BOJ ups economic views for 2 regions on quake recovery, auto output
Ideas:
The Bank of Japan usually doesn't want to say anything too negative about any region and they don't want to cause harm to the region and or upset the markets and any companies in that region.
The recovery of the region that had the massive earthquake, as suggested, is not recovering very fast or slower than expected.
The production of cars might have slowed due to the Toyota group testing irregularities as they shutdown production in some plants in Japan, and only recently getting back to normal production.
At the same time the car industry in Japan, like maybe everywhere, was hit with semiconductor shortages due to supply chain challenges related to the pandemic.
Again, the Bank of Japan doesn't want to give any real negative reports so using the phrase "recovering moderately" might be a positive or just a hopeful positive.
The question remains as it been a year since the earthquake and why has it taken a year to get the recovery going as has been suggested there are still some people in earthquake shelters.
It highly unlikely that most likely there are not that many tourists visiting the earthquake hit area, and especially foreign tourists.
The Tohoku region is probably the least populated region in Japan and most as with many things in Japan, companies would invest in the region to help the region so the region for having some car manufacturing plants in the Tohoku region.
Chip manufacturing is now a major industry and Japan, as needed, has increased its production of chip manufacturing equipment but its way behind Taiwan and South Korea at this time.
Wage increases are now very important despite not being a priority for many years, as Japan is experiencing a labor shortage and companies need to increase wages in order to get workers or retain workers and workers can pick and choose from many jobs now.
Wages in Japan are some of the lowest among OECD countries and Japan used to have some of the highest wages but companies neglected to increase wages for a very long time.
Japan's GDP might be increasing yearly, but wages have not gone up the same as GDP, which has decreased the standard of living for many Japanese.
Now Japan is playing catchup with other OECD countries and may never get back to it status as a higher level economic country.
Usually if an country's economy continues to improve and or inflation continues to go down, central banks will begin to lower the key rate, but Japan is the opposite because its key rate as been almost zero for a very long time and they can only increase the as needed.
The BOJ governor has been saying the same thing about he needs to see more data and or is waiting to see what is going to happen related to wage increases in April of 2025.
If the wage increases are not to his liking and or if all companies including small and midsize companies don't increase wages enough, he might not increase the key rate in the spring.
Again, the BOJ is very cautious and might not increase the rate but if they do it will not be that much for example maybe only 0.5 at the most as they don't want to upset the financial markers and or stress out the Japanese economy too much.
Yes, the US economy could change a lot or not that much depending on what the next administration does and what the US congress allow the new administration to do, so its good that the BOJ might be taking a wait and see approach as to what is going to happen in the US.
At the present time, the US economy is riding high with low unemployment, many jobs being added in December and inflation is trending down.
But all could change soon.
Have a nice day!
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