Japan's Jobless Rate: Updated Feb. 11, 2024.

 

Japan's jobless rate falls to 2.5% in October

Article Source: https://mainichi.jp/english/articles/20231201/p2g/00m/0bu/018000c

Article:

TOKYO (Kyodo) -- Japan's unemployment rate fell to 2.5 percent in October from 2.6 percent a month earlier, improving for the second consecutive month, as the number of job seekers declined with more people finding employment or giving up looking for work, the internal affairs ministry said Friday.

The job availability ratio edged up 0.01 point from September to 1.30, indicating there were 130 job openings for every 100 job seekers, also reflecting the decline in people looking for work, according to separate data.

Among new job openings in October, the accommodation and food services sector rose 2.2 percent from a year earlier on the back of a recovery in inbound tourism, according to the Ministry of Health, Labor and Welfare.

Ideas:
Japan's unemployment rate has always been one of the lowest among advanced economies. An increase from 2.5 to 2.6 is not much of a change or variation. 

Perhaps more people might have given up looking for work, which is not unusual even in Japan as people lose hope trying to find a good job. 

And at the same time, maybe more people found work that suited them and the number changed.

For might be 130 jobs for every 100 job seekers, but what kind of jobs are being offered. Unfortunately, even in Japan, the trend is more contract work and more part-time work and not as many regular fulltime jobs.

The services sector was hit hard by the pandemic and maybe just now beginning get back t some kind of normal or new normal.

Article:

Employment in the manufacturing and construction sectors, however, declined 10.6 percent and 6.2 percent, respectively, with high material prices increasing costs.

"Japan's labor market in general has been on a tightening trend amid labor shortages, as the economy continues to recover from the coronavirus pandemic," said Saisuke Sakai, a senior economist at Mizuho Research & Technologies.

He also noted that the service sector continues to seek more workers with the number of inbound tourists, except those from China, recovering to pre-pandemic levels.

Ideas:

Manufacturing and construction, while good paying jobs, might not be the type of jobs many young workers are looking for these days, as they look for jobs that meet their work/life expectations.

And at the same time, as material costs increase, maybe they can't hire any more workers at this time.

Japan is definitely facing a major labor shortage at this time, But Japan is not using is human resources to its fullest, as working women are not given the same salaries as men, and women with children might be looked down on and maybe are not considered management candidates.

Also Japan is beginning to see the need and importance of foreign workers but also they are still reluctant to fully open their economy for foreign workers.

The services sector lost a lot of jobs during the pandemic, and many workers to lost their jobs have moved on and haven't returned to the same service sector jobs.

But many service sector jobs, such a hotels, might not be the liking of young Japanese workers as maybe the hours are long and the pay is not as good as other jobs.

Article:

The total number of people with jobs fell 0.1 percent from the previous month to a seasonally adjusted 67.49 million, while the number of unemployed people stood at 1.75 million, down 1.1 percent from the previous month, data from the Ministry of Internal Affairs and Communications showed.

Among them, 770,000 people voluntarily left their jobs, up 1.3 percent, while 370,000 people left employment due to other reasons, such as dismissal or retirement, down 2.6 percent from the previous month.

Ideas:

Among the 770.00 people who voluntarily left their jobs, did they leave their jobs for personal reasons, or maybe they just didn't like the work they were doing.

An economy's workforce is never static but dynamic meaning its always changing, as people leave, people are dismissed, people retire and so on.

Again, the trend in Japan and many advanced economies, is many companies are hiring more contract workers and part-time workers as opposed to fulltime workers, of course to save money and save spending less on benefits

And at the same time, many young workers today, in every advanced economy, are looking for better work/life situations and not the hours, especially in Japan, that their parents had to work, which was/is six days a week and longer hours each day. 

Some companies are waking up to this fact, and to get the best talent possible are now beginning to offer better work/life situations with better working hours, better benefits and ever better chances for promotion to management.

Article:

The unemployment rate stood at 2.6 percent for men, down 0.2 point from the previous month, while the rate for women increased 0.2 point to 2.5 percent as more women entered the labor market, the internal affairs ministry explained.

The number of people in the accommodation and food service sector stood at 4.08 million in October, up 4.6 percent from a year earlier and marking the biggest gain among the surveyed sectors, while 10.53 million people were employed in manufacturing, unchanged from a year earlier.

Ideas:
The unemployment numbers as stated really don't mean much as 2.5 or 2.6 is not that big a difference. For women, as they enter the workforce, the numbers can change as now they are counted in the workforce as before, they were not counted in the workforce,

The inflation situation, is forcing more women to seek employment as now a one income family just can't make it.

Again the services sector was it hard by the pandemic and probably lost more jobs than other sectors, and now they are trying to makeup for the lost workers.

At the same time, as more foreign tourists enter Japan the accommodation sector is looking for more workers. 

But the problem, again, is maybe many young Japanese workers don't want to work at hotels and the hours might be long, and the pay might be less than what large Japanese companies pay.

When I would stay at Toyoko Inn in Yokohama, I would often see Chinese workers at the hotels, as there are many Chinese tourists and maybe the hotel can't find Japanese workers to work there.

Also, when I would to to a convenience store in Japan, I would see mostly foreign students working there and not young Japanese working there. Also, the few times I would go to MacDonald's in the morning, the workers there were older Japanese and not young Japanese as they maybe don't like the work and or the hours.

Have a nice day and be safe!

Japanese Company Capital Spending: Updated Feb. 10, 2024.

 

Japan firms step up spending by 3.4% in July-Sept., growth slows

Article Source: https://mainichi.jp/english/articles/20231201/p2g/00m/0bu/020000c

Article:

TOKYO (Kyodo) -- Capital spending by Japanese companies from July to September increased 3.4 percent from a year earlier for the 10th straight quarter of gain, but growth slowed further in a worrying sign for the economy, Finance Ministry data showed Friday.

Investment by all nonfinancial sectors for purposes such as building factories and adding equipment totaled 12.41 trillion yen ($84 billion). Capital spending is a key gauge of domestic demand.

The slowing pace of increase from the 4.5 percent in April-June adds a layer of uncertainty to the outlook, despite many firms planning to ramp up spending for the current fiscal year to next March as the shocks of COVID-19 and supply disruptions ease.

Ideas:

Capital spending is never linear, meaning that it doesn't happen every week, every month, or even every quarter, as companies choose certain times a year to spend.

Just because capital spending might have slowed down doesn't mean the economy is getting worse, as companies, again, sometimes wait for a specific date or month to spend on capital investments.

And yes, there might be some companies, due to market conditions, might decide not to spend in this fiscal year, ending in March 2024, but instead wait unit April 2024 to begin their capital spending.

Article:

Transport equipment makers and chemicals firms ramped up investment to boost their output capacity, while service providers also increased spending.

Pretax profits rose 20.1 percent to 23.80 trillion yen, a record for the quarter, helped by the weaker yen, according to the ministry data.

"Companies have bullish capital spending plans (for the current fiscal year) but the actual numbers suggest they remain cautious," said Yuichi Kodama, chief economist at Meiji Yasuda Research Institute.

Ideas:

Most companies are cautious, and if an economic or market situation is not in their favor, they might wait to spend.

However, there are some companies, despite the market conditions not being favorable, or the economy not being favorable, think its the best time to spend and then when situations become favorable they are in a better position to take advantage of the market.

Service companies, capital spending is a little tricky and or unclear as what might be capital spending might be operations spending, and for service companies the definitions can become blurred.

For example, is remolding the inside of a department store an operational expense or is it a capital expense?

Article:

"This is because of weakness in the Chinese economy and the lingering impact of parts shortages. Companies are also short on labor, which is negative when they want to boost investment and raise output," Kodama said.

The capital spending figure will be used to revise gross domestic product data for the same period, which will be released next Friday.

Japan's economy shrank by an annualized real 2.1 percent in the July-September period, marking the first contraction in three quarters, hurt by weak capital spending and private consumption.

Ideas:

The weakness with the Chinese economy, of course, is causing concerns for Japanese companies who might need to upgrade their capital situation, such as equipment investments, building investments and so, but because of the uncertainty with the Chinese economy, they might be waiting to see what is going to happen.

Japan's economy, in annualized terms, might have decreased 2.1 percent, but that is an estimation for the rest of the year, if conditions remain the same, which it never does. 

Its a one time look at the Japanese economy and the next quarter could be completely different, with improved economic growth.

Private consumption or private spending, is always a challenge as Japanese consumers don't spend like US consumers. 

Private spending might be 50% of Japan's GDP or maybe a little more at 60% but that is still lower than consumer spending in the US.

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Kodama expects the GDP figure to be revised upward, though the economy still marked negative growth.

Weakening domestic demand has raised concern about the economy, which has been underpinned by catch-up demand following the removal of anti-COVID-19 curbs.

"The data shows that Japan's economy is recovering moderately," a ministry official said. "We will pay attention to the impact of a slowdown in the global economy and inflation on firms."

Ideas:

In one situation there is weak domestic demand and in another situation the Japan economy is recovering moderately, So which is it exactly, weak or recovering moderately, or a situation where its both. 

If you look at the US economy, its the bright light right now for the global economy, as economic growth is up, inflation is down to 2 percent, and jobs are being added at record numbers.

Of course that can't be said about Europe and especially Germany, which has its own domestic challenges.

And not to forget about China and its domestic challenges, which Japanese companies are heavily invested in.

Article:

Sales grew 5.0 percent to 367.74 trillion yen, up for the 10th straight quarter.

It came despite the manufacturing sector reporting its first drop in two quarters. Demand fell for personal computers and smartphones, and overall external demand also weakened amid aggressive rate hikes in major economies to fight inflation and a slowdown in China.

As automakers continued to benefit from the easing of parts shortages, the transport sector was a major winner in terms of sales and pretax profit growth.

Ideas:

Sales growth is always good, but at the same time what about operational expenses such as energy costs and raw materials costs.

Manufacturing, as had been mentioned in many article, has had periods of slowdowns due to supply chain challenges, such as the Toyota group of companies.

Demand might have decreased for personal computers and smartphones, but are these Japanese computers and Japanese smartphones or are the products from overseas being sold in Japan such as at Yodobashi Camera, a major electronics store in Japan. 

At Yodobashi Camera, they a complete floor of Apple computers and Apple I phones, which is the most popular products in Japan.

Despite the Toyota group having some challenges, it seems that Japanese automakers are headed in the right direction, with sales up in most of the eight major Japanese automakers.

Article:

Food companies that have been able to pass on increased costs to consumers also reported increased profits.

Rising prices of everyday goods, however, have dampened consumer sentiment and the government has compiled fresh inflation relief measures to ease their pain by cutting fuel costs and seeking to boost disposable income through tax cuts and cash payouts.

The ministry surveyed 32,557 companies capitalized at 10 million yen or more for the quarter, of which 22,920, or 70.4 percent, responded.

Ideas:

For many years, if not decades Japanese food companies were reluctant or even afraid to pass on their increased costs to the customer for fear of losing significant customers.

But now they have no choice as their profit margins have continued to shrink and they need to pass on their costs to stay in business.

Of course the prices of everyday good, including supermarket goods continue to increase and Japan is a resource-poor country, and has to import much of what it needs.

At at the same time consumer sentiment, or how consumers feel, continues to get worse, and its not surprising that they maybe pick and choose what they only need and not buy other products they might want.

Cutting fuel costs is good but is it enough? It might help with home energy costs and gasoline prices, but will it increase the needed disposable income for Japanese families, which might save the relief measures which might have helped instead of spending the extra disposable income in the economy. 

Have a nice day and be safe!

Japanese Government Wage Subsidies: Updated Feb. 8, 2024

 

Japan gov't mulls subsidizing wages for staff working less hours to care for kids under 2

Article Source: https://mainichi.jp/english/articles/20231129/p2a/00m/0bu/035000c

Article:

TOKYO -- Japan's labor ministry is considering subsidizing 10% of wages for those who work shorter hours to care for children under 2 years old, and aims to introduce the system from fiscal 2025.

The grant amount was set based on wages for shorter hours so as not to exceed what they would earn if working full time, to ensure fairness with other staff. Following discussions between labor and management, the plan will be included in a draft amendment to the Employment Insurance Act to be submitted to next year's ordinary Diet session.

Ideas:

This might be a good idea, as work/life balance, especially for families is not so good in Japan. The challenge will be will working women or even working men, take advantage of the subsidy, as Japanese workers are often reluctant to take time off.

And will companies allow workers to take time off, even if allowed by law will companies put pressure on workers to keep working.

Even at 10% of wages, it might not be enough of an incentive for some workers to take time off. It all depends on the relationship between workers and the company. 

It must be considered, for those without families or children, will think or feel they are not getting a fair deal having to work.

Article:

The "child care shortened working hours benefit," which is still tentatively named, will be established under employment insurance. Eligible workers would be those who are covered by employment insurance and whose income has dropped because they chose to work shorter hours to raise children under the age of 2.

According to a survey by the Ministry of Health, Labor and Welfare, half of all full-time female employees either use or had used shorter working hour systems for child care. Since wages tend to be lower with that work style compared to full-time employment, the subsidy program aims to support their livelihoods.

Ideas:

Even if the program is passed, as usual, it might not be what the original idea was/is as there are always negotiations between the different parties on government.

And unfortunately, The number of female executives in Japan is very low and its not surprising as there are few women in management positions in Japan. 

Because it might take a long time, and many many hurdles for working women in Japan to move into management positions, maybe many don't even try. 

But there are a few like to new JAL women president, who moved steadily up the ladder to eventually become the first female president of Japan Airlines. 

Article:

On the other hand, there are concerns that this may encourage "mommy track," in which employees who choose to work shorter hours may slide down the career ladder. For this reason, the government intends to keep the level of subsidies low and ensure that the system does not impede career development.

The creation of such benefits is part of the government's efforts to address the declining birth rate, and was included in the "Children's Future Strategy Policy" approved by the Cabinet in June.

Ideas:

Yes, this is definitely a possibility as the "mommy track" women might be labeled as not future management candidates.

The Japanese government might try to keep the level of subsidies low, but maybe once a women is labeled in the "mommy track" it might be hard to get rid of the label in a company.

Giving subsidies for working women who want to have children might not be enough to address Japan's low birthrate.

Young women, today, especially in Japan South Korea, don't want to have children, as raising children has become too costly, with increased education costs, such as after school programs as specialized academies to help students keep up with their peers.  

There is no easy solution for both countries as the birth rate in both countries are the lowest in OECD countries.

Have a nice day and be safe!

Toyota Output: Updated Feb. 7, 2024.

 

Toyota logs record Oct. output, sales despite production halt

Article Source: https://mainichi.jp/english/articles/20231129/p2g/00m/0bu/020000c

Article:

NAGOYA (Kyodo) -- Toyota Motor Corp. said Wednesday its global output and sales hit record highs for October on robust demand in North America and Europe, despite a temporary production halt in Japan due to an explosion at a parts supplier's factory.

The automaker made 900,285 cars worldwide in the month, up 16.7 percent from a year earlier, and sold 890,241 vehicles globally, up 7.0 percent, the company said.

The pace of production picked up amid an easing semiconductor shortage, and its production outside of Japan increased 8.7 percent to 617,590 cars, an all-time high for a single month, it said.

Ideas:
Japanese car production is an economic driver for the Japanese economy, meaning, as a major export it helps the Japanese economy grow.

At the same time, a car company like Toyota probably has thousands of subcontractors who provide any number of auto parts and services, that also increases jobs and economic growth.

It needs to be understood, unfortunately, that large companies like Toyota can and might wield its economic power, market power, with maybe not so good parts prices for suppliers, Most likely it doesn't happen but its always a possibility.

It seems like maybe the semiconductor shortage is finally passed. Back in 2020, in a BBC article a German car CEO said the shortage could last a few years.

Article:

Domestic production jumped 39.2 percent to 282,695 units, even as the company halted some production lines in Japan for 10 days during the month after an explosion at a factory belonging to Chuo Spring Co. in the city of Toyota, Aichi Prefecture.

Toyota said a production ramp-up on the back of the improvement in the chip crunch made up for the output loss, which was caused by a suspension spring shortage resulting from the explosion.

Helping the rise in global sales was a 5.2 percent growth in sales outside of Japan to 756,245 units, also a record high for the month.

Ideas:

Production companies, car companies, are always experiencing plant shutdowns related to parts shortages, supply challenges, and plant equipment problems. The trick is do companies plan for the stoppages and can they get back on schedule without too much downtime. 

Japan needs, and most likely being worked on, Japanese suppliers to provide semiconductors too, as though Japanese companies don't have to rely on Taiwan or South Korea for their supplies.

Unfortunately, Japan has fallen behind in the production of semiconductor chips but with an agreement with Taiwan they are building new semiconductor plants in Japan. 

Even at 5.2 percent growth in sales outside Japan, Toyota is probably seeing improve profits as the weak yen makes sales outside of Japan increase.

Article:

Sales of hybrid cars were notably strong in North America and Europe, with models such as the RAV4 and Corolla particularly popular, the automaker said.

Domestic sales rose 17.8 percent to 133,996 vehicles, according to Toyota.

Global production at Japan's eight major carmakers, including Toyota, rose 12.2 percent in October from a year earlier to 2,371,355 units, as all of them except for Daihatsu Motor Co. reported year-on-year growth due to the improved supplies of semiconductors.

Ideas:
Improved supplies important for Japanese car makers, as they probably use thousands of suppliers related to their car production. As a result, the eight carmakers are a huge part of the Japanese economy, and of course provide thousands of jobs and many small supplier companies which again provide jobs to thousands of workers.

It interesting that Japan has eight major carmakers, while the US might have four only. It seems that maybe the Japanese car makers and Japan in general, is more about cooperation than competition. The same can be said about the Japanese airline industry, with two major airlines and a lot of low-cost or regional airlines that are related to the two major Japanese airlines.

At the same time, companies like Daihatsu, a subsidiary of the Toyota group, focuses on different cars, which makes small compact cars compared to the main Toyota company.  

Article:

Honda Motor Co.'s output increased 22.8 percent to 405,276 units as growth in the United States made up for a production drop in China, where it has been hit by stiff price competition. Nissan Motor Co. built 310,480 cars, up 4.3 percent, as it ramped up production in Britain.

Daihatsu saw its output fall 1.5 percent, coming short of the results last year, when it launched new models.

Ideas:

Japanese cars are sold globally and made in different countries globally. China maybe is experiencing many domestic challenges in its economy now. But China is now producing more EV cars than Japan and now might be the global leader in EV car production.

Daihatsu has had some internal issues which has forced them to shut production down for a while, and even in its overseas plants in Indonesia and India. 

Daihatsu, again is a subsidiary of the overall Toyota group, and Toyota has come under fire for the latest challenges at Daihatsu. 

Have a nice day and be safe!  

Japan Industrial Output: Updated Feb. 6, 2024

 

Japan's Oct. industrial output rises A1.0% on month

Article Source:  https://mainichi.jp/english/articles/20231130/p2g/00m/0bu/021000c

Article:

TOKYO (Kyodo) -- Japan's industrial output in October expanded 1.0 percent from the previous month, rising for the second consecutive month, supported by a recovery of memory chip production, government data showed Thursday.

The seasonally adjusted index of production at factories and mines stood at 104.6 against the 2020 base of 100, the Ministry of Economy, Trade and Industry said in a preliminary report. The rise followed an upwardly revised 0.5 percent increase in September.

The ministry maintained its basic assessment of industrial output since July, saying it "fluctuates indecisively."

Ideas:

It fluctuates indecisively" is most like a very good idea as with many indexes, there is usually not a linear straight line of continued growth. There are going to be stops and starts due to supply chain challenges among other things.

The memory chip production, was for many months, maybe even years, challenged due to supply problems, factory problems with covid, and so on.

A reading of 104.6 related to base of 100 really doesn't say that much other than maybe industrial production has improved recently.

The real test will be what is going to happen after one year, or one year of production that doesn't have any supply chain challenges, like the past few years.

Article:

Of the 15 sectors covered by the survey, 10 reported increased production while five logged declines.

Among the 10, electronic parts and devices contributed the most to the output increase in the month, up 6.6 percent, led by memory chips widely used in personal computers and smartphones.

A ministry official noted, however, that output of semiconductors remained relatively low over a three-month period.

Ideas:

The 15 sectors tat were covered in the survey, are like a market economy, in that there are always going to be some doing better than some others.

For 15 sectors to be positive in growth might not ever happen as some have excellent growth and some go through periods of challenges or even restructuring. 

Memory chips are used in almost everything electronic these days. Unfortunately, compared to Taiwan and South Korea, and maybe even China, now, Japan has fallen behind in the production of memory chips.

As competitive as Japan its not understood how Japan has fallen so far behind is such an important global commodity as memory chips.

But at the same time, sectors go through ups and downs, as new global players, competitors enter the market, such as Japanese ship building, which used to be the leader in building container ships, but now China and South Korea have overtaken Japan and Japan might not even be in the top 5 anymore.

Article:

Motor vehicles also contributed significantly to the overall production increase in October, rising 2.0 percent due to strong compact and mini vehicle output, data showed.

Meanwhile, an output disruption at domestic production lines of Toyota Motor Corp. in October affected overall motor vehicle output, with that of regular-sized cars dropping 4.0 percent, the official said.

Among the five sectors logging production declines, iron, steel and non-ferrous metals fell 1.1 percent, dragged down by special hot-rolled steel.

Ideas:

Japanese cars, produced in Japan, are an economic driver, meaning they significantly increase economic growth, as exports are usually very good to the US.

But at the same time, Toyota has recently had some supply challenges and sometimes has to shutdown it productions lines to correct any challenges and or fix supply challenges.

Japan car production is more than the normal regular-sized cars, as there is a strong component of compact and mini vehicle productions that are exports or produced in many Asian countries.

Again not all sectors improve or grow the same as some go through market challenges related to market demands, market supply challenges and so on.

Article:

Output of petroleum and coal products dropped 2.7 percent, with a relatively warm winter expected.

The index of industrial shipments climbed 0.2 percent to 103.6, up for the second straight month, while that of inventories rose 0.8 percent to 104.4 for the first increase in three months.

Ideas:

Weather always play an important part in an economy, such as cold and warm growing seasons, too much or not enough rain, and even warm winters which might affect the demand for oil and coal products.

And of course, for example Uniqlo, which always has a lot of heat tek products for winter buying, but it the winter in Japan has been relatively warm, it might mean shoppers might not buy as much in winter clothing as before.

The increase or decrease in inventories might mean that demand for some products are down and or demand for some products have exceeded estimates.

An increase of 0.2 percent is not that much to get excited about as its possible. the margin of error could revise the number up or down.

Article:

Based on a poll of manufacturers, the ministry expects production to decline 0.3 percent in November and expand 3.2 percent in December.

The ministry official said the government is continuing to keep a close eye on downside risks overseas as higher interest rates could dampen capital investment and consumption.

Ideas:

As normal, production is never linear, as there are months of positive growth and months of not so good growth. 

The key is not to focus on monthly numbers but to focus more on quarterly numbers and or yearly totals, which give a more clear pictures of what is happening.

In the US, even though interest rates are still high, the US Federal Reserve has said, as the US economy is now much stronger, and inflation is now only around 2 percent, they are going to reduce the key rate a few times starting in the spring.

The US economy seems to be, again, leading the advanced economies in growth, as many economies such as Germany and the EU seems to still be struggling. Not to mention China, which still has its own domestic challenges.

Have a nice day and be safe!