Japan Industrial Output: Updated October 13, 2024

 

Japan's industrial output in August falls 3.3% due to typhoon

Article Source:  https://mainichi.jp/english/articles/20240930/p2g/00m/0bu/009000c

Ideas:

There are always going to disruptions in production due to many factors, such the recent chip shortages, the logistics challenges during the pandemic, weather factors, the Toyota quality control situation, and many other factors.

The reading of 99.7 is still very good as you can't put too much stock in index numbers as there are many factors that go into an index number.

Summer and early fall it the typhoon season in Japan so weather is going to have affect on many different sectors in Japan. 

Fluctuating indecisively is a good way to describe the situation for the summer months, and all of the challenges Japan production has had since the pandemic with chip shortages, slow down related to the pandemic, the Toyota situation and quality control, the weather, and there are the usual shutdowns to to maintenance and repairs.

Yes, it is very difficult to exactly predict the future and have exact estimates about how much can be produced in the months ahead, as there are always going to be unsuspected challenges in the future.

Companies obviously should have built in periods for many of the factors that could cause delays in production and should not expect perfect production schedules and there just too many challenges can disrupt as schedule.

Again, typhoons are a major factor in Japan and always will be and should be part of the suggested flexible schedule that might be one many factors that can disrupt production.

Of the 15 industrial categories, 12 saw declines in output, which might be considered normal as again many factors can reduce output, especially during the summer and winter.

It would be interesting to see how many of the 15 industrial categories had contingency plans or flexible plans which allows for the unsuspected shutdowns throughout the year.

Not all of the categories or sectors are located in the same areas of Japan as maybe they are spread out all over Japan, and as such, maybe the typhoons, didn't affect a large affect on some categories.

Japan is a major producer of electronic parts and of course auto parts, so maybe those categories were not affected that much. And many of the parts producers, both electronic and auto, are not really related to any major Japanese company, as many of these companies are medium and small size companies.

And of course many of these mid-size and small companies are suppliers to the larger Japanese companies, and as an example, many of the companies were started by former large company employees, which the large company helped them step-up the supplier company.

The decrease in industrial shipments again could be typhoon related as ships could't get in or out due the inclement weather in Japan during the typhoon season.

The decrease in inventories too might have been related to a reduction of production days due the inclement weather in Japan. 

September is still the typhoon season in Japan and there is always the chance for more typhoons.

October is usually a more calmer month with almost no typhoon in October, so production should get back to the normal range.

Have a nice day!

Japan Food Price Increases: Update October 10, 2024.

 

Japan to face price hikes on 2,900 food items in Oct., most in 2024

Article Source: https://mainichi.jp/english/articles/20240930/p2g/00m/0bu/017000c

Ideas:

Japan, unfortunately, is a resource poor country and has to import much of what is needs, meaning its subject to global price increases on raw material products and subject to the weak Japanese yen which cause domestic prices to increase a lot.

You would think maybe the Japanese government would find ways, such as trade agreements, to help lower the price of many products going into Japan.

For a long time, many Japanese companies were reluctant to pass-on their increase costs to retail consumers as they were afraid of losing customers. But this is a new era and now many company easily pass-on their costs as they need to maintain their profits margins.

Increased logistic costs have been going up since the pandemic and these is no other real example than looking at airline ticket prices and the extra cost that airlines now charge customers.

Labor costs is very much different a wage increases have increased, due to the Japanese government urging many companies to increase wages and of course companies will pass-on their labor costs to the next in the supply chain including the final retail customer.

Recently, unfortunately, there have been reports of some companies going out of business because they couldn't afford the increased wage increases and or at the same time could find enough labor for their company, as again, they couldn't afford to pay what workers want or need.

Labor costs, most likely are going to continue to increase, which means more companies pass-on their labor costs to whomever in the supply chain, which means more price increases in Japan for the time being.

Maybe if Japanese companies had been increasing wages consistently over the years, there would not be this crisis on price increases now in Japan.

You can't blame the weak Japanese yen for all of Japan's ills as again, if companies had been increasing wages consistently, instead of all deciding around the year 2000 not to increase wages, there would not be the current wage increase crisis and price increases on products.

This is a situation, again, the could have been avoided if Japanese companies would have just increased wages consistently and not tried to avoid wage increases as many Japanese companies tried to do back in 2000, as they were following the leader, which at the time was Toyota which Toyota decided not to increase wages at the time, and the it just continued on on since then, until 2023 when many companies, due to the Japanese governments urging decided to increase wages again.

Have a nice day!

Japan Job Changes: Updated September 26, 2024

More middle-aged job changers in Japan switching to startups; improved wages a factor

Article Source:  https://mainichi.jp/english/articles/20240924/p2a/00m/0bu/024000c

Ideas:

It could be sign that Japanese workers are looking for something different and not just the same 9 to 6 type job, as startups might give them more a sense of accomplishment and or maybe even a better work-life experience.

At the same time, the 40-plus group usually is focused on job security and of course income and they might have been in their present job for many years. So, again, it says something, if true, that this group has decided they need something different or better in their lives and for their families.

While the 20 to 39 age group might still be focused on the large Japanese company job, and they might feel somewhat satisfied with their job, at this point.

Even though the article says there was a 3.1 percent increase it really doesn't mean that much as it doesn't talk about the actual number of job changers.

If the article is true, it seems job seekers are looking for better salaries and jumping to startups who seem to be offering a better salary despite the risks of working for a new company like a startup.

It will be interesting to see if these so-called startups will be in business 5 or even 10 years from now, as sometimes don't make it more than 5 years.

If these salaries are true and correct, the large name-brand companies might have competition and might need to think about offering similar salaries to keep their best talent who might be thinking of leaving for as startup.

Is this trend for Japanese startups, usually in the tech sector to compete with companies in the US or even India who are looking for global talent everywhere.

The idea that young workers at startups work too hard might be similar to what is happening in Silicon valley in the US where the work and hours are just too much and too hard, but the young workers seem to like it as they get paid generously.

But at the same time, many companies are looking at the work-life balance situation as many workers are tired of just chasing a good salary and want something better for themselves and their families.

Japanese companies trying to copy what the Silicon Valley startups do might not be the best choice for Japan, as the work culture is very much different, even though some Japanese companies require their workers to work long hours similar to what companies do in Silicon Valley.

Startups, globally, are always going to be have some labor shortages, as most workers are looking for stability and not just a  good salary as startups can be very risky, as most don't last more than 5 or 10 years, which might detract some workers.

But at the same time, if the Japanese government has programs in place with generous subsidies for startups, that might be enough to entice some to join a startup.

And yes, startup companies need to be as transparent as possible to appeal to workers who might think startups are too risky and I need a more stable work situation.

Have a nice day!

Bank of Japan View: Updated September 25 2024

 

Bank of Japan keeps rates on hold, Ueda tempers another hike speculation

Article source:  https://mainichi.jp/english/articles/20240920/p2g/00m/0bu/022000c

Ideas:

The Bank of Japan, usually is very conservative and doesn't want to upset the financial markets with any kind of action. Do no harm is a good way to describe how they do things compared to the US Federal Reserve, which increased the key rate a lot, which had a lot of side affects on the US economy, even though it might have helped to bring down inflation.

The Bank of Japan most likely is not going to increase the rate this fall, as they are watching the Japanese economy very carefully to see if it can get back on track and all economic indicators it watches are in line.

But if they do increase the rate, it might be no more than 0.25 percent like in July, as they don't want any real side affects that might cause harm to the Japanese economy.

The weak Japanese yen, maybe more than inflation is the real challenge for the Bank of Japan. But at the same time there are positives for a weak yen that can't be ignored and or course there are real negatives.

So the Bank of Japan has a find a balance between the positives and negatives of the weak Japanese yen. 

Does the Bank of Japan continue with the weak yen or continue to let it be weak, as it helps Japanese exporters, and Japanese overseas investors, and it helps foreign tourists, as they can buy more in Japan.

But it hurts importers and the weak Japanese yen increases import prices, so the Bank of Japan has to decide what is best for the Japanese economy overall.

Most likely the rate increase is going to be the first month of the new year, but you never know as it could be in December if the Japanese economy improves enough for the Bank of Japan.

The Japanese economy just doesn't increase or grow that much, as maybe be described as stagnant for a very long time. So the Bank of li Japan has to be concerned about if and when the Japanese economy can get back to some kind of normalcy or sustained growth, even if the growth is only 1 percent.

The weak Japanese yen is causing some havoc among some sectors in the Japanese economy, but at the same time is a boom for some in the Japanese economy too. 

Ask the hotels, restaurants, department stores and so on who mainly cater to foreign tourists if they like the weak Japanese yen. 

Financial markets, globally, are just too sensitive about everything, and never take a long term view or a big picture view, as they only think about now and not tomorrow or next week or next month, or next year.

Many years, ago, for example, Japanese companies could make long term plans and if they had a not so good quarter it was not the end of the world as they were focused on the long time and not what happened in one specific quarter.

But these days, because more large Japanese companies have significant shareholders, and shareholders only care about today and don't see things long term, and as a result, many Japanese companies have scrapped long term plans and focus on quarter to quarter to please the shareholders.

Markets remain in a unstable position, not so much about what the BOJ has done but because, again, they are just too sensitive about everything, They are like "snow-flakes", and react to everything they don't like.

But the BOJ is in a no-win situation as anything they do the markets are going to react, whether some good for Japanese economy or something not so good, the financial markets don't care, they just want things their way, even though the BOJ tries to improves things.

Again, the BOJ seems to be more sensitive to the markets that the US Federal Reserve, who seems to be a little more detached from the markets while the BOJ seems to want to keep the markets calm more than the Federal Reserve.

The Bank of Japan doesn't really have any room to cut its rate as its rate is almost at zero or 0.25 percent, so it must increase the key rate to try and get Japanese yen back to where the US key rate is or the EU central bank is or the where the Bank of England is, but its going to take more rate increase, for example to reach the US rate of 3 to 5 percent or percentage points.

The BOJ has a long way to go, and remains to be seen how long, if ever, the BOJ will get the Japanese rate in line with other advanced economies, or if they even want to do it.

It take several years, if even that for the Japanese rate to be equal with the other advanced rates, but the BOJ just not want the rate to be equal, as the weak Japanese yen might have more positives for the Japanese economy than negatives as this time.

Again, the weak Japanese yen, has both positives and negatives, and yes, the BOJ might be leaning toward keeping the yen weak, but it might try to tweak it some to help importers ad inflation related to the weak Japanese yen, and have a more balances Japanese yen, if that is even possible.

The weak Japanese yen has brought to Japan record foreign tourists and the weak yen gives them more purchasing power, and of course helps the hotels, restaurants, and even the Japanese convenience stores where many foreign tourists go to.

So the BOJ of course sees all of this, but at the same time, there is a significant segment of the Japanese economy who never see foreign tourists or get any of the business, so the weak Japanese yen might not be good for them.

So, again, the BOJ has to find a balance that helps those who never see any business from foreign tourists, but feel the affects of the weak Japanese yen, and the record number or tourists that help many Japanese businesses in Japan.

Of course the Bank of Japan is going to say its concerned about the weak Japanese yen, but at the same time it knows, it helps a significant segment of the Japanese economy too.

The Bank of Japan is always going to say what it needs to say, and again, to appease the financial markets so that they don't get too upset about what they say or do.

Yes, inflation, for many in the Japanese economy is not good and should be controlled, as much as possible, bu there are just too many variables acting at the same time, for any central bank to control, especially the Bank of Japan.

The Bank of Japan might not do anything until the LDP election is finished as they don't want to interfere with anything that might have an affect on the election. 

Even though it ended it negative rate policy in March, don't expect the BOJ to follow what other central banks do as they seem have their own strategies for how to manage and economy.

Even during the pandemic and after it really follow what the US Fed did as whenever the US Fed does something, the other central banks seems to follow.

Have a nice day!

Japan Trade Deficit in August: Updated September 24, 2024.

 

Japan logs 695.3 bil. yen trade deficit in Aug. on weak yen

Article Source:  https://mainichi.jp/english/articles/20240918/p2g/00m/0bu/014000c

Ideas:

Japan likes to think its an exporter oriented country, and record exports show it, but the trade deficit overshadows its exported oriented focus, as the weak yen as continued keep import prices higher than normal.

Not only does the weak yen affect import prices and importers, but the overall domestic economy, as businesses and Japanese households feel and see the increase in prices every month.

Not say anything bad about the Bank of Japan, but they seem to be taking a hands off approach to the weak yen and the inflation situation, and just letting the Japanese economy with inflation run its course.

Japan, for a while, was really not in the game related to semiconductors chips but now it trying to get back into the game and trying to improve its market share as Taiwan and South Korea, have most of the market share in semiconductors.

The shrinking of the trade balance is a good sign that the Japanese economy might be improving moderately, using the term the Bank of Japan likes to use.

But there is no room for optimism, maybe a little, as the Japanese economy has been stagnant for a long time, with a lot of ups and downs, but still despite the ups and downs, a very staple economy, as the ups and downs might be 1 percent up and 1 percent down, but not much beyond that.

There are positives and negatives related to a weak yen, as it helps exporters and overseas profits but increases import prices too.

The weak yen is a boom for foreign tourists traveling to Japan, as they have more buying power or purchasing power, and can buy more things in Japan, which then is good for the Japanese domestic economy, and Japanese hotels and other businesses gain from tourists buying a lot.

So the Bank of Japan needs to balance out what is best for the Japanese economy, with  Japanese exporters and overseas investors seeing the profits increase, but at the same time importers lose out with increased higher import prices, and the overall Japanese economy, losing out with the weak Japanese yen.

The Japanese trade deficit also affects the Japanese current account, which is like a country's bank account, as the trade deficit reduces the amount of the current account. 

But exports and overseas Japanese investors increase the Japanese current account, so the again, the Bank of Japan needs to be careful or find a good balance for all activities related to the Japanese economy.

The global economy always goes through business cycles, like any economy, as right now, it might be in a slight downward cycle but as always it will bounce back and move in the right direction.

Its good that Japan has a trade surplus with the US, but at the same time it needs to keep focusing on other markets and not just the US. But of course, if trade continues to be positive with the US, why not put more resources into trade with the US, especially if trade with China is not where it should be at this time.

And again even though trade with the US was only 1.2 percent that is still a good number considering the volume of trade between the US and Japan.

The US economy might be the strongest in the world at this time, but that doesn't mean Japan should neglect or focus about its other trade partners and especially Japan should continue to trade with China, as its a large economy and eventually it will turn around.

Again, continue to trade/export to China, as China is going through some internal economic challenges at this time, and eventually they will sort things out.

China is just too big an economy to ignore and Japanese companies, as much as possible, should continue to do business in Japan, even if they are losing money, at the present time, as in the future and now, the Chinese middle class it just too large to ignore so they have a lot of money to spend.

That's to say if a Japanese economy is losing market share to Chinese companies and they just can't continue on, then its good to exit the Chinese market.

Asia, including South Korea, is both positive and negative, as Asian economies are a mixed bag at this time time, but, again, Japan should continue do to business with these economies has they have large middle classes with a lot of money to spend.

The EU is a different story as it seems to have it own stagnation challenges and maybe the Ukraine war situation is affecting the EU and or demand for Japanese products its just not there at this time.

Have a nice day!

Japan and Foreign Visitors: Updated September 25, 2024.

 

Number of foreign visitors to Japan tops 2.9 mil., record for August

Article https://mainichi.jp/english/articles/20240918/p2g/00m/0na/050000c

Ideas:

Japan is seeing record numbers of foreign visitors but it has a way to go before it has the same number as Spain of France. 

But to be fair, location might be a challenge, even with improve travel as Spain and France have a big advantage related to location.

Yes, China and the rest of Asia of Asia has a huge population, but there might be travel limitations for some.

There might be some political issue between China and Japan which might be limiting some Chinese travelers as they were the largest group to travel to Japan in 2019 before the pandemic.

It looks like China has regained the top spot for foreign travelers to Japan, as they might have resolved any flight challenges which was affecting travel to Japan.

And regarding the political issues, it seems Chinese travelers have forgotten about the Chinese ban of Japanese seafood imports, as most likely many/most Chinese are eating Japanese seafood in Japan now.

South Korea is a another country with some historical issues with Japan, but it seems like the weak Japanese yen is enough to persuade many South Korean tourists to travel to Japan.

Some might say, in Japan, there are now too many foreign visitors, but tell that to the hotels, restaurants, and other places that lost a lot during the pandemic when Japan was closed off during the pandemic.

The weak Japanese yen has of course been a challenge for Japanese travelers has they have to fight inflation  and also weak Japanese yen when they travel overseas.

Gone are the days, maybe, when hordes of Japanese would travel to Hawaii and other places in the 80's and 90's.

Japan has always been on the side of caution, and sometimes maybe too much, but better safe than something else.

And also it might be because of the 3/11 Fukushima earthquake and tsunami that Japan has become even more cautious and maybe for good reasons.

All of the cancellations because of the quake warning should be enough to remember what happened during the pandemic when the country was closed off and many businesses went out of business and it took many months for the economy to get back to some kind of normalcy. 

Have a nice day!

Japan Economic View: Update September 21, 2024

 

Japan retains economic view in Sept., optimistic for corporate sector

https://mainichi.jp/english/articles/20240918/p2g/00m/0bu/055000c

Ideas:

The Japanese economy might be improving with the corporate sector showing improvement, but again, as always, the weak link of the Japanese economy is consumer spending, and yes, the hot summer weather might weaken spending during the hot summer months.

And of course the typhoon/hurricane season in Japan, prevents consumers/people from traveling, which the summer months are prime travel time.

Consumer spending has always been the weak link for the Japanese economy, as Japanese consumers/households just don't spend that much as they are mostly savers and not spenders like in the US.

For the most part, like any economy, there regions with strong economic activities and those less economic activities. For example spending in the Tokyo is always going to be good but for the rural areas maybe not so good.

Real wage growth might have improved the overall economy, but it must be remembered, that not all wage earners in Japan got the wage increases that large Japanese company workers got.

There might have been a modest rebound, but again, if all Japanese workers could have gotten the 5 plus increase of large company workers,  consumer spending might have been even more.

Not all sectors are the same, as some improve while some slow down, and some decrease, depending on economic conditions.

Unfortunately, bankruptcies might continue in Japan as there are continued labor shortages and inflation, which makes materials prices too much for some and some companies unable to hire new workers, and or they can't afford to pay for wage increases, which means workers will leave and find new work with higher wages.

But unfortunately that is the nature of a market economy, with some companies doing good, but some companies not able to do much, and eventually have to leave the market.

Have a nice day

BOJ Ideas: Ideas Later; Updated September 18, 2024.

 

BOJ should raise policy rate to 'at least around 1%': board member

Article Source:  https://mainichi.jp/english/articles/20240912/p2g/00m/0bu/020000c

Ideas;

There is no guarantee that a interest rate increase of 1 percent will have any affect on inflation, as maybe 1 percent will have no affect on businesses or households.

But there is always the psychological effect where any rate increase can get businesses and households to think about getting a loan.

The bank of Japan might or might not increase rate this fall, but if the weak Japanese yen continues to be weak, the BOJ might increase the rate to decrease the variance between the US rate and the Japan rate.

The short-term rates as still quite accommodative for businesses and households as rates are still low enough to not be too much of a stress, but if rates continue in the future, the rates could begin to affect loans from businesses and Japanese households.

Again, there is no economic evidence that rate hikes can or will reduce inflation, but central banks continue to use the rate as a strategy to lower inflation.

The 2 percent inflation goal is more about consumer demand and consumer spending and not about companies passing-on their costs to the next in the supply chain.

The Bank of Japan has had a long time to try and improve the Japanese economy, but whether good or not good, the BOJ hasn't been able to do much related to inflation or the weak Japanese yen.

The Japanese government has known for a long time there are labor shortages, or that there was going to be labor shortages. Its a very complicated situation, but if the retirement age was more like the US, where there is no age limit, there might be a less of a labor shortage as older workers continue to work if they want.

And then there is the idea of immigration and allowing more foreign workers in Japan. Its different than the US, but the idea is the same where more foreign labor improves the economy overall.

How the financial markets react, to anything, not just what the BOJ does, as the financial markets stability will help decide what the BOJ does.

The BOJ might make a move in the fall but it might wait for the weather to cool down and the typhoon season to fade away so that the Japanese economy can get back to some normalcy.

Again, if there are non-normal activity in the Japanese economy during the fall, the BOJ will again wait to again get some normalcy.

There are many factors to be considered related to the Japanese economy and the US and the overall global factors. However, if the BOJ is too much swayed by all that is happening, it needs to focus on what are the most important factors not every variable.

Japan's GDP might be improving but its a long way from being constantly improving. Wages have improved but more wage growth is needed in Japan for consumers to feel better and begin to spend consistently again.

Again, the BOJ might make a more this fall and it might not be that big of a move as they don't want to increase the rate too much too soon. Maybe in 2025 or 2026 they might begin to get the policy in-line with the US and the EU.

Even if inflation and the Japanese economy does align with BOJ expectations, they might not increase the rate very much or not at all, if the financial markets are not stable or  become very unstable this fall.

The BOJ has always been very conservative compared to what the US Federal Reserve and the EU central bank has done in recent years.

But they might be changing to try, again, to get more in-line with the US and the EU.

Have a nice day!

Japan Current Account for July: Update September 13, 2024.

 

Japan logs record surplus for July on foreign investment returns

Article Source:  https://mainichi.jp/english/articles/20240909/p2g/00m/0bu/012000c

Ideas:

A country's current account is like a bank account, as foreign investments and exports add to the current account, while imports decrease the current account.

Of course there are positives and negatives to the current account, but Japan, like many economies, not all, need the current account to be positive to pay for its high debt to GDP ratio, which is the highest among advanced economies.

The weak yen has helped with the surplus in overseas investments, but the weak yen has its negatives too, as it increases import prices, which reduced the current account.

The Bank of Japan, while worried about the weak yen and import prices has to balance out what is happening, as the current account surplus seems good for Japan, while the weak yen drives up import prices and hurts the domestic economy.

And then there is the idea of foreign tourists and the weak yen, which give them more buying power in Japan to buy more when they travel to Japan.

So the Bank of Japan has to be very careful, and balance out the needs of the domestic economy, the needs of Japanese investors in foreign countries, the needs of Japanese exporters, and the needs of foreign tourists who spend a lot in Japan.

Japan is a resource poor country, and always has to import much of what it needs, and as imports exceeded exports, the current account had a deficit, which for some countries might be a  challenge, and for Japan, it might be challenge as it has a debt to GDP ratio among the highest if not the highest among advanced countries.

Japan, for a sometime, has been behind Taiwan and South Korea in the global semiconductor race, as they are now trying to catch up or at leas get back into to the game.

Communication devices might be Samsung smartphones and or Apply I phones, which both have strong market share in Japan.

It seems like, maybe not so, but Japanese smartphone makers have given up and just aren't making any waves in the global market, for example in the EU or the US.

Japan has a way to go to be a global player in the foreign tourist market, but its making a strong push to get there, but of course its not near France or Spain in the number of foreign tourists just yet.

There is always the ideas about airline ticket prices, as maybe they have come down related to what they were before and just after the pandemic.

While there was surge of 41.9 percent in July, there are some who might think Japan now has too many foreign tourists, but tell that to all of the shops and businesses, and hotels who cater to foreign tourists and their spending money in Japan.

For some things, such as the services trade, Japan will continue to have a deficit as it to pay for digital services related to streaming and online ads. 

Of course some might say Google and Amazon, and YouTube  so on make too much relate to adds and streaming, and maybe even they are out of control, as the prices for add and so just keep going up.

Japan always focuses on the current account while the US might not give it much attention, as they always run a trade deficit as the US is a major import country, and the trade deficit doesn't seem to matter much to them.

Have a nice day!

Japan University Students and Food Costs: Updated September 13, 2024.

 

Half of Japan univ. students cut food spending as 98% feel prices too high: survey

Article Source:  https://mainichi.jp/english/articles/20240907/p2a/00m/0bu/014000c

Ideas:

University students, globally, have challenges related to food costs, as for most of them, they have limited budgets and just can't spend like they have full-time jobs like other people.

As inflation continues on in Japan, its not a surprise that university students are challenged, just like low-income or fixed income groups have the same challenges with food costs. 

Not everyone can go to a nice restaurant for lunch or even dinner, as maybe in Japan, many students visit convenience stores a lot for the low-priced ramen, or sushi rolls, or something like that.

Spending 10,000 to 29,000 each month or even 30,000 to 49,000 each month doesn't go very far, and again, maybe many students have to visit convenience stores for their lunch or dinner. So over 60 percent of university students in Japan are challenged financially.

At the same time, not sure why, but whenever I visit a Japanese convenience store in Japan, I never see Japanese university students working there, only foreign students working at the convenience stores.

So what is going on? Do Japanese university students have part-time jobs but none of them seem to be working at Japanese convenience stores.

The list above related to what students cut back on is interesting, but food seems to be the most common item students cut back on at 51.0%.

You would think clothing and fashion, at 36.4% would be higher but maybe students need or want to look fashionable even though it might hurt their budget.

And eating out was only at 30.6% so maybe they need or want to continue to eat out with their friends.

And even more surprising was entertainment and hobbies was only at 19.8% percent for cutting back on expenses, which again might mean something or nothing at all.

Not all students save or cutback on the same thing, just like in the economy, households and families have different priorities that they cut back on, and no family or household is the same, and its the same with students, as not all students are the same.

Students, like families or households in Japan can't be stereotyped into one group or another other than they all have money challenges, and they have different priorities on what they like or don't like, or what they need or don't need.

But, like all students globally, they all have budget challenges and they cut back on what feel and need to do, as some might decrease spending on food, while some might decrease spending on fashion and clothes, while some might decrease spending on entertainment.

Prices are always going to be different in urban areas and rural areas, and that is a global situation, and not just in Japan, but even different urban areas might have different price levels, as the prices in one urban area might be completely different than the prices in another urban area.

Its the same with everyone else and not just students, as people feel and see the different prices in different areas, and not just students.

Everyone wants lower prices and not want to pay for the higher prices, at least most people. But of course there are always to going to some who want to go to the most expensive places to show off but, of course that has not to do with this article.

Have a nice day!

Japan April-June GDP: Updated September 11, 2024.

 

Japan's April-June GDP growth revised down to annualized real 2.9%

Article Source:  https://mainichi.jp/english/articles/20240909/p2g/00m/0bu/010000c

Ideas:

There are always going to be revisions as new data comes to light, so going from 3.1 to 2.9 is not that much of a real different in what happened in the Japanese economy.

An annualized growth means if the economy stayed the same it would grow that much, but economies, especially the Japanese economy, is never the same from quarter to quarter.

Private consumption or consumer spending is never where is should be in Japan, as the average Japanese household just doesn't spend like the US household or maybe even the EU household.

Capital spending by companies is often based on what they feel about the future of the economy, and most likely the average Japanese company might be a little weary about the future of the Japanese economy.

GDP, especially Japan's GDP is never where it should be and hasn't been there for a very long. Most advanced economies don't grow that much, except for the US economy, as even a 0.7 percent or even 0.8 percent, while low, is about the norm these days for the Japanese economy.

Even capital investment, at 0.9 or 0.8 percent is still low, but the norm for the Japanese economy, as it seems it just doesn't grow that much.

Japan has the 4th largest economy in the world, so even at 0.7 or 0.8 its still growing but of course at a much lower rate. 

Private consumption or consumer spending is never where it should be in Japan, as Japanese consumers just aren't the big spenders like US consumers.

Japanese consumers, due to inflation, the hot weather, or other factors, are cutting back or just waiting for the summer heat to change and they will get back outside and go to different places.

The Japanese economy might be recovering at a moderate pace, but, as usual,  the Bank of Japan uses the same phrase over and over to describe the Japanese economy.

The Bank of Japan, most likely, is not going to increase its key rate anytime, but it might do it in late October or early November, as it wants to see how the Japanese economy is continuing to improve and if the financial markets are stable, after some rocky times during early August.

Yes, the Japanese economy might be recovering moderately, but that is about as positive and the Bank of Japan or others might say, as there is much chance or a sudden shift or explosion of growth in the economy.

Sluggish spending, during the current summer months, might be due to the extreme heat in Japan at this time, as anytime the temperature gets above 35 C consumers refrain from spending, as it just too hot to go out and do things.

And yes, as its the typhoon season in Japan, it might delay or cause some families to refrain from traveling in Japan. And then add in the government advisory about the potential earthquake situation, more travelers might have changed plans about traveling.

Yes, growth in real wages, due to the wage increases in April might help some with consumer spending, but so far, there hasn't been a big surge in spending, as again, the summer heat and the typhoon season, might be limiting some consumer spending in Japan.

Exports in Japan is a major economic driver, as even though services are the biggest part of the Japanese economy, Japanese exports are still a key economic driver, which increases economic growth.

The Japanese car scandal related to testing irregularities seems to have passed as the Japanese auto industry seems to be back on track to help grow the Japanese economy.

Nominal GDP is really not that important as real GDP is really what drives and economy, as nominal is just but GDP and inflation.

And the same with nominal GDP, as it includes inflation, as inflation continues to be a major factor in the Japanese economy since the pandemic.

Finally, the Japanese economy, while a very stable in economy, just doesn't grow that much, but that just might be the nature of advanced economies globally as they don't grow that much, as even a 0.8 or 0.9 that might be all the Japanese economy is going to do for a while, until maybe there is a major paradigm shift in economic growth. 

Have a nice day! 

Japan Real Wages: Updated September 9, 2024.

 

Japan's real wages rise 0.4% in July, up for 2nd month on bonuses

Article Source:   https://mainichi.jp/english/articles/20240905/p2g/00m/0bu/017000c

Ideas:
Real wages are important as nominal wages include inflation, but at 0.4 percent that's not much of an increase.

If 1,000 Japanese were surveyed, they might say their wages haven't grown that much even though some might have gotten a wage increase.

It must be remembered, that maybe 70 percent of Japanese workers don't work for the large name-brand companies but small and midsize companies, and most likely, they didn't get the 5+ percent increase that large company workers got in April.

But something it better than nothing for wage increases, but at the same time, does the wage increase cover the inflation that continues in Japan.

Bonuses are traditionally a part of Japanese company culture, and most Japanese workers can probably expect some kind of bonus in the summer and and in December.

Of course not all companies pay the same bonus as of course the large companies pay the most while small and midsize companies of course pay much less.

Overtime might be down, as the Japanese government is trying to get companies to limit overtime as a way to improve the work life balance of Japanese workers.

Most likely, in years past, companies didn't give a lot of bonuses as the Japanese economy just wasn't that strong and was/is stagnant, and so companies seeing the economic environment as not that good decide not to give bonuses or they reduced the amount of bonuses in previous years.

Yes, as wage increases take affect they might begin to level off as the summer wears on with high summer temperatures, and the typhoon season having an affect on the Japanese economy.

Even though it was the so-called Bon season, or summer holiday season in Japan, there might not be that much activity due, again, the high summer heat and the typhoon season having some kind of affect on the Japanese economy.

Again, it must be remembered that not all Japanese workers work for the large name-brand companies, as it been reported that up to 70 percent of Japanese workers work for small and midsize companies, which means they might not have gotten the 5+ percent wage increase that the large company workers got.

And then there are the contract workers and part-time workers, which make up a significant number of workers in Japan, as like globally, more and more economies are using contract and part-time workers only to reduce costs, and they didn't get the same wage increase.

Not all workers in Japan get the 529,266 nominal wages, as many Japanese worker don't even get near that amount. 

That might be a reason why only 6% of Japanese workers are engaged or enthusiastic about their work in Japan, as they are either unhappy or just going though the motions at their company.

But its a global situation, and has been for sometime as workers globally, are just tired of their work and want to change but can't see or find something they really want to do, so they just go through the motions at their workplace and hope for 5 or 6 to come quickly so they can go home.

Have a nice day!