Japan Inflation:

 Article Source:

 https://mainichi.jp/english/articles/20221121/p2g/00m/0bu/032000c

Ideas:

It seems kind of late that the Japanese government is maybe just now addressing the inflation situation as this seems to be an on-going challenge that consumers and businesses see only too well.

Japan can’t blame the Russia/Ukraine war as this has been a challenge for the most part since the pandemic started.

Of course there is concern that a global slowdown can have major challenges for the Japanese economy, as Japan relies heavily on exports.

If the Japanese economy is becoming as severe as they say, again, why did they wait so long to finally begin to support the livelihoods or the Japanese people and business activity.

It seems at time, Japan, and all governments are reactionary and only respond until a crisis happens.

A budget of 29.1 trillion might not be enough if the economy is really in that bad a shape.

While a 5,000 yen a month savings is a good start but how far will that take a family whose disposable income and or extra income has been greatly reduced from increased energy costs, increase fuel costs, and so on.

Japanese policy makers might seen inflation as being transitory, not permanent, but tell that to the average family and average businesses and see what they say about it.

Consumer sentiment, or feeling toward spending is only going to get worse, especially if they don’t see any real wage growth in the future.

It must be remembered that the Bank of Japan’s 2 percent target is not really related to wholesale inflation or an increase in wholesale prices but more aimed at consumer demand and consumer spending which is not where they should be at this time.

And it highly unlikely that businesses are going to increase wages to 3.6 percent to match inflation which is needed to satiate workers and consumers in order to get them to spend in the economy.

No disrespect but just what does “a new form of capitalism” really mean. And just how does Prime Minister Kishida plan on redistributing wealth in the Japanese economy from major companies to regular families.

Estimates are always guesses and never accurate so the idea of a 4.6 increase in GDP might be a little ambitious and the Japanese economy has not grown that fast in decades.

For example for the July-September quarter the Japanese economy shrank 1.2 percent, so just how can there be the expectation of 4.6 economic growth.

In the past, as long as inflation and the yen was stable Japan didn’t worry too much about an occasional trade deficit because exports were always strong enough to overcome, overtime, the temporary trade deficit.

Japan and the BOJ might be correct in keeping rates low as maybe the Japanese economy is not very strong and can’t handle the extra side-effects from increased rates.

Japan also should, at this time, ignore those who talk about the the high debt to GDP that has as the Japanese economy needs some major re-engineering to help it overcome its current situation.

Have a nice day and be safe!