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