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!