Governor Haruhiko Kuroda and business leaders.

Ideas:

Some might think an increase of 2.3 percent is not that much. And yes, price increases are very much an individual situation. As the elasticiy of prices might not be a big deal for some but it could be a bid deal for fixed income group and or lower income groups who have less to spend on daily necesssities compared to other groups.

But one challenge is Japan for too long, maybe good or not, has not really had to deal with a big increases price increases as Japanese companies usuualy are very reluctant to pass on their cost increases to the next in the supply chain or even the final consumer.

So the past six months or so maybe have been a major challenge in Japan for many in society who are used to deflation or lower prices for maybe way too long.

Now Japan and society have to learn and adjust to the higher prices which might be here for a long time, unfortunately,.

Have a nice day and be safe!

BOJ Ultra-Low Rate Policy:

 Article Source: https://mainichi.jp/english/articles/20220721/p2g/00m/0bu/030000c

Article:

TOKYO (Kyodo) -- The Bank of Japan on Thursday maintained its ultralow rate policy despite the impact it is having on the strength of the yen as the central bank looks to support the nation's nascent economic recovery, bucking the global trend of monetary tightening despite domestic inflation which is now forecast to reach its target this year.

In a quarterly outlook report, the BOJ upgraded its core consumer inflation forecast to 2.3 percent in fiscal 2022, up from its earlier forecast of 1.9 percent, reflecting surging commodity prices.

The revision reflects higher energy and raw material costs, blamed on Russia's invasion of Ukraine, along with the effect of a weak yen that inflates import prices. Risks to prices are "skewed to the upside for the time being but are generally balanced thereafter," the BOJ said.

Ideas:

Perhaps the Bank of Japan knows something that the rest of society or others don't know and still think the key rate doesn't need to be increased compared to other countries.

It must be remembered that the core consumer inflation increase is not really about consumer demand or consumer spending but about supplier costs increasing and supplier or companies passing on their costs to the next in the supply chain.

Energy and raw material costs most likely are going to continue to increase and companies and society have to figure out ways to ride out the continued increases.

The weak yen, while maybe good for exporters and their profits, it has become too weak now for most importers and other companies. A weaker yen makes the increase in energy costs and the increase in raw material cost be even higher now.

Article:

The war in Ukraine, supply bottlenecks prolonged by China's zero-COVID policy, and recession fears driven by policy tightening in major economies are casting a pall over the Japanese economy. The world's third-largest economy is now forecast to grow 2.4 percent in terms of real gross domestic product for fiscal 2022, down from 2.9 percent seen in April, the BOJ said.

The central bank retained its yield curve control program by setting its short-term interest rate at minus 0.1 percent and guiding 10-year Japanese government bond yields around zero percent.

The largely expected decision solidifies the BOJ as an outlier among other major central banks which are scrambling to tame surging inflation. It comes ahead of an expected rate hike by the European Central Bank on Thursday, its first in 11 years, and another rate increase by the U.S. Federal Reserve next week.

Ideas:

An increase in the key interest rate among different economies can have some side-effects. These side-effects might push some economies into a recession type situation.

Some side-effects might be a slow down in overall economic activity including higher loan rates as banks, higher mortage rates for the housing market, higher rates for those who already have loans, higher rates for those who need a loan and so on.

Which could result in a an overall slow-down in an economy. Some might say how can the rate high really help with all of the possible side-effects.

Its kind of like going to the doctor to get some kind of medicine and the doctor knows there are going to be some side-effects despite the medicine being good for you.

The Japanese economy might grow at an expected 2.4 percent, but does it really reflect what is happening in the overall economy. 

How many businesses are not doing too good right now becuase of inflation and or still feeling the pandemic effects.

Because many industries and companies are not back to the pre-pandemic level its probably a good idea for Bank of Japan to maintian its current position on rate hikes.

Article:

The diverging policy paths, or the widening of the interest rate divide between Japan and its U.S. and European peers, have sharply weakened the yen toward 140 versus the dollar, a psychologically important line that could test the tolerance of Japanese authorities that are increasingly concerned about currency's rapid depreciation.

The Japanese central bank retained its in-principle offer to buy unlimited amounts of 10-year bonds at a fixed rate of 0.25 percent every business day to defend its upper limit on the key yield.

Ideas:

The weakening yen compared to other currencies is of course a major challenge for the Bank of Japan. 

The problem is of course as the weak yen continues to weaken more and more importers and other companies are being stressed with higher prices and costs.

Perhaps, just perhaps, the Bank of Japan might be thinking too much about how a weak yen can help Japanease exporters and maybe trying to weigh the benefits and costs of a weak yen and the overall Japanese economy.

At some point, if the yen continues to weaken, the Japanese government might try to persuade the Bank of Japan to intervene in the market and do what it can to stabilize the yen situation.

Article:

After the yen hit a 24-year low against the dollar, the BOJ said earlier this month it needs to pay "due attention" to developments in financial and currency markets and their impact on the economy. The dollar was trading in the lower 138 yen zone immediately after the decision.

The BOJ cited extremely high uncertainty over the Japanese economy but gave a brighter assessment than the previous meeting last month. The economy "has picked up with the impact of COVID-19 waning, despite being affected by factors such as a rise in commodity prices," it said.

Ideas:

Yes, the economy might be picking up in some areas, but at the same time, there might be some parts of the economy that still not at the pre-pandemic level yet.

It could take six months to a year for the Japanese economy to finally get out of the pandemic side-effects.

But of course the inflation situation might linger on and on for a while, which might cause some or many companies to think they are still in the pandemic situation.

And for 2023, there is talk that 2023 is going to be a recession, if not already which could be even more challenges to the Japanese economy.,

Have a nice day and be safe!

Japan Govt. Help And Prices:

 Article Source:  https://mainichi.jp/english/articles/20220717/p2g/00m/0bu/021000c

Article:

TOKYO (Kyodo) -- Roughly half of Japanese companies think the government should take more steps to curb the impact of soaring prices as they bear the brunt of higher energy and material costs, partly due to Russia's invasion of Ukraine and a weaker yen, according to a recent survey by a credit research firm.

Asked about the kind of economic measures they want the government to focus on, 50.8 percent of the companies selected financial support, gasoline tax cuts and purchase cost subsidies in the multiple response survey conducted by Teikoku Databank.

Ideas:

There is always a debate about how much should a government interfere in the overall process of an economy. Of course some say a government should not be inovovled in an economy and some say its the government role to make sure the economy is operating efficiently.

In this case, with energy costs increasing, raw material costs increasing, and prices at supermarkets and so on increasing with no end in sight, for the good of society, maybe the Japanese government should step in to ease the problems that businesses, households, and overall society has.

Just the challenges is just how much should they do without disrupting the overall flow of the market processs. Sometimes government can do to much or try to do too much and it becomes problem for the overall markete process.

Article:

Prime Minister Fumio Kishida has pledged to swiftly help households and companies combat rising bills, a major issue in the House of Councillors election earlier this month.

Kishida told a press conference Thursday the government plans to use part of around 5.5 trillion yen ($40 billion) in reserve funds to that end.

Among a total of 22 choices in the survey, measures to help boost consumer spending and secure a stable power supply were selected by 43.1 percent and 42.4 percent of the respondents, respectively.

Ideas:

Again how does government increase consumer spending without it being a artifical boost, meaning, after consumers get a subsidy and eithe save it or spend then what after that amount is gone. Then consumers are back to what they first started, with higher costs and nothing else to show.

Just maybe the idea could be to reduce the sales tax back to the 2014 level as a way to reduce costs for consumers. But again that might just be a temporary fix for a long term problem.

There is no easy solution or answer here. Whatever the Japanese government does problably is not going to help everyone or every company.

Does the Japanease government has the money or the will to provide monthly subsidies, that are big enough to help all or many in society. Probably not.

Even for example a 50,000 yen subsidy to low income families is not going to be enough as a one time subsidy is not going last very long as prices continue to increase.

Article:

By sector, 72.7 percent of transportation and warehouse firms that typically struggle with higher crude oil prices selected the response calling for government measures to deal with that issue.

With the yen having rapidly depreciated against the U.S. dollar and other major currencies, 28.2 percent expressed the hope that the government would tackle changes in foreign exchange rates, according to the online survey conducted across the country between July 1 and 4 that received 1,926 valid responses.

Ideas:

The continued idea of oil price subsidies to oil suppliers in Japan is still and good idea but it needs to be a continual process and not just a once a month situation as oil prices keep increasing so oil subsidies too need to keep increasing.

Most likely if the yen had not depreciated as much as it has prices increases in Japan wouldn't be seen as this much of a challenge, as Japan is a resource chaellenged economy and always has to import whatever it need.

But now as the yen keeps getting weaker imports keep increasing, such as energy prices, raw material prices, supermarket prices, department store prices, and restaurant prices over time.

Article:

Among the respondents, an official at a construction metal products maker said, the government needs to "make efforts on more fundamental policies, rather than superficial subsidies and tax cuts."

"The government should promote growth strategies from a medium- and long-term perspective, such as support measures aimed at raising wages, improving productivity and making (domestic firms) more internationally competitive," the Teikoku Databank report said in its conclusion.

Ideas:

Increasing wages and increasing productivity of course are always major concerns for the Japanease economy.

And both take cooperation from businesses to be implemented over time. The Japanese government can have all the plans, goals, visions etc they want but if they don't have the cooperation businesses to make the needed changes if might not happen.

For example in Deccember of 2021 Prime Minister Kishida suggested companies should increase wage by 3% for fiscal 2022. But how many have done it with all of the increases in costs now taking place.

And are companies actually going to innovate or change or be more producting without any form of incentive to do so. 

Companies need real incentives to makes the changes needed to be more productive.

But maybe some of the problem in productivity might be some losses of or changes in labor, meaning a loss of jobs for some. 

So its not a easy situation for companies in Japan to makes the changes needed to be more productive if it means laying off employees.

So Japanese government and business need to work to together to ensure that productivity changes don't affect overall Japanese society.

Have a nice day and be safe!