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!