Japan Economy View:

 Article Source:

 https://mainichi.jp/english/articles/20221221/p2g/00m/0bu/011000c

Ideas:

All central banks, including the Bank of Japan, try to find ways to say something positive about the economy and "picking up moderately" might be true and or they needed to say something positive.

An economy is very complex and not all sectors are going to be positive at the same time such as production might be slowing down as the global economy slows down.

Japan, being an export powerhouse relies heavily on profits from exports and the weak yen.

So most likely the Bank of Japan is placing greater emphasis on exports and the weak yen, and hoping that inflation and imports and the weak yen, will not be major challenge for the Japanese economy in the future.

China most likely is still a covid challenge and might remain so for some time.

Most likely the best the global economy can hope for, after the pandemic and as China begins to get back to some kind of normal, is some kind of modest growth.

As inflation is at the 40 year high in the US its not unexpected that the US federal reserve with increase the key rate and its seems that is the only strategy that most central banks use to decrease inflation.

But the Bank of Japan continues to follow a different strategy by keeping its key rate at almost zero percent.

The negative of the zero percent is it places the Japanese yen at a level well below the US dollar.

The positive of the weak yen of course it helps exporters bring in more profits which increased the Japanese current account.

Its not uncommon that sometimes there are "pauses in production and there are many variable involved including material supply challenges, demand challenge, supply line challenges and so on.

Exports might be flat especially those products that maybe where there is too a pause in customer demand for the export products.

Private consumption or consumer spending might be increasing moderately but how long can it be sustained with inflation and prices continuing to increase. 

Perhaps after two years of the pandemic households, families, and individual, increased their savings to the point that some, not all are able to not worry too much about inflation and increasing costs.

Have a nice day and be safe!