Ideas:
A moderate recovery is probably all that can be expected of the Japanese economy at this time, as inflation will continue to weigh on the economy.
Private consumer or consumer spending might be improving related to services but overtime it might begin to slow down as inflation begins to take its on households.
The Cabinet Office or any government office always wants to show things are improving, even if they aren’t exactly.
Public investment is a cyclical indicator, as its not always in the process of happening and over any time it be up and down.
The economy might actually be picking up moderately but an economy is very complex organism and different sectors grow differently. While some grow a lot, some grow slowly, and some don’t grow at all, which is the nature of a market economy.
Again consumer spending might have picked up, especially for services such as dining out but it might not last that long with inflation continuing to increase, which will decrease the extra income consumers have.
Its good that the domestic travel program was started again as that should help hotels, restaurants and so on and the overall services sector and or hospitality sector.
An eight wave might be in Japan but so far, hopefully there will b no restrictions like in past.
Rate hikes can be both a positive and a negative, as the higher rates can discourage borrowing and discourage even consumer demand overall.
For Japan, the BOJ might be correct in keeping its ultralow rate policy, while what the US and the EU is doing might be right for them too.
Exports might be flat but just what does that mean exactly. Does it mean exports are not growing significantly or just not growing like in the past.
Business investment is another cyclical indicator and business investment is never constant. Some months are always more than other months as the business cycle shows.
Private consumption or consumer spending might be recovering moderately, but, again, inflation will constrain spending as prices continue to reduce the extra income that households have.
The fact that the 3rd largest economy contracted by 1.2 percent shows the economy is not really recovering as expected, and its going to take time for the Japanese economy to fully recover.
Private consumption or consumer spending as always been the weak link in the Japanese economy, as the average Japanese consumer just doesn’t spend like the average US consumer.
The Japanese government plan of a 29 trillion economic package, while good, might not be enough to help those in need.
Only time will tell how much is needed and if the 29 trillion is really that effective.
Have a nice day and be safe!
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