Japan to Improve Economy: Updated Nov. 28, 2023

 

Japan PM vows to begin outlining new economic steps next week

Article Source: https://mainichi.jp/english/articles/20230921/p2g/00m/0bu/024000c

Article:

NEW YORK (Kyodo) -- Prime Minister Fumio Kishida pledged Wednesday to begin outlining early next week the pillars of a new economic stimulus package that he described as "drastic," as Japan's economy has shown few signs of achieving a sustainable growth path.

At a press conference during the U.N. General Assembly in New York, Kishida said fresh economic measures would include steps to respond to sharp price hikes, promote wage and investment growth, and mitigate the adverse effects of a declining population.

Ideas:

Perhaps part of Japan's challenge for economic growth is once an economy reaches the advanced state as an economy, it becomes more difficult to grow as much as it did before.

For example 1, 2 percent growth might be good for Japan, in its current state, but that might be challenging if the economy doesn't innovate or makes certain changes.

The biggest challenge is the declining population with Japan's low birthrate. But at the present time, Japan doesn't seem to be interested in significant increases in foreigners working in Japan, which might help with economic growth.

And then too improving the work lives of Japanese working women who are underutilized in the Japanese economy.

Article:

Kishida added his government is aiming to finalize the package by the end of October and submit a draft supplementary budget to fund it to parliament "in a timely manner" under the new Cabinet.

"Under the new administration, we will address issues that cannot be postponed," Kishida said.

Ideas:

Many prime ministers such Abe and his abenomics too tried to revitalize the Japanese economy with limited success. What Abe did which helped the economy was open up tourism in Japan which has brought in a lot of tourists which spent a lot of money in Japan.

But besides that not much are really improve in Japan for a while, despite the effort of former Japanese prime ministers.

The Bank of Japan too, has tried many things to help the economy but not much has had any significant sustainable results recently.

Article:

The government said earlier this month that Japan's economy grew an annualized real 4.8 percent in April to June, revised down from 6.0 percent reported earlier, hurt by sluggish capital spending and private consumption.

The world's third-biggest economy expanded for the third straight quarter. Analysts, however, have warned that the state of the economy is not as good as the headline figure indicated, amid the relative weakness of domestic demand.

Ideas:

Annualized growth is not real growth as its just an estimation of what growth might be if all things were equal for the rest of the year, which they often never are.

So for the April to June quarter economic or GDP growth might have been 1.2 percent, which for Japan would be good and many times Japan's economic growth is under 1 percent.

Capital spending is always dependent on what companies see and feel about the future economy. If they see things getting better they tend to spend more, if they see things not so good they might refrain from capital spending for the time being.

Domestic demand is always a challenge for the Japanese economy, and now as inflation continues on in Japan, Japanese households might cutting back on their extra income spending and only spend what they need or want.

But the real challenge might be Japan is now a super-aged society and older people tend to spend less than the younger people. And also if many younger workers are contract or part-time workers they don't have enough extra income to contribute to the economy.

Article:

Consumer sentiment has been worsening due largely to an upturn in global energy and food prices, triggered by Russia's invasion of Ukraine, which was launched in February 2022.

As for Japan's release of treated radioactive water from the Fukushima nuclear power plant, crippled by a massive earthquake and tsunami in March 2011, Kishida said he will continue explaining the safety of the discharge to the international community.

Ideas:

Consumer sentiment in Japan can be very challenging as households see their incomes decreased by inflation and they don't have extra income left to spend in the economy.

Wage increases, while good for big companies, didn't cover about 70+ percent of workers in Japan, which means many households and individuals didn't get wage increases in the spring.

The Fukushima situation is more political, or so it seems, and countries like South Korea and China might be using the situation to their advantage.

But China, and its banning of a all seafood from that area and all of Japan, might be too much and too political as Chinese tourists still come to Japan and eat Japanese sushi with more problems.

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Beijing has criticized Tokyo for disposing of "nuclear-contaminated water" in the Pacific Ocean, imposing a blanket ban on Japanese seafood imports immediately after the release began on Aug. 24.

Kishida said his government has been eager to "maintain close communication at all levels" with China to jointly tackle common challenges, urging Beijing to take "responsible" actions.

But he added that nothing had been decided regarding whether he will hold a summit with Chinese President Xi Jinping by the end of the year.

Ideas:

Tokyo and China, and even with South Korea, are always a tricky political situation and must be managed very carefully with the correct posture and language from both sides, in communications between China and Japan and Japan and South Korea.

Again, Chinese tourists, like tourists anywhere, when they travel to Japan, or anywhere they don't think about politics or what is going on they just want to spend their time in Japan, for example and go shopping, eat sushi, and enjoy their vacation time.

Have a nice day and be safe!