Japan Unemployment Rate: : Updated Oct. 4, 2023.

 Article Source: https://mainichi.jp/english/articles/20230530/p2g/00m/0bu/009000c

Article:

TOKYO (Kyodo) -- Japan's unemployment rate in April fell 0.2 percentage point from the previous month to 2.6 percent, the first improvement in three months, in a sign of a continued recovery from the coronavirus pandemic, government data showed Tuesday.

The number of people with jobs stood at a seasonally adjusted 67.44 million, surpassing the pre-pandemic level of 67.36 million for the same month in 2019, as more people started working amid moves by companies to raise wages, a government official said.

Ideas:

A decrease of 0.2 is really not that much, yet, but at 2.6 percent, Japan might still be lower unemploymen for advanced economies. 

What the article might suggest, with wages improving, that people are now looking for work, but maybe during the pandemic and just after were not really looking for work.

Yet, as employment surpassed the pre-pandemic level might suggest that people are somewhat satisfied with what is happening with economy and wage increases.

But umemployment could increase some, as people look for better wages and better jobs in the future.

Article:

The job availability ratio remained flat at 1.32 in April, indicating there were 132 job openings for every 100 job seekers, according to separate government data.

The number of job openings decreased 0.6 percent from the previous month, while that of job seekers declined 0.7 percent, the labor ministry said.

By sector, new job openings in accommodation and food services increased 8.2 percent from a year earlier, while those in construction and manufacturing decreased 9.6 percent and 9.3 percent, respectively.

Ideas:

There might be 132 jobs for every job seeker but how many jobs are there. Are they good full-time jobs with good benefits that young workers or any worker is looking for or are they part-time contract jobs with little to no benefits.

The number of openings might have decreased, as the pandemic has eased and more people are now working and companies finally beginning to fill jobs.

The accomdation and food services sectors were hit hard by the pandemic and lost a lot of jobs so now maybe they are finally starrting re-hire and or fill all the jobs that were lost during the pandemic.

Construtcion and manufacturing might have decreased as people move to better jobs and or less demanding or labor intensive jobs. A report earlier stated that construction and manufacturing, specifically had the highest increase in wages and they might have seen they needed to increase wages to keep or get new workers.

Article:

Megumi Wada, a researcher at the Daiwa Institute of Research, said many hotels and restaurants tried to bump up hiring ahead of the country's major holiday season from late April through early May, while the declines seen in some sectors likely reflected weakening demand overseas.

The total number of unemployed people stood at a seasonally adjusted 1.80 million in April, down 7.7 percent from the previous month, data from the internal affairs ministry showed.

Among them, 730,000 people voluntarily left their jobs, down 11.0 percent, while 440,000 people were dismissed, down 15.4 percent from the previous month.

Ideas:

This Golden Week was the first week since the pademic has ended that people finally started to travel again which means of course hotels and such were trying to re-hire workers to meet the demand for Golden Week.

There are always going to be a certain number of unemployed in an economy as people want or need to change jobs not to mention those who unfortunately were layed because of not so good companies.

It's very important that a society or economy has quality social net programs for those who have been layed-off or unemployed and can get some benefits while they look for new work.

The fact that dismissals were down 15.4 percent is a good sign that people are working again and companies are re-hiring workers that might have been layed-off during the pandemic.

Article:

The unemployment rate stood at 2.7 percent for men, down 0.3 point from the previous month, while the rate for women declined 0.1 point to 2.4 percent.

"The unemployment rate is projected to continue declining moderately to the pre-pandemic level in the lower 2 percent range, along with the normalization of economic activities," Wada said.

Earlier in May, the Japanese government downgraded COVID-19 to the same category as seasonal flu and significantly relaxed its intensive medical rules, marking a major shift in its approach after three years of dealing with the disease.

Ideas:

While the umemployment rate for men was 2.7 percent might indicate there is still a way to go before full employment is reached. 

Even if the unemployment does reach the 2.0 percent level there is still going to be some who don't want to work, don't need to work, retirees, and those looking for work that were once employed.

But again there are always going to be a certain level of umemployment in any economy and Japan is no exception.

Japan like many countries tried to do their best related to the pandemic situation but probabley no country was perfect in what they tried do. 

Sometimes istwas all about resources such as hospitals, nurses and so and just how many they could put in a hostpital and so on. No country was perfect in their attempt to manage the pandemic.

Hopefull when the next pandemic happens countries have a better way to managing the situation.

Updated Oct. 4, 2003.

Have a nice day and be safe!

Japan Economy Estimate:

 Article Source: https://mainichi.jp/english/articles/20230525/p2g/00m/0bu/091000c

Article:

TOKYO (Kyodo) -- The government on Thursday lifted its view on the Japanese economy for the first time in 10 months, sounding more upbeat about exports and production in May while private consumption remains resilient due to the impact of COVID-19 waning.

In its monthly report for May, the Cabinet Office described the economy as "recovering at a moderate pace," as it upgraded the view on exports for the first time since December 2020.

Ideas:

Exports and production might be improving and consumer spending might also be OK for now but if the inflation challenge continues consumer spending might begin to decrease ove time.

Governemnts, for the most part, always wnat to sound positive as not to influence investors from leaving and going to other/better investment areas.

So the language, "recovering at a moderate pace" is probably a best guess scenario to keep investors happy.

Exporting, while only about 20 percent of the overall economy, is still big enough for all concerned to watch it carefully for  possible trends. Exports maybe since 2020 has not been as good as wanted or needed as exports are very dependent on global demand.

Article:

The government said previously that the world's third-largest economy was "picking up moderately, although some weaknesses are seen." The last time the office used the expression "recovering at a moderate pace" was in February 2020.

The upward revision came after Japan's economy rebounded from a technical recession in the January-March quarter, even though uncertainty remains over the strength of the global economy after aggressive rate hikes in major economies. Financial markets have been on edge amid the U.S. deadlock over its debt limit.

Ideas:

An economy, Japanese economy, is very complex as there are many sectors which all don't increase or decrease at the same linear rate each quarter or each year. There are going be some that improve a lot and some might not increase at all.

Whether positive or negative, most economies, globally, are now very connected to each other as such what happens in the US with its key interest rate hikes can have an affect on the Japanese economy too.

Financial markets are very fickle meaning they are very emotional and react sometimes to any slight, positive or negative, relating to anything that happens now globally, not just domestically.

Article:

A technical recession is defined as two consecutive quarters of negative growth.

The easing of disruptions in semiconductor supply chains has allowed automakers to ramp up production that had to be cut. The May report said production has shown "signs of picking up," an upgrade from April, and exports are "steady," rather than "in a weak tone" a month earlier.

Ideas:

A technical recession is never good, but expect for the inflation challenges did anyone feel or know there was a technical recession. Sometimes, the media might say there is a recession but the public might not know it or even feel it.

By now the semiconductor industry and automakers should have been able to solve their supply chain challenges so that if there are shortages or potential for shortages in the future they alrealy have plans on how to prevent such challenges again.

Again the language used might be just to keep investors happy and keep them from moving on to other investment areas.

Article:

A revival of inbound tourism has also lifted exports as spending by foreign visitors in Japan is treated as exports.

Private consumption, a major driver of growth, also saw an upward revision the first in 10 months, as the report said it is "picking up."

Rising prices of everyday goods come as a blow to households but consumption has been supported by pent-up demand, especially for services such as dining out and going on trips, economists say.

Ideas:

Japan might not reach the 2019 level of 19 million foreign visitors but they will probably get very close to it. 

As the Japanese yen is weak now, its a strong magnent for foreign visitors going to Japan as the weak yen allows vistors to spend more in Japan which of course increase economic activity and the Japanese economy overall.

Private consumption or consumer spending is big in any major economy but not as big in Japan as it should be because of inflation and of course because of low wage growth.

If the wage increases actually take place it will help some but as many Japanese wage earners might not work for major companies, there might be a large portion of the Japaneae population without wage increases which might lesson consumer spending in the Japanese eonomy.

Pent-up demand might be strong now, but as inflation challenges continue and as the pent-up demand begins to wane, there might be less spending eventually.,

Article:

In early May, the government started treating COVID-19 the same as seasonal flu under the law, meaning that it has no authority to ask those testing positive to stay in hospital or quarantine.

The office continued to warn that "full attention" should be given to inflation and developments in financial markets, but dropped its reference to supply chain bottlenecks.

In the latest report, the global economic view was lifted for the first time since August 2021, saying that it is picking up despite weakness in some regions.

Ideas:

Many countries might have not treated the pandemic in the best way possible as it was all very much an experiment in how to do it correctly. But maybe the next time countries now have a better understanding how to handle a pandemic.

If Japan was taking inflation serisously there shouldn't seem to as much attention to trying to solve it compared to the US and the EU.

But to be fair what the US and the EU have tried to do also not worked yet or not that well.

Maybe Japan's approach is like someone with a cold, or the flu, with the idea of just let  inflation runs its course like the flu or a cold and it will eventually solve itself, as increasing the key rate also has some major side affects like taking medicine to get rid of the flu,which some might think the medcine feels worse than the actual flu or cold.

Have a nice day and be safe!

Japan Company Wage Increases:

 Article Source: https://mainichi.jp/english/articles/20230519/p2g/00m/0bu/062000c

Article:

TOKYO (Kyodo) -- Major Japanese companies raised wages by an average 3.91 percent in this year's spring wage talks, marking the biggest increase in 31 years in the face of repeated calls by Prime Minister Fumio Kishida for pay rises to cope with inflation, Japan's biggest business lobby said Friday.

The average wage increase was equivalent to 13,110 yen ($95) per month, up 5,680 yen from the previous year, according to preliminary data from the Japan Business Federation, also known as Keidanren.

Ideas:

Major Japanese companies increasing wages by an average of 3.91 percent is a very good strategy to keep good talent and get new talent as young workers are looking for the best possible combination of wages, benefits, and wor/life balance.

Unfortunately most likely not enough small and medium sized businesses could afford to match what the major companies did and most wage earners in Japan probably don't work for the major companies.

But even at 13,111 yen per month increase is it going to be enough to overcome the increased inflation and allow worker to spend some of it in the economy.

Article:

The increase was larger than 2.27 percent the year earlier and the sharpest since 1992, when the average wage grew by 4.78 percent.

Japan has been grappling with soaring prices due largely to rising import costs following a weak yen and Russia's war on Ukraine.

Consumer inflation in Japan accelerated to 3.0 percent in fiscal 2022 through March, the fastest pace in 41 years, according to government data.

Ideas:

Its very possible the 3.91 percent increase might not be enough, over the long term to solve Japan deflation challenges and or increase consumer spending and consumer demand in the economy overall. 

What might happen is there might be an increase in the inequality level if small and medium sized companies haven't been able to increase wages that much meaning the major companies workers might see good wages and of course benefits while the rest in the Japanese economy might fall behind.

Consumer inflation increased 3.91 percent but probably has been increasing each month meaning consumers/families have lived an increase in inflation for many months.

The increase in import prices can be attributed to the variance between the US dollar and th Japanese yen which is maybe the result of the BOJ strategy of keeping low interest rates while the US keep increasing the rate.

Article:

As prices of goods ranging from food to gasoline surge, Kishida has repeatedly asked businesses to raise wages at a pace that exceeds the inflation rate and help sustain the economy.

Companies are also under pressure to improve their wage levels to acquire global talent. Japan's wages are the lowest among the Group of Seven industrialized nations, according to data compiled by the Organization for Economic Cooperation and Development.

Ideas:

Again an increase of 3.91percent might be OK for some but maybe not OK for others in the Japanese economy. But its impossible to think companies, major companies, can solve all of the negatives in the econmy by just increasing wages. 

The Japanese governent and the Bank of Japan have to do their part in solving the inflation  challenge and not rely soley on companies to save the economy. 

Japan's work system and work culture is unique in the global economy and it will require more than an increase in wages to get global talent to Japan. Yes, an increase in wages will help but there has to be a change in mindset among Japanese companies if they want to get global talent to come to Japan. 

Article:

The average annual wage in Japan rose some 6 percent in 2021 from 1990 to $39,711, creating a sharp contrast with the United States, which saw a roughly 50 percent increase during the same period, the data showed.

The preliminary data compiled by Keidanren was calculated on the average wage change per labor union member at 92 companies in 15 different industries.

Ideas:

Its not fair to really compare apples and oranges and the Japan economy and work culture maybe benefitted from the lower wages for a while but yes, now wages need to increase not just to get global talent but to get the best talent in Japan too, as young Japanease workers want the best work/life balance, benfits and wages possible.

And yes, if the Japanese economy and industries want to compete globally, the need the best talent from anywhere in the world. But the trend recently has not been toward that kind of mindset thinking as many major companies might still be too insular or only thinking dometiscally and not globally.

But time will tell and maybe companies and the Japanese economy will become more opend to hiring global talent in the future as there seems to be a major labor shortatge in Japan.

Article:

All 15 industries except for steelmakers saw larger wage increases than last year, the data showed. Shipbuilders logged the biggest rise of 6.06 percent, followed by the machinery and metal industry's 5.01 percent and construction companies' 4.64 percent.

The lobby plans to release the final results of the survey in July.

Ideas:

Steelmakers and shipbuilding are labor intensive industries that might require a lot of training and also maybe many young Japanease workers don't want to work in such labor intensive jobs preferring to work in offic type jobs with good work/life benefits.

All four job types just mentiones, while good wage increases its possible again they are not going to get the best talent possible as the jobs are very labor intensive and might be considered below the mindset of a young Japanese college graduate.

However, not all Japanese go on to university as there might be enough Japanese young people willing to work in those kinds of Jobs. But then again maybe not as there is a labor shortage in Japan and these four jobs types felt they needed to increase wages just to get workers to work for them.

Have a nice day and be safe!

Japan Consumer Prices:

 Article Source: https://mainichi.jp/english/articles/20230519/p2g/00m/0bu/019000c

Article:

TOKYO (Kyodo) -- Inflation in Japan accelerated again in April, with core consumer prices rising 3.4 percent from a year earlier, as consumers took a fresh blow as food and durable goods prices jumped, government data showed Friday.

The rise in the core consumer price index, excluding volatile fresh food items, remained above the Bank of Japan's 2 percent target for the 13th consecutive month, putting further pressure on the central bank to tweak its ultralow rate policy. The key gauge of inflation gained 3.1 percent in March.

Ideas:

A 3.4 percent increase in prices might not seem like much but prices have been increasing steadly over the past 13 months which means its not just the 3.4 percent increase but multitudes of price increases.

By now the average consumer might be thinking when is this going to end as prices just keep increasing in Japan. 

And maybe some or many consumers are beginning to cut-back on what they buy and unfortunately might buy some food that might not be a good because of lower prices.

The 2 percent rate of the BOJ might never be reached as it all about consumer spending and consumer demand and if inflation goes as it it, consumer spending might be where it should be.

Article:

Core-core CPI, which strips away energy and fresh food prices, climbed 4.1 percent, the highest since September 1981, providing evidence that inflationary pressure is persisting, data from the Ministry of Internal Affairs and Communications showed.

Among notable gainers, food prices rose at the fastest pace in nearly 47 years, up 9.0 percent. Durable goods prices leaped 9.8 percent.

Energy prices fell 4.4 percent, with kerosene, gasoline and electricity bills pushed lower by government subsidies that drove core CPI down by around 1 percentage point.

Ideas:

Unfortunately the lower income groups have the most challenges with inflation and food prices and they spend more porportionally on food than higher income groups. 

But in this case maybe even the average income groups in Japan are now feeling the food price increases and maybe are beginning to pick and choose what they want and need becuase of the 9.0 price increase.

A 9.0 price increase might not affect many consumers but there might be enough that consumer spending on some foods might not be as high if there weren't any inflation related to food prices. 

Once inflation starts its like a mutlipier affect, it begins to affect many products in many sectors. 

Article:

"Public perceptions that prices won't increase are changing," said Shinichiro Kobayashi, a senior economist at Mitsubishi UFJ Research and Consulting.

"Up to now, consumers have accepted price hikes partly because of savings accumulated during the COVID-19 pandemic. But this may be reaching a breaking point, with more price hikes planned, including for electricity," he added.

In a fresh sign of broadening price increases, service prices gained 1.7 percent, the fastest rise in 28 years when the effects of past consumption tax hikes are excluded.

Ideas:

Public perceptions are not always what they seem and sometimes they might not know or accept what is really happening.

In this case maybe because of de-flation, Japanese consumers haven't felt or seen inflation affecting them until recently in Japan. 

But as inflation continues to increase maybe many Japanese consumers are finally to feel and see the affects of inflation in their lives.

Maybe during the pandemic Japanese consumers didn't spend a lot and were able to save a lot but not that the pandemic has ended maybe now they are out and about spending as much as possible.

But yes, there might be a breaking point where consumers begin to feel inflation affecting their incomes and savings.

Article:

Rising prices for everyday goods are already hurting consumer sentiment, but private consumption remains resilient because of pent-up demand, especially for services following the lifting of COVID-19 restrictions, economists said.

The BOJ believes the pace of gains in the inflation rate, pushed up for months by surging import costs for energy and raw materials, will start to slow later this year.

Major utilities are planning to raise electricity prices in June, though the hikes will be less aggressive than initially envisaged.

Ideas:

Consumer sentiment has never been that strong in Japan because of maybe low wage growth and as prices continue to increase it might continue to be challenged.

Yes, pent-up demand might be driving cosumer spending at this time, but as prices continue to increase consumer spending might begin to decrease some as consumers begin to cutback be of inflation.

The BOJ has been saying, right or wrong, that inflation will slow but it hasn't slowed much or decreased much recently.

The price increses with servies is a different category as maybe because of the pandemic and loss of sales and revenue during the pandemic servies-type businesses are increasing prices to makeup for the loss of profits and revenue during the panemic.

Even a slight increase in elecrticity prices, as this point, might be too much for some consumers as they will have to cut-back on some purchases on some items in the future.

Article:

The BOJ expects core CPI to rise 1.8 percent in the current business year from April, with core-core CPI forecast to increase 2.5 percent. The central bank has not budged over its stance of retaining monetary easing to create an environment in which price hikes are accompanied by strong wage growth.

Toru Suehiro, chief economist at Daiwa Securities, said food prices will continue rising but the pace of inflation will likely slow.

Ideas:

Strong wage growth might be a lantent variable, meaning wage increases might not affect the economy immediately has it might take some time for wage earners to see and feel the wage increases and then decide just what do with their extra income from the wage increases.

At this point even small increases in food prices might still be too much for some as food prices have continued to increase and its not just a one time increase but many months of increases. There is a definite multiplier affect as prices keep increasing one upon another over time.

The BOJ has staked its reputation on keeping monetary easing low and it they were to reverse course at this time, it might seem like they have admitted they were wrong all along on their policy.

Article:

"It's hard to expect core CPI will rise 4 percent again," after climbing 4.0 percent and 4.2 percent last December and in January, respectively, Suehiro added.

According to research firm Teikoku Databank, over 30,000 food items could see price increases in 2023.

Ideas:

Yes, core CPI might not increase 4.2 percent or even 4.0 percent but maybe 3 percent or even 2 percent. But the problem is inflation has increase steadily over the past 2 years and has compounded the affects on consumers over time.

Consumers in 2023, of course will need to pick and choose what they need and what they want and mabye have to choose subsitutes or different food items if their favorite or usual  foods have become to expensive over the past two years.

If wage increases, for some or many beging to take an affect on the economy, perhaps inflation might begin to not have that much of an affect on the economy and consumer spending over time.

Have a nice day and be safe!

Japan Trade Deficit:

 Article Source: https://mainichi.jp/english/articles/20230518/p2g/00m/0bu/020000c

Article:

TOKYO (Kyodo) -- Japan's trade deficit nearly halved to a one-year low of 432.41 billion yen ($3 billion) in April, as imports dropped for the first time in 27 months on lower crude oil prices, while U.S.-bound auto shipments delivered record exports, the Finance Ministry said Thursday.

Surging energy imports kept resource-poor Japan deeply in the red, with a weaker yen inflating their value. For April, total imports fell 2.3 percent to 8.72 trillion yen, dragged down by crude oil and liquefied natural gas.

Ideas:

The trade deficit decreasing by half what it was before sounds like a good thing as maybe Japan is beginning to see the beginning of the end or it trending toward better conditions in the future.

The fact that US-bound auto shipments delivered record exports indicates the US market is not dead and the inflation situation is the US has not decreased the demand for Japanese cars.

The variance between the US dollar and the Japanese yen is always going to be a challenge for importers in Japan.

Article:

Exports, meanwhile, gained 2.6 percent to 8.29 trillion yen, the largest-ever for April. The increase came despite growing concerns about slowdowns in the U.S. and European economies.

Japan reported a trade deficit for the 21st straight month, underscoring its sensitivity to swings in commodity prices. The yen recovered some of the ground lost during its rapid deprecation last year but was still relatively weak against the U.S. dollar.

On average, the dollar traded at 132.23 yen, 7.6 percent higher than a year earlier. The total value of imported crude oil fell for the first time in over two years, down 25.0 percent to 883.0 billion yen.

Ideas:

Exports or exporting, while not a large part of Japan's overall GDP ,is still very significant as Japan is still a major export oriented country.

The fact that exports gained 2.6 in April just goes to shows exports are still vibrate and a large part of the economy.

But a trade deficit is always possibl as long as the variance between the US dollar and Japanese yen is wide enough to cause import prices to be higher than normal. 

Even though imported crude oil prices decreased they have a long way to go to get back to the normal range again.

Article:

Japan had a 794.83 billion yen trade surplus with the United States after exports gained 10.5 percent to 1.66 trillion yen while imports rose 1.0 percent to 862.09 billion yen.

With its major trading partner China, Japan logged a trade deficit of 460.88 billion yen. Imports gained 14.8 percent to 1.91 trillion yen, which compare with exports that fell 2.9 percent to 1.45 trillion yen.

"Auto exports have been recovering after they were affected by supply chain bottlenecks. So this is a bright spot in the export numbers that came at a time of slowdown concerns," said Chisato Oshiba, an economist at Dai-ichi Life Research Institute.

Ideas:

While China might be Japan's largest trading partner trade with the US is still strong and vibrant.

Hopefully trade with China will get back to full strength in the future and with all Asian economies such as South Korea too.

After two or three years, by now, major manufacturing companies should by now should know how to manage better their supply chains to that they can minimize any future disruptions that might happen.

Auto exports are always to going to be the major export product coming from Japan as its a major part of the manfacturing industry in Japan. 

With eight car companies in Japan manfacturing is still number one in Japan. 

Article:

"Going forward, however, we cannot be bullish because China's economic recovery is also slow. Crude oil prices have fallen after their earlier sharp gains but are expected to remain at elevated levels, which will blunt the fall in imports," Oshiba added.

In the January-March quarter, Japan's economy rebounded from a technical recession as private consumption remained resilient. But exports marked the sharpest fall in about three years.

Ideas:

China and the Chinese economy has some major challenge at this time to work through after  two or three years of the pandemic. 

No doubt China is still a major export destination of Japanese products but maybe over time China can work through it challenges and economc activity can get back to normal, or somehat normal.

Private consumption or private spending might, at this time, be the lone bright spot in the Japaese economy as consumers might after two or three years just want to get out and do things despite the high inflation rate in Japan. 

Article:

Aggressive interest rate hikes in advanced economies, including the United States, have clouded the economic outlook. The Group of Seven nations remain vigilant against such uncertainty, despite the global economy showing resilience so far.

Japan's trade surplus with the rest of Asia, including China, more than halved to 297.87 billion yen while its deficit with the European Union came to 72.40 billion yen, down 62.2 percent from a year earlier.

Ideas:

Until the US and the EU solve their inflation challenges economic outlooke could remain clouded or unclear.

And yes, the global economy does seem to remain resilient at this time and will probably be somewhat resilent still in the future.

It's somewhat unclear about the ideas of "halved." Does that mean the trade surplus decrease by half or does it mean increased by half.

No matter which, trade for Japan is a major part of the overall economy and as such trade deficits and trade surpluses are always looked at very carefully with regard to the Japanese economy. 

The challenge of course if the global economy does go into a full-blown recesstion again like  during the pandemic how are Japanese export companies going to meet the challenge of a global recession again.

Have a nice day and be safe!