Japan Industrial Output: Updated Dec. 1, 2024.

 

Japan's industrial output in Oct. up 3.0% on back of chip equipment

Article Source:  https://mainichi.jp/english/articles/20241129/p2g/00m/0bu/005000c

Ideas:

Japan output is heavily influenced by its manufacturing sector, while some other economies seem to place less emphasis on it or they don't talk about it much, as these days most economies have transitioned to service sector economies.

At the same time, the Japanese economy is heavily influenced by its exporting sector too. While Japan is still the 4th largest economy in the world it focuses heavily on exports to grow its economy.

The industrial sector and the export sector might be considered one in the same as the industrial sector focuses on Japanese cars, and semiconductor parts these days, which are both large export products.

The phrase fluctuating "indecisively' indicates that industrial production is never linear, meaning it doesn't always grow in a linear fashion each month, as there are periods of stops and starts related to machinery breakdowns, machinery repair, material parts shortages which has been a major challenge for Japan's industrial sector since the pandemic.

The next two months could be some challenging months for Japan's industrial sector, especially December and the holiday and end of year period which is very important for companies in Japan.

As it happens every year at this time in December, Japanese society, including most companies will take the last week of December off along with the first few days of the new year in January, which means production might not have to full slot of days for production.

What the ministry might be talking about here is the Chinese situation, as China is in transition period at the moment and many Japanese companies, especially Japanese car companies are experiencing less sales than normal in Japan at this time.

As far at the US goes, demand for Japanese cars seem to be consistently strong as it might be the only export market for Japanese cars that is still strong, while the EU market might too be experiencing some down time as many EU economies are not seeing consistent growth at this time.

And as far as Japanese consumers go and price trends, Japanese households might be cutting back some as prices continue increases and households are only buying what they need and maybe looking for substitutes at lower prices now.

Japan has a strong sector in machinery that makes products for other countries and output for that kind of machinery is always in demand from Japan.

What is unique about Japan is not just the large companies that make products for machinery, but Japan has thousands of very small companies that make only one small part that is shipped all over the world too.

Its seems Japan has now become a major producer of chip making equipment to other countries such as Taiwan, China, South Korea, and of course the US.

The other side of the coin, though Japan is trying to catchup as it has lost market share in the production of semiconductor chips to Taiwan and South Korea which are one and two in semiconductor production.

Even the industrial production sector has many subsectors and they don't all grow at the same pace each month, as some might be up, as seen, as some might be down.

Japanese cars, motor vehicles might be considered, besides overall exports, a major economic driver for the Japanese economy, as it usually has strong growth, which helps significantly with economic growth in Japan.

And again, there are going to be sectors that grow each month and some that are always up and down each month, depending on overseas demand.

And again, industrial output is never linear, meaning always increasing, as there are many subsectors in the industrial sector and some always grow and some again, are always up and down depending on demand.

Inventories are tricky sector as if inventories start to grow too fast, it might mean companies didn't estimate demand correctly and or demand just want what they expected and now they have too much inventory in their warehouses just sitting there.

The opposite can been seen too, as if inventories are less than expected and or there is less inventory sitting that expected it might mean demand was again not estimated correctly and they underestimated what demand would be and now they have to play catchup to meet demand.

Have a nice day!

Japan Jobless Rate: Updated Dec. 7, 2024.

 

Japan's jobless rate rises to 2.5% in Oct. as seniors seek new posts

Article Source:   https://mainichi.jp/english/articles/20241129/p2g/00m/0bu/004000c

Ideas:
Most likely those without jobs at 1.8 percent might be related to some workers quitting their existing jobs and looking for other jobs as they might think its much easier to get a new job as Japan is facing as so-called labor shortage.

Those who reach retirement age in Japan, these days, most likely need or want to keep working if the company allows it which seems to be getting much more common in Japan now.

And or they leave their current jobs and maybe can easily find new work, full-time or part-time, as again, Japan has the larges labor shortage among all advanced countries.

Unfortunately Japan still has a mandatory retirement age of 65 or 70 depending on the company and sector. While in the US, there is no retirement age for most jobs and sectors, expect for a few.

So its not uncommon to see workers in their 70's and even 80's in the US, if they can do the job,and they remain healthy.

Those in Japan might have been contract workers on half year or full year contracts and of course they need to to look for new jobs if they were in a half year contract. 

It must be remembered that most likely those 125 jobs for every 100 job seekers might not be the large company jobs that everyone wants to have, as some might be small or midsize jobs that don't pay as much or as good as large company jobs.

And some, unfortunately, might be contract type jobs which don't pay full benefits or good salaries too.

So even though are a lot of jobs available that doesn't mean they are the large company jobs that, again, most workers would like to have.

Even though there were 8.9 percent more jobs offers in the academic and the technical service job areas, the trend in academia is moving toward more part-time or adjunct type work as universities, globally, are not hiring full time academics as they were 20 or even 30 years ago.

In the hotel and restaurant services area, most likely they have enough workers now as they might have filled any openings they had due to laying off many workers during the pandemic.

And or the possibility might be they can't afford to hire any more workers and their profits margins are just too slim and they already increased wages and hired a lot of workers and now, at the present time, don't need any new workers.

Have a nice day!

Japan Customer Harassment: Updated Dec.6, 2024.

 

Japan gov't wants companies to take measures against customer harassment

Article Source:  https://mainichi.jp/english/articles/20241122/p2a/00m/0bu/013000c

Ideas:

Japan has always been a country of quality customer service and the idea that the customer is like God was/is true in Japan. At the same time, even customers used to be polite as Japan is/was considered a polite society, at least from foreigners point of view.

But maybe those days are long gone as more and more customers in Japan are voicing their frustrations with companies and how they might be treating customers. And it might not even be the company's fault as it just might be all societies today, and now even in Japan, with people able to voice their frustrations on social media.

To be fair, if there are no penalties to how customers treat workers at a department store or at a insurance company, how can the harassment be stopped if it continues on in Japan.

Companies, out of fear of losing customers might not report any customer harassment, as they feel in today's climate of social media, customers can take out their frustrations on the company they don't like.

Unfortunately, due to other issues such as home issues, family issues, money issues, or psychological issues, it might be hard to determine if the customer had a real complaint and or was just acting on frustrations from something else.

But the fact remains, there has to be politeness from the customer and from the company to keep things from getting out of control.

This is where is gets completely out of control, expecting employees to kneel before the customers to apologize. Most likely, and it happens in Japan, some rich or well-to-do customers will act that way to show they are superior to a low level sales clerk in a Japanese department store.

Many of these actions might not be actually criminal but the punching, kicking is definitely a criminal act and if legislation is introduced even all of the other actions could be a criminal offense.

Its very sad that Japan, once known for its politeness has come down this kind of level in Japan society today, but again, its not only Japan but its global problem these days.

Some countermeasures might include if a customer is beginning to complain too much to a store clerk, for example, the store clerk can excuse herself and find a company employee who knows how to deal with those kinds of customers, as a department store clerk don't get paid enough to deal with customers who are rude.

Another example might be a specific room that customers can go to and voice their concerns and talk to someone who is experienced in dealing with customer complaints, as again, the regular staff is not trained or doesn't get paid enough to deal with rude customers.

Another example, if it comes to it get the help of the Japanese police who know how to handle extreme and or rude customers, but most likely the Japanese police with probably say its not their job, as the company should deal with it. 

And in that case, if complaints become too extreme, a company can hire trained security people to work with the store or company to handle rude or abusive customers

The problem with Japan is that many don't want to get involved if its not in their best interest and or they don't have a personal stake in the situation. There doesn't seem to be a sense of citizenship like in the US where people might get involved, but not so in Japan, even though its changing a little.

The paragraphs seems a little unclear, as before the article was about customers harassing clerks at departments stores, for example, but this paragraph makes it sound like company workers are doing the harassing.

But just the same, again, Japanese people, even companies don't want to get involved if its not in their best interest or doesn't involve them directly.

And to be clear, unfortunately, there are many companies, globally, that take advantage of customers and some customers have valid complaints. 

All countries should have as set of rules that protect both the customer and the company with clear examples of what not to do on both sides.

And, again, there needs to be some punishment for extreme customers who resort to violence, and even using social media to harm an individual working for a company too.

Yes, some Japanese government entities are now beginning to see there are some real challenges with customers harassing company workers and they are beginning to take some action, as needed.

The problem is will the government actions be enough to deter customers from harassing company workers. If there are no penalties then maybe nothing is going to really change.

At the same time society has to step-up and communicate what is appropriate behavior of both sides related to customers and companies both.

Have a nice day!

Editorial: Japan Stimulus: Updated Nov. 26, 2024.

 

Editorial: Will Japan's $142 bil. stimulus package raise people's standard of living?

Article Source:  https://mainichi.jp/english/articles/20241123/p2a/00m/0op/008000c

Ideas:

Not to complains or criticize but why are the high-income earners maybe getting handouts, when they really don't need them. But its seems it happens with every government, as governments have to makes compromises to get bills passed.

Most likely the subsidies are going to all people in Japan and not just one income group,which in itself is understandable but not efficient as its still government spending, which is increasing the government debt

The editorial is correct, the low-income population is the group that needs the most help with subsidies or other things, due to the constant increase of inflation in Japan.

Again its understandable if the handouts go to the elderly with income less than 1 million yen as maybe that's all they get from their pensions. 

At the same time, maybe its not fair to single out the elderly who do have other forms of savings and assets, but at the same time, those in real need such as the non-regular workers, need the most help as for whatever reason, they seem to almost be discriminated against as a non-regular worker in Japan.

The non-regular workers seem to be unable to find that coveted full-time job with a good company and or they can't get that job because of other circumstances, so they have to work as a non-regular worker.

The so-called ceiling needs to be increased as it was made 30 years ago, which prices were lower and the economy in Japan was much better.

Those workers who make just above the $6.650 ceiling are the one who are hurt the most because of the inflation as maybe their income barely pays for anything in Japan today, and then add in the income they have to pay and its gets even worse for them.

Maybe yes or maybe not, but Japan used to be a country that took care of its citizens, but those days have long gone, as maybe market capitalism and Japan moving toward western-style governance practices, some of Japan's population has been left behind.

Every little bit helps but maybe even at $11.500 it might be less than good as today in Japan inflation keeps increasing and $11,500 doesn't cover much and especially if they are a married couple, with children.

Of course there might be less revenue for the Japanese government but what is important, the welfare of its citizens or worrying about the government debt when up to now, it hasn't been a major issue.

If the current account continues to increase with Japanese exporters exporting a lot, and Japanese investors investing in overseas markets, and foreign tourists continue to go to Japan at record numbers, with the Japanese yen remaining weak,  that could increase the Japan  current account and help with the government shortfall if they do increase the ceiling.

Yes, the LDP is prioritizing keeping their minority government afloat, as that is a given, like with most governments trying to stay in power.

Yes, its important to boost the potential of the Japanese economy, but whatever has been tried recently or the past decade hasn't really worked, and the pandemic didn't help which set back to Japanese economy, which was at the time very weak. 

The challenges is maybe 70 percent of wage earners in Japan don't work for large Japanese companies that gave the largest wage increases while the small and mid-size companies didn't give large wage increases, which again, is not going to help wage earners get ahead of  the inflation situation.

It seems like despite the Japanese governments attempt to balance out the regions, everything seems to focus first on Tokyo and then maybe Osaka.

But its natural that companies want to be where other companies are and where the center of government is too.

The Japanese government, for many years, has tried to use subsidies to help the Japanese economy, as even last summers tax handout of 40,000 yen didn't go very far most Japanese citizens.

And the Japanese governments attempt to support the semiconductor industry might be a little too late but of course needed.

Taiwan and South Korea are years ahead of Japan and have most of the market share in the semiconductor industry.

The Japanese government is in difficult situation now with high government debt to GDP ratio as its the highest in the advanced world at this time.

So the Japanese government has to look at the debt and at the same time to help the Japanese citizens with huge inflation situation in Japan too.

The only good thing about the debt about the Japanese government debt is its internal and not external which was the case in 2010 with Greece where most of its debt was external and owned by many different countries including the European Central Bank, so most of Japan's debt, if not all of the government debt, is owned by Japan.

Have a nice day!

Japan Inflation Slows: Updated Nov. 25, 2024.

 

Japan inflation slows in Oct. for 2nd month on energy subsidies

Article Source: https://mainichi.jp/english/articles/20241122/p2g/00m/0bu/004000c

Ideas:
Inflation might be slowing but its still a challenge for many Japanese households. And the 2 percent target set by the Bank of Japan is just a number, as Japanese households don't care what the number is its just that its high. 

The energy subsidies are needed and good, but of course its government spending and Japan has one of the highest government debt to GDP ratio in the advanced world.

The challenge is the Japanese government has spent a lot since the pandemic to help the Japanese economy but all of the spending might be considered government debt, which just increases the debt to GDP ratio.

One of the main challenges in the Japanese economy is that Japan is a resource-poor country which means it has to import which of what is needs, and if prices are high overseas, most likely they will be high in Japan too, and importers will pass-on their high import costs to the next in the supply chain.

And then add in the weak Japanese yen which also increases import prices too, so there is another layer of price increases that the domestic Japanese economy has to deal with.

If and when the Bank of Japan increases the key interest rate, it will not be that much, as the BOJ is concerned about how it will affect the overall Japanese economy.

The Bank of Japan might increase the key rate to 0.50 points which is still way below the US rate of 5.0 points which means the variance between the key rate and the Japanese rate still going to be significant which means the Japanese yen most likely will continue to be weak.

Most likely the Japanese economy might grow one quarter and show an annualized growth of 1.0 or even 2.0 percent, but is that going to be enough for the Bank of Japan to increase its key rate in the future.

Energy prices continue to increase as Japan has to import much of the energy it needs as it doesn't make or produce any energy in Japan, as its subject to global energy prices.

In years or decades past, Japanese companies including Japanese farmers, might not have passed-on their increased costs to the next in the supply chain including the final customer, but those days are long gone as most or many Japanese companies feel they have no choice now as their profits margins continue to shrink.

Previous articles have suggest there was enough rice on hand to overcome any shortages, but the problem was not a rice shortage but the hording of rice due to the Japanese governments advisory related to the possible earthquake in August.

And as usual anytime there becomes a shortage, companies will increase the price of a product, and in this case in supermarkets either by rice producers or the supermarkets themselves increased the price.

Once again, Japanese companies these days are increasing prices, or passing-on their energy and material costs to the next in the supply chain including the final customer, as their profits margins are getting thinner and thinner.

The service sector was hit hard by the pandemic and many either had to close or laid off a significant number of workers.

And then add in the so-called labor shortage in Japan now, as many services companies might be competing for the best talent possible and they need to pay wages maybe much more that what they are able to do, but need to do.

As a result they might be increasing their prices as a way to keep their profit margins at a normal level or as normal as possible.

Have a nice day!

Japan Trade Deficit Shrinks: Updated Nov. 22, 2024.

Japan's trade deficit shrinks 34% in Oct. on chip equipment exports

Article Source: https://mainichi.jp/english/articles/20241120/p2g/00m/0bu/012000c

Ideas:

Japan is considered the 5th largest goods exporter after the China, the US, Germany, and the Netherlands according to one source, which means exporting and the trade is very important of the Japanese economy.

These days, maybe most advanced economies, and many economies are service and technology based, but goods exporting is still very important for most economies.

Chipmaking equipment has become important in Japan once again, as for a while it lost market share in the chipmaking category, and pharmaceutical products are gaining more importance every year as many advanced economies have become much older age wise and more people need the healthcare products which are produced globally.

Chipmaking equipment has become a global industry with now Taiwan, China, the US, South Korea, and Japan all vying for market share.

Exports increased 9.43 trillion yen while imports increased 9.89 trillion yen, which means Japan still has a slight trade deficit, which actually takes money out of the Japanese current account, while a trade surplus, put money into the current account.

To be more specific exports put money into the current account while imports take money out of the current account kind of like a country's bank account.

Its possible, because of the weak Japan yen, that the value of imports to Japan was slightly inflated meaning the prices might have been higher than normal because of the weak yen and of course because of inflation.

At the same time, exports too could have been inflated as the weak Japanese yen, actually increases the prices of Japanese products sold overseas, the weak Japanese yen is both a positive and a negative for the Japanese economy.

The Japanese trade deficit means the Japanese current account has less money in it, like a country's bank account, which means the Japanese economy and Japanese government has less money to use on for example reducing large debt to GDP ratio which is the highest among advanced economies, and or other programs such as the suggested handout or subsidy for lower income families in Japan.

The reason the Japanese yen is weak now is because of the variance between the US Federal Reserve key interest rate, which is around 5.0 points, while the Bank of Japan's key rate is almost at 0 or maybe 0.25 points which is a big difference between the two countries, which could be the main reason for the weak Japanese yen and the strong US dollar.

As long as the Japanese yen is weak compared to the US dollar Japan might continue to run a trade deficit, unless Japanese exports can improve with more demand from US consumers.

At the same time, japan needs some kind of Free Trade Agreement with the US as Japan imports much of what it needs from the US, and a trade agreement could potentially reduce the price of imports entering Japan maybe could reduce the affect of the weak yen some on imports too.

Japan is a resource-poor country, which means it has to import much of what it needs, and if the Japanese yen is weak and then add in inflation that makes imports for the Japanese domestic economy even mor expensive. 

Again, what Japan needs is some kind of Free Trade Agreement with the US to lesson the cost of imports to Japan.

And yes, the weak Japanese yen is a positive for Japanese investors in overseas markets as the weak Japanese yen increases the value of the investments when they are sent back to Japan. And the same with Japanese exports, as the weak yen against the US dollar increase the value, the price of Japanese products overseas and when brought back to Japan it increases the Japanese current account.

China seems to be going through some kind of transition since the pandemic and who knows exactly when it going to get better or when it can get back to some kind of normal or at least a new-normal for the Chinese economy.

The Chinese government's stimulus policies are needed but are they sustainable for the long term and can they jump start the Chinese economy back to strong growth.

Some have suggested China is headed for a Japanese style stagnation or at least China is not going to see the record growth it has seen for many decades.

Japan's trade surplus with the US will most likely continue, as Japan exports a lot to Japan as the demand for Japanese products in the US is still very strong, but also demand can go ups and downs so there will be periods of strong demand and periods of less strong demand from US consumers.

Japan continues to export, mainly Japanese cars, to countries in Asia, including China, but trade with China has lessoned recently due to less demand from Chinese consumers and companies.

The EU is a big mess at the present time and it seems many of the EU countries are experiencing less than good economic growth and including Great Britain, which of course left the EU some time ago., but who know when exactly when the EU will get back to some kind of strong economic growth including strong demand for Japanese products.

Have a nice day!

Japanese Women and Changing Jobs: Update Nov. 29, 2024.

5 times more women in Japan changed jobs in 2023 than 10 years earlier: report

Article Source: https://mainichi.jp/english/articles/20241118/p2a/00m/0bu/018000c

Ideas:
The work environment in 2013 was much different that today, in 2024, as women in Japan, relatively, have more options to choose from and not just a low-level clerks in some company, which is what it was for a long time in Japan.

All kinds of work skills are now seen as important including housework and raising children which both require a multitude of skills.

Most likely Japanese women are not satisfied with just being a low-level clerk and they seem more opportunities these days in many kinds of work.

There is also the idea that inflation is forcing many women to seek better jobs and maybe a low-level skilled job just doesn't pay that much along with idea that these days even if both husband and wife work it might be enough.

Maybe it became very apparent in Japan that women are a valuable resource to be utilized and companies are waking up to that fact along the idea of a so-called labor shortage has forced companies to see women as more valuable workers these days.

The real key in the future will be how many Japanese women are going to be in the upper levels of management of companies and again not just low-level clerks or even the bottom levels of management in a Japanese company.

Japan usually changes at a very slow pace, but every once in while there is a sudden synergistic change that does take place in Japan. This might be one of those synergistic changes that completely changes the work environment in Japan.

Again, most likely the current inflation situation in Japan, has forced the 40 something women to seek better work and better pay and maybe the jobs they had along with their husbands job just wasn't enough and especially if they had children,

Maybe too companies, because of the so-called labor shortage in Japan are re-thinking what are important skills out there that we need to be tapping into. So its better to be a good time for working women in Japan and they don't have to just be forced into low-level clerk type jobs.

Exactly, as companies are facing the severe labor shortage in Japan, they are waking up to the fact that there is a gold-mine of experience out there just waiting to be hired by companies.

Not to get too caried away here but it might be that women have more multitasking skills than men along with all their skills related to housework and raising children while men might just be one-dimensional while women are more multi-dimensional.

Maybe in years past, in Japan, women's self-esteem was much lower and they might have thought they didn't have any skills worth promoting,

But the world has changed significantly, and again, this might be one of those moments in Japan that is synergistic and will revolutionize the work environment in Japan in the future.

Japan companies and society is a facing a significant labor shortage. While increases in immigration of global skills into Japan is needed and important, its very slow process, and unfortunately, Japan is still unwilling to open the flood gates to global workers around the world. 

But, again, there is a gold mine within Japan just waiting to be utilized and just maybe Japanese companies are beginning to understand they have a potential workforce, in Japanese women, ready and willing to meet the needs of Japanese companies.

Have a nice day!

BOJ and Possible Rate Increase: Updated Nov, 28, 2024.

BOJ chief signals further rate hikes to prevent sharp inflation

Article Source: https://mainichi.jp/english/articles/20241118/p2g/00m/0bu/015000c

Ideas:

The Bank of Japan, until recently has erred on the side of caution, and has not increased the key rate, until last summer, as they have considered the Japanese economy too weak to increase rates. 

But there is now a new governor for the Bank of Japan who seems to be taking a different approach as the previous governor didn't increases rates for a very long time.

What the Bank of Japan is not going to do is signal any real rate increase as they now it might cause havoc in the financial markets, like what happened last summer.

If the Bank of Japan does increase the rate, it might not be that much, for example from 0.25 points to 0.50 might be about right as they don't want the key rate to have any side-affects for the Japanese economy.

In years pasts, the BOJ was very concerned about the possibility of side affects so they erred on the side of caution and didn't increase the rate at all.

But because of the variance between the US key rate and the Japan key rate, for example  the US at maybe 5.0 points and Japan at 0.25 points, the large variance might be causing the Japanese yen to be as weak as it is.

Maybe the Bank of Japan knows it needs keep ahead of the curve, and increase the rate just in case inflation does begin to increase too much, as again, in the past the BOJ felt the Japanese economy was just too weak to increase the rate.

Again, in years past, as the US and the EU were increasing the key rate to decrease inflation, the Bank of Japan was not increasing the key rate, and the variance between the US and the EU and Japan has reached a level that it might be affecting the Japanese yen which is very weak and causing import prices in Japan to be higher than usual.

But the BOJ has only increased the rate once or twice maybe since last spring, so maybe December might be the correct time finally increase the key rate again.

The US economy has remained relatively strong compared to the rest of the world, but there is always the chance of inflation creeping up again, along other developments depending on what the new US administration does in the future/

And unfortunately, there seems to be the possibility of a new trade war between China and the US which could affect the Japanese economy as Japan and China trade with each other a lot.

And unfortunately, politics being politics, the new US administration might try to undo what of what the previous US administration did after the pandemic and try to take credit for any positives related to the US economy.

And yes, the weak Japanese yen as definitely affected the domestic Japanese economy and import prices which affect many if not all Japanese households.

What the BOJ doesn't want to do is look like or be is a currency manipulator which potentially could affect Japan's future credit rating.

It must be noted that 70 percent of Japanese workers don't work for large Japanese companies, which got the largest wage increases while the rest might have gotten much smaller wage increases.

And yes, companies need to pay for the wage increases so they have increased prices, which of course affect all and not just the large company workers.

It should be noted that inflation is not really a bad situation, as an increase in inflation could signal an increase in demand, and in Japan, which has been under a deflation situation for a long time, it might indicate a positive note for the Japanese economy.

The Bank of Japan's target of 2 percent inflation is sometimes a little unclear as they seem to not want inflation to be above 2 percent or they want inflation to be lower than 2 percent, which is what most economies want.

Quite possible they might feel if inflation does get above 2 percent that is a good indication the Japanese economy is starting to move in the right direction as there is now more economic activity moving through the Japanese economy.

The Bank of Japan didn't increase the key rate for maybe 10 years, as the had an ultra-low policy which they felt was needed at the time to stimulate the economy, get companies and households to borrow more and get more spending in the Japanese economy.

But for whatever reason, including the pandemic. the Japanese economy has been stagnant for a very long time and never moved out of its stagnation phase.

And again, inflation is not necessarily bad, it could indicate more positive economic activity taking place, with more demand for products, more spending by companies and households, which are all needed to get the Japanese economy moving again., and not jus companies passing-on their labor, energy, and material costs the next in the supply chain.

Have a nice day!

Japan GDP Growth: Updated Nov. 21, 2024.

Japan's GDP grows 0.9% in July-Sept. on solid consumption

Article Source: https://mainichi.jp/english/articles/20241115/p2g/00m/0bu/010000c

Ideas:

For Japan, an increase 0.9 percent is very good, as Japan has challenges growing very much. And even a 2.2 percent quarter growth is still good too.

Consumer spending in Japan is always as challenge as the Japanese consumer doesn't spend like the US consumer as traditionally Japan is a country of savers and not conspicuous spenders.

Of course the one-off tax cut might have along with the normal summer bonuses which might have given some Japanese consumers to splurge some.

But at the same time, not all sectors in an economy grow at the same times as capital spending was somewhat sluggish, meaning Japanese businesses might have been a little weary about the future of the economy.

And then there is exports, which can be considered an economic driver for the Japanese economy, meaning exports usually provide a lot of growth.

Again, 0.2 percent might not sound like much but for the Japanese economy, that is a lot as it is usually stuck in the stagnation range.

And the same for private consumption or consumer spending at 0.9 percent which can be considered very good for the Japanese economy.

But the challenge is, as usual, can the Japanese economy keep the same numbers in the next few quarters or will it do what is usually does meaning a little growth and then back to stagnation or no growth.

Vehicle sales are usually not an everyday purchase so more Japanese need to buy new cars to have vehicles be an economic driver of economic growth.

Most likely there are always positives and negatives, even in a situation such as the hording of rice and other products in August after the earthquake scare, as people bought a lot which might have contributed to an increase in consumer spending in Japan.

The 40,000 so-called handout in June might too have helped with consumer spending, but not to be negative, 40,000 doesn't really go that far in Japan as inflation might have taken a lot of that.

As one person has suggested in the article, without the special positive factors, most likely Japanese consumers are going to go back to their usual ways of not spending due to high prices and will spend only what is needed.

The weak Japanese yen is both a positive and negative for the Japanese economy. For the domestic economy it is mostly a negative as the weak yen drives up import prices which affect most people in Japan. 

However its also a positive for the Japanese economy too, as the weak yen brings in record numbers of foreign tourists who spend a lot on Japanese hotels, restaurants, convenience stores, departments, and tourists places.

Its also a positive for Japanese exporters who get more for the products by selling them overseas as the weak Japanese yen, increases the prices of Japanese products. 

And then add in Japanese foreign investments who get more for their investments because of the weak Japanese yen.

The April bonuses by companies might have reduced the inflation situation somewhat in June and July, but inflation is not just a once a year situation, as prices increase every month, or so it seems in Japan recently, as seen with real wages decreasing again in September.

Capital investment is usually never monthly as companies might choose different times of the year, to invest, while the murky global economy might have been enough for Japanese manufacturers to cut back on manufacturing machinery.

But it must be remembered that, at the present time, the US economy is still the strongest in the world, and demand for Japanese products is still very robust.

Exports in Japan might be considered an economic driver. Anything that is considered an economic driver is some activity that significantly increases economic growth.

And yes foreign visitors, because of the weak Japanese yen,  makes travel and shopping much easier in Japan, and because there are now record numbers each month in Japan, it easily can now be considered driver of economic growth in Japan.

Overseas-made smartphones such as those from Apple, Samsung, and maybe one of the up and coming Chinese brands are very popular in Japan at this time.

As for example, if I go to Yodobashi Camera in Yokohama, when I go to Japan, there is a large floor for I phones only and then for Mac books too on another floor. 

The Chinese economy might be going through a transition period as this time, and its going to take several years to transition back to its normal situation.

As far as the US election is concerned no one knows exactly just yet how Trumps policies will affect Japan.

Yes, its true what the article suggests as Trump's proposed policies could not only affect US consumers but also Japanese consumers and the overall Japanese economy, and of course the global economy too, not to mention the situation with China.

But hopefully, just maybe, there will be some cooler heads in Trump's cabinet or on his team who has some economic common sense, but that unfortunately might be expecting too much. 

Have a nice day!

Japan Record Current Account: Updated Nov. 14, 2024.

Japan logs record $103 billion current account surplus in April-Sept.

Article Source: https://mainichi.jp/english/articles/20241111/p2g/00m/0bu/018000c

Ideas:

Japan has always focused on its current account, while the US, for example, doesn't really say much about it, except when its political.

Japan has the highest debt to GDP ratio among advanced countries so its good that its current account has a surplus, which can reduce the debt.

As the Japanese yen is weak, most likely the Bank of Japan is not really concerned as overseas investments and the weak yen brings in more for Japan.

Of course the Bank of Japan is concerned but it has to balance out to positive with the negative, and at this time it says like there might be too many positives for a week yen and the Japanese economy.

With positives like primary income there might just be too many positives to keep the Japanese yen somewhat possible. And don't forget Japanese exporter gain from an weak yen along with foreign travelers to Japan.

As the Japanese economy has been somewhat stagnant for a long time, most likely the Japanese government and the Bank of Japan want to keep the Japanese yen weak but not too much, as it significantly affects the Japanese domestic economy and Japanese importers, with higher import prices.

At the present time, the only positives related to the Japanese economy, is exporters, overseas investments, and foreign tourists who spend a lot in Japan. 

Despite the above listed positives there are still a lot of negatives such as imports were more than exports, and most likely, again, because of the weak Japanese yen which increased the value of imports, despite the weak Japanese yen increasing the export value too.

What Japan needs it some free trade agreements that can reduce the price of imports as Japan is a resource-poor country and they have to import much of what they need.

If Japan did have some free trade agreements, like with the US or even the EU, maybe import prices would not be so high despite the weak yen situation.

The interest rate variance or differential is because the Bank of Japan hasn't up until this year, increased it key rate, as it keeps saying the Japanese economy has been too weak and there are too many side affects, while the US Federal Reserve kept increasing the rate during the inflation period in the US, which caused the rate variance between the two countries.

The weak Japan yen is a boom for foreign tourists going to Japan as it gives them more purchasing power, so they are able to buy more things. 

And of course it does help the domestic economy too, as foreign tourists spend a lot of money in hotels, restaurants, conveniences stores, tourist places and so on.

Because the Japanese yen is weak which makes it strong overseas for Japanese travelers, not that many Japanese are traveling overseas at this time.

Anything that reduces deficits in Japan is good for the Japanese economy as it might help to reduce the high GDP to debt ratio, which, again, it is the highest in the world among advanced economies.

The Japanese economy needs all the help it can get to the fact that the weak Japanese yen might be bringing in more foreign tourists is a good situation as again they spend a lot which helps the domestic economy, which was hit very hard by the pandemic.

Sometimes, in these articles, there seems to be data that contradicts other data, but that's OK. as data is good and needs to be seen, as data can give a more clearer picture of what is going on in Japan.

For example one sentence uses the phrase current account surplus, but the next sentence uses the phrase trade deficit.

Perhaps there needs a better explanation as at the beginning of the article it talks about a record surplus in the current account. So which is it exactly.

Have a nice day!