Japan Industrial Output: Updated April 5, 2025.

 

Japan's Feb. industrial output rises 2.5% on month

Article source:  https://mainichi.jp/english/articles/20250331/p2g/00m/0bu/019000c

Ideas:

Because Japan is heavily focused on exporting they make/produce a lot of products to export so they focus again on the industrial output side of how much is being produced every month or every quarter.

Japan's economy, after WW11 was built on exports and many countries in Asia have followed the same model, such as Taiwan, Singapore, South Korea, and Thailand.

Japan's domestic economy, while stable is not that productive as again, the focus is always on producing products to export globally.

An economic index is often used instead of real data as it simplifies the stats and math and makes it much easier to understand. So all indexes are aligned to follow a 0 to 100+ reading as 100 indicates good activity and less indicates not so good activity. There are indexes related to all kinds of economic data.

And there is what is called a base, which is always set at 100 for a specific year, and then whoever can see what has happened from the base year to the year being examined.

So a reading of 102..4 indicates that there was a fair amount of good industrial activity. It indicates for the most part that production was up and that shows that maybe export demand was good and Japanese production/factories were producing at a good level.

Yes even though there was a reading of 102.4 in January was 1.1 percent decline so yes, it seems that industrial activity in Japan is somewhat fluctuating as it not a linear straight line upward.

Again, Japan is heavily focused on global exporting and there might be some markets that are not doing so well such as China and the US,while the US seems to be the strong economy at this time, which is good for Japanese care producers to export a lot of Japanese cars to the US.

The Japanese economy, like all economies, is made up of many different sectors and not all of an economies sectors are going to be firing on all cylinders all the time, as demand for some products might be down, some might be up, some might be in period of no growth.

That's it important for an economy to diversify its export portfolio as much as possible and not rely on a few products.

South Korea has that problem right now as its export portfolio is based only about 25 major export products which is too small for any major economy to depend on for economic growth.

Japan doesn't seem to be in the same situation, as its export portfolio, while heavily dependent on cars, has a good mix of small electronic type products that it produces and exports globally.

An increase of 0.6 percent in March and an increase of 0.1 percent, while not that great is good for the amount of export products they produce and export every month, every quarter.

Industrial shipments is a special category related to industrial equipment and not related to electronics or cars which are products that might be considered economic drivers.

An economic driver, such as Japanese cars, is any product that significantly helps the economy grow. And the same might be said for the thousands of electronic products, such a car parts, which exported globally to many countries.

Have a nice day!

Japan Food Prices: Updated April 4, 2025.

 

Japan food, drink items facing April price hikes highest in 1.5 yrs

Article source:  https://mainichi.jp/english/articles/20250331/p2g/00m/0na/017000c#cxrecs_s

Ideas:

The Japanese yen is very weak now and as Japan is a resource-poor country has to import much of what it needs including raw materials to make some Japanese food.

Some years ago many Japanese companies were reluctant to pass-on their increased costs to the next in the supply chain including the final customer but those days might be long gone, as Japanese company profit margins keep decreasing which is forcing Japanese companies to now pass-on their costs.

With 11,707 items going to see price increases it will be hard for Japanese consumers to look for reliable substitutes which is what happens to many consumers when prices of items they like reach a a certain threshold.

The price hikes might be noticeable or maybe not that noticeable depending on how much of an increase increases will be but for sure the lower-income and fixed income groups will definitely feel the price increases while the upper-income definitely will not and maybe for some items the middle class or middle income groups might not see or feel much of a difference.

A fair question to ask is when is inflation going to either stop and or reach a point that prices won't increase again, if ever.

And for the good of Japanese society when is the Japanese government going to put into place price controls on some food items such as bread, some meat, milk, eggs, and rice which are everyday basic staples that everyday Japanese households need to survive.

Unfortunately the Japanese government seems to be letting inflation just run its course without much interference, and not even from the Bank of Japan which is suppose to control inflation but increasing the key rate which is supposed to dampen demand in the economy.

All of the reasons given for the price increases are reasonable and raw material costs are out of control in Japan as is logistics costs including shipping of raw materials, and of course labor-related costs at 45.1 percent as companies have been increasing wages to keep their current workers and to try and recruit new workers as there is significant labor shortage now in Japan.

And again, what is really going on Japan as is this just a market correction to the many years of deflation and stagnation and the Japanese economy is finally waking up and prices are going up to correct the many years again of deflation in the Japanese economy.

Every Prime Minister says he is going to do something about inflation and each time they have not done much or what they have tried do with supplements and or cash handouts had a negligible affect on prices in the Japanese economy.

Most likely he will, like other Prime Ministers resort to some kind of cash handout, or supplements to more even price controls on energy prices. 

Japanese consumer prices at 2.7 percent is more than the 2 percent target that the Bank of Japan wants to see for the Japanese economy. Most central banks prefer an inflation rate at 2 percent or just a little lower as they feel 2 percent is controllable number and the an economy is moving at a decent rate.

Many central banks feel anything over 3 or 4 percent is too much for an economy has it affect the lower-income groups too much and an economy is maybe getting close to overheating and or moving too fast. In this case a central bank might increase the key rate to try and slow down the economy.

And if inflation is only at 1 percent a central bank might think an economy is moving too slow and consumes are not buying much and businesses are not investing enough in the economy. In this case a central bank might decrease the key rate as a way to get consumers to start borrowing money and using money in the economy and get businesses to borrow money for investment in the economy, which ultimately increases the speed of the economy. 

Have a nice day!

Tokyo Rice Prices: Updated April 4, 2025

 

Tokyo's rice prices surge 90% in March on year: CPI data

Article Source:  https://mainichi.jp/english/articles/20250328/p2g/00m/0bu/025000c

Ideas:

Because Tokyo is the most populous metropolitan area in Japan, there is more demand for rice and maybe suppliers, vendors, and supermarkets are still keeping the price of rice high to maximize their profits, before the supply is stabilized.

Its unfortunate if whomever is keeping the price high as they are only thinking about their small slice of the pie and not thinking about the good of society or Japanese households.

Some might call this "sticky prices" meaning despite and increase in supply which usually brings the price down prices are still remaining high and not going down very fast or fast enough to help society.

An 89.6 percent in rice prices is not very good almost terrible, as maybe the upper-middle class in Japan might not even notice the price increase but for the middle-class, lower-middle class, and those on fixed incomes it definitely is not good as it cuts into any extra income they might have or had. 

The Japanese government needs to have some kind of temporary price controls on the price of rice, which puts a limit on how high price the price can go and if needed provide subsidies to the rice suppliers as a way to compensate them too for the good of society, instead of just letting the market decide the price.

It quite possible, whomever, that some suppliers or vendor might have more market power then what is good for society, and something or someone is keeping the price un-naturally high.

Price increases of 11.8 percent, 8.4 percent and 8.7 percent might not seem like that much, but again, for some consumers or households in Japan it might be too much for them.

The price increases might push some Japanese consumers to not buy rice balls or onigiri, bento boxed lunches which are sold mostly at Japanese convenient stores called conbinis or even sushi served at Japanese restaurants now might be too expensive for some Japanese consumers.

Only time will tell the real story how many customers are not going to buy what they used to buy because of the price increases in the Tokyo area.

Again, there could be a breakdown in the rice supply chain and or someone in the supply chain has too much market power and is keeping the price high for their own good and not thinking about the good of Japanese society.

The only good thing about this is maybe foreign rice being imported into Japan, which is priced much lower than domestic Japanese rice , might see an increase in demand as Japanese consumers/households begin to like the taste foreign rice over domestic rice due to the high prices of Japanese rice.

Normally, whenever there is an increase in the supply of a product it should eventually bring down the price of the product, but if the demand of that product is very high it might not bring down the price that much.

If there was supply shortage in 2023 why didn't the Japanese government do something to avoid the situation in the summer of 2024 which caused prices to increase out of control.

Its highly unlikely that the sharp rice in foreign tourists drove up the price of rice alone, as the there are other mitigating variables involved such as the rice supply shortage, increased demand in the Tokyo area among other things such as other supply costs increases and an increase in labor costs too.

No doubt the core consumer price index is increasing as supply and labor costs continue to increase in Japan with no sign for slow-down or even a leveling off of prices.

Japanese households have been experiencing inflation ever since the pandemic started and it hasn't decreased yet. 

The Bank of Japan in the past has been saying that the Japanese economy is just too weak for any real key interest rate increases, so they use mini key rate increases to try to lesson the side affects of the rate increases on the Japanese economy.

Have a nice day!

BOJ and Current Economic Environment: Updated March 30, 2025.

BOJ viewed current economic environment 'appropriate' for rate hike

Article source: https://mainichi.jp/english/articles/20250325/p2g/00m/0bu/017000c

Ideas:
The Bank of Japan might be discussing the further increase of rate hikes but that doesn't mean they are going to do it. Recently they have suggested due to the situation in the US they might hold back on any further rate hikes.

And yes, the Japanese economy is improving and yes prices might be either beginning to slow down and or not increasing significantly at this time, and yes, wage negotiations are moving in the right direction which the BOJ is looking for.

But again, as the current US administration is suggesting 25% tariffs on foreign cars not make in the US has got to be making the Bank of Japan to think twice about rate hikes.

The Bank of Japan increased the rate, yes, but now they might be thinking twice when to do it again as the US and global situation is now more tenuous.

The Bank of Japan is usually very conservative, as is most central banks, so don't expect them to make any sudden or rash moves until they feel the environment is correct, which could take some time now due to the current US administration's tariff moves.

The current situation might need to be coordinated with both the Japanese government and the Bank of Japan as the situation is going to be very tricky and it might not be much of a  stretch so see Japan also using tariffs like Canada is doing.

Since this article has been released the US situation has become much more tenuous as there are a lot of rumblings going on now. All that is happening in the US might not be affecting that Japan that much but it could easily begin to spill over into the Asia-Pacific region soon.

The world is highly interconnected now and what happens in one country could easily affect many other countries so no country is safe or an island to itself.

Take for example the tariff situation and global supply chains which all could be significantly affected as all cars these days are not made in just one country but many parts of a car are made everywhere globally, so the tariff situation could have some lateral affects affecting many in the global supply chains.

Japan is a resource-poor country which means it has to import much of what is needs and  the weak Japanese yen is causing import prices to be higher than normal. 

Real wages in Japan is what Japanese households actually have and use and not nominal wages are wages that includes inflation.

Global trade is very delicate situation with supply chains running almost all countries these days, and the "America First" policy is not going to work for global trade. 

Back before the Great Depression the US flirted with the same policy and look what finally happened in 1929 and all through the 1930's. It took WW2 to get the US out of that policy and lets hope the same thing is not going to happen again.

Yes, Japan is a very staple economy, but what is going to happen with tariffs on Japanese cars and global supply chains could disrupt all countries including China. How disruptive is it going too be. Lets hope its not going to turn into a global recession or worse.

All that is happening in the US now could become very significant as for example, foreign tourists to the US could drop of significantly, which then means many US businesses will begin layoff workers which means it could turn into something much worse. 

And then with the tariff situation many foreign car dealerships could potentially go out of business if US consumers can't afford foreign cars, even though they want to buy them, and it could get even worse as the dominos will begin to affect many businesses, and then it could potentially begin to spill over to other economies and their economies could become affected, as again all economies these days are all connected.

So now the Japanese government and the Bank of Japan have a lot to think about related to how they are going to handle the situation.

Have a nice day!

Japan Households and Rice: Updated March 28, 2025.

Amount of rice bought by Japan households up despite soaring prices

Article Source: https://mainichi.jp/english/articles/20250323/p2g/00m/0na/002000c

Ideas:

As usual, even globally, anytime there is a fear of a shortage consumers/households will try to horde as much as they can. This was very common during the pandemic with things like tissue and or course face masks. 

It happened during the summer of 2024 when the Japanese government issued a potential earthquake warning and Japanese citizens rushed to the supermarkets to horde their favorite items or needed items out of fear, and rice was one of the biggest items that was horded.

Rice is an important food staple in Asia, and especially in Japan rice is almost a cultural product and its market is highly protected against foreign rice and there is significant tariffs on foreign rice imported into Japan.

It had been suggested that the younger generations were actually eating less rice that previous generations preferring to eat western style food over rice meals, but it might be a small and less significant idea at this time.

It can't be said that rice in Japan is cheap or inexpensive as it seems that the domestic rice market is heavily protected and because there is less competition based on price, domestic rice suppliers in Japan can charge as much as the market can bear in Japan, which of course might put a heavy burden on Japanese households and having to buy domestic rice, as again because of tariffs on foreign rice it costs too much, for the most part, to buy foreign rice so Japanese households are left with high-priced domestic rice.

To be fair, no one is forcing Japanese households to buy the expensive domestic rice, but maybe if given a choice, based on price, some might begin to buy foreign rice if it was much cheaper.

But like anywhere in the world, globally, consumers have preferences and maybe some or many feel Japanese domestic rice is superior to foreign rice and or they are used to eating Japanese domestic rice and don't want to try foreign rice or risk buying it.

In some countries, for some people, it might like consumer nationalism, meaning buy only Japanese products, but the world, for the most part, has changed and most countries have products, including food products, from countries everywhere these days.

In the summer of 2024 there was of course either a rice shortage due to not so good growing seasons, along with bad weather and some suggest bugs that affect rice crops might have been a problem.

And then there might have been a lag in response by the Japanese government and or are lack of communication in releasing the Japanese government rice reserves into the Japanese rice market as a way to stabilize rice prices.

You would think, based on basic supply and demand principles that once the rice market was flooded with the Japanese government rice reserves, then the prices of rice in Japan would begin to decrease, but that hasn't happened as maybe whomever is still keeping prices high in the market as a way to gain more profits.

And yes, as mentioned earlier, consumers worry about buying what they need and they begin to panic and begin to horde products such as rice in the summer of 2024.

In articles from the summer of 2024, it had been said that supermarkets had to impost limits on the number of bags Japanese consumers could buy such as one bag per customer, but that doesn't really prevent customers from returning later in the day and buying another bag of rice.

Sometimes consumers/customers are not logical, as they act out of fear for what they need and don't think about other consumers or citizens as there have always been articles and stories of consumers arguing over Christmas gifts, and maybe even during the pandemic arguing or fighting over face masks and or any other products that might have been short supply.

Most likely Japanese households/consumers were still worried about a rice shortage or the potential of another rice shortage as the reason for purchases exceeded the previous year's levels.

At the same time, even though new rice entered the market which should have reduce the price, prices didn't decrease most likely due to suppliers worrying about supplies so they kept the prices high on rice just in case.

Finally, maybe in December the worry about the supply among began to decrease so Japanese consumes might have stopped trying to horde rice at super markets.

The idea of an alternative staple might be because in the mindsets of many people once they find a food they like and enjoy or even need, they don't think there is any other foods that can satisfy them.

For example, in South Korea, many South Korean tourists feel they have to eat kimchee everyday and they bring it on vacation trips as they think they need to eat it daily. 

Of course the same maybe can be said about any other ethnic group and the foods they feel they need or want such as some Americans and McDonalds.

It might have been a good strategy to release Japanese government stockpiles, but other article have suggested the new supply of rice didn't bring down the price as it was reported some suppliers were actually holding back their rice supplies hoping the rice would go up.

This might have been completely avoided if the government had either released government supplies earlier and or put price controls on rice in the market to help Japanese households and especially those in the lower middle income, and low income, and fixed income groups in Japan.

Have a nice day!

Japan Inflation: Updated March 26, 2025.

 

Japan inflation slows to 3.0% in February on utility bill subsidies

Article source:  https://mainichi.jp/english/articles/20250321/p2g/00m/0bu/003000c

Ideas:

Inflation has been a major challenge for Japanese households since the pandemic, while inflation seems to have decreased in the US, it hasn't decreased much in Japan, while the pace of increase may subside some its still very high for most consumers in Japan.

And yes inflation is still above the Bank of Japan's stability target and has been for a long time. Most central banks want to see an inflation rate of no more than 2 percent as they feel its a manageable rate for the economy. Too low and central banks feel the economy is not moving fast enough and too high they feel an economy is moving too fast.

It was good and needed that the Japanese government reinstated the utility bill subsidies as many Japanese households were seeing their disposable income decreased due to high energy bills.

Price increases of 2.5 percent might not seem like that much for most Japanese families but for many middle and low-income families, those on fixed incomes it could be a major challenge for them.

While the need for the subsidies was needed and important, it might also increase the government debt as the Japanese government now needs to compensate the energy and electricity companies due to the subsidies.

Its very important for the Japanese government to help all in Japanese society but at the same time, its important the Japanese government to find ways to reduce the high government debt, which is the highest among advanced economies.

While energy prices have begun to decrease they are probably too high for the average Japanese household and for sure those on fixed incomes in Japan.

And again, as stated in other article blogs maybe Japan needs some energy free trade agreements that can help to stabilize energy prices as Japan, as a resource-poor country has to import much of what is needs and doesn't produce any oil or gas in Japan, other than maybe some refinement.

Its seems the energy, gas, and oil situation is always going to a challenge for Japan and maybe, while, controversial, its time to re-consider nuclear fuel as a way to keep costs down, which Japan had for a very long time before the 3/11 earthquake and tsunami in the Tohoku region on Japan. 

Inflation has been a challenge since the pandemic in Japan, and Japanese consumers have probably been reducing their spending on most things except the most essential items.

Consumer spending is the weakest link in regard to GDP in Japan as the Japanese public just doesn't spend as much as the US and probably the same with the EU.  It is suggested that maybe 50 percent of Japan's GDP is consumer spending but it doesn't seem that way, as the BOJ and other Japanese agencies always talk about consumer spending in Japan is not where it should be.

Food prices increasing 5.6 percent is a significant increase and it could be affecting many in Japan such as average Japanese households, low-income households, and fixed income households who spend a larger part of the disposable income on food than the other groups.

The rice supply situation has been written about in other blog articles so not much to say about rice supplies here.

Surging food prices will have an significant affect on all parts of the Japanese economy such shoppers going to supermarkets, maybe shoppers stopping by a convenience store for some snacks before going to work or for lunch, and of course going to lunch, and then going to dinner in the evening and or many people might skip going to dinner as prices might be too high and or they have less disposable income to spend on dinners at night.

And then there is the low-income groups and fixed income groups who are going to be hit even harder and they have even less disposable income to use on many of the these and maybe even at supermarkets they are not going to buy their usual items and try to find substitutes that cost less but just as good, as that's what they hope, and of course going out to dinner is now too expensive for most in these two groups.

The Bank of Japan knows it has to look at all things such as any side-affects to a rate increase and maybe the BOJ felt that the side affects of an increased rate might be too much for Japanese society at this time.

Inflation, at this time, is above the Bank of Japan target of 2 percent and if and when it begins to decrease the BOJ might then feel its time for a key rate increase. But if inflation reminds near 3.0 percent and doesn't move toward the 2.0 percent target they might wait until it does.

The other variable that that BOJ is watching very carefully is wage increases at Japanese companies. If Japanese companies increase wage to a level that the Bank of Japan is pleased that might be good enough for them to increase the rate.

The challenge is most of the Japanese workforce doesn't work for the large name-brand Japanese companies but up to 70 percent of the workforce works for small and midsize companies which most likely can't afford to give the same wage increase as the large companies do.

And then there is the continued challenge of consumer spending in Japan, which is the weak link in Japan's GDP. Weak consumer spending has always been a challenge in Japan as Japanese consumers, for the most part, are savers and not spenders like US consumers.

Its quite possible the Bank of Japan, the Japanese government, and of course Japanese businesses, would hope that Japanese consumers would be a little like consumers in the US who like to spend.

Its possible Japanese shoppers are buying air conditioners early, in February in anticipation of a hot summer and prices for air conditioners in the winter might be lower than during the summer when demand for AC's is much higher.

Service companies, most likely are passing-on their increased costs to the  next in the supply chain and most likely as they increase wages too, they too are passing-on those costs the the final consumer in the supply chain.

Service companies in Japan often employ a lot of contract workers, part-time workers, and maybe mostly female workers and these groups need and want wage increases too as they know there is a labor shortage in Japan and they can now easily find a new or better job with higher wages and so service companies might understand and will increase wages in April when wages will increase again, as the want to keep their workers with higher wage increases and or attract new employees with higher wages.

Have a nice day!

Japan Govt. Reserve Rice: Updated April 2, 2025

1st batch of Japan gov't reserve rice handed to buyer in bid to combat spiking prices

Article Source: https://mainichi.jp/english/articles/20250319/p2a/00m/0bu/016000c

Ideas:

Not to be critical or negative but it seems that March 2025 is a little late and as maybe August or September of 2024 might have been a better time to release the national reserve rice as many Japanese households were struggling back then to find rice in the supermarkets.

When the reserve rice does hit the market are the vendors and or supermarkets going to keep the prices high or are they going to lower the price back to the price of before the rice shortage started.

Usually anytime the supply of product increases the price should go down, but maybe not just yet, as again vendors and supermarkets need to see even more of a supply increase before the prices begin to get back to some kind of normalcy.

As rice is usually sold or bought in auctions by vendors and then eventually to the supermarkets it would be interesting to see just what the auction price was or is, was it higher or lower than normal due to a short supply of the product.

Most likely, it will take some time for the price of rice to go down ans vendors and or supermarkets want to maximize their profits as long as they can and when supermarkets see other supermarkets lowering the price then most likely all supermarkets will begin to lower the price of rice in the market.

But the price also is going to be determined by what the Japanese government next, such as are they going to release more rice reserves to make sure the supply is good and prices can then get back to normal or some kind of new normalcy.

I'm not sure why Japanese official doesn't want the rice to be released to be labeled as reserve rice and maybe some might think its inferior rice or maybe its been sitting around too long and not good quality rice now.

Of course Japanese consumers can be very picky and maybe if they see reserve on the rice again they might think is been sitting too long and or inferior than regular rice.

But if most of the reserve rice goes to the restaurants and not the supermarkets who is really going to know what kind of rice is it regular rice or reserve rice.

It looks like rice prices are not going to go down that much anytime soon as the rice sold in supermarkets is still twice what it was last year. 

Rice vendors of course are going to think about their business and themselves first and many businesses do, but for the good of Japanese society and Japanese households vendors and supermarkets should think about the common good and not just about just making the most profits they can or even trying to take advantage of the situation and try to increase the rice price as much as as they can.

But that's easier said than done as vendors and Japanese supermarkets have to make a profit if they want to stay in business, but they can try to reduce the price some to help Japanese households and Japanese families as much as they can.

The Japanese government needs to continue to release it reserves so that the market can get back to some kind of normalcy and try to basically food the market with rice to ensure the supply of rice is adequate.

But then the challenge is for vendors and supermarkets to respond in kind as they see the supply getting back to some kind of normal or at least a new normal, and not continue to keep the price high for too long a time.

Then there is the idea of foreign rice in the Japanese rice market, which might have gotten more traction or more demand because the price of foreign rice is lower than the price of domestic Japanese rice.

But it might take more time for foreign rice to really become very popular, in japan even globally, it takes consumers time adjust tastes or their like of a product and this is no different as maybe, because of the price, some Japanese customers have become accustomed to the taste of foreign rice, while others in Japan might need more time.

Have a nice day!

Japan Economic View: Updated March 22, 2025.

Japan keeps economic view, warns price hikes pose downside risk.

Article Source: https://mainichi.jp/english/articles/20250320/p2g/00m/0li/010000c

Ideas:
Yes, the Japanese economy indeed might be recovering moderately, which in itself is not a bad thing, as recovering too fast or being overheated has it own challenges.

But the real challenge, always, in Japan, has been consumers and Japanese households, traditionally have been more savers than spenders but then add in the continued high prices in Japan and maybe even more consumers are cutting back on spending and or only spending what they really need.

The only a good thing, might be if consumers continue to not spend that might force prices go decrease some as less demand usually means prices can go down as companies reduce prices to spur consumer spending, but it might happen in Japan as companies continue to pass-on their increased costs to the next in the supply chain including the final retail customer.

Not to get into politics but in economic thinking, it might not be good for Japanese exports as going to the US could be priced higher in the US, which means US consumers might not buy Japanese products because they will become too expensive, as again, US companies will pass on the tariff to the next in the supply chain which means the final US retail customer.

And yes, Japanese exports have been a major economic driver for the Japanese economy, as the Japanese economy since the second world war has been been driven mostly by exporting products globally and of course to the US.

Its too early to say what is really going to happen as there is a lot discussion and dissension now in the US so who knows exactly what is going to happen.

The Japanese government, and for good reason, never wants to say anything negative about the Japanese economy as they don't want to upset the financial markets, so they use phrases like recovering at a moderate pace but adding it part be on a pause at the moment, as a way to say while its recovering but not as fast or what we would like.

The Japanese economy is still a very stable economy and really doesn't go down that much or do up that much. That can be both a good thing and a not so good thing, as sometimes it seems like the Japanese economy is stuck or stagnant but there times when it will have a growth spurt but then go back to its stagnation phase.

So the Japanese economy, while staple can be unpredictable sometimes with a little growth and then a little less growth and so on every quarter.

It has been suggested that corporate profits are improving a lot as companies are increasing their wages to their workers and it also has been suggested that many large companies have been sitting on huge sums of cash for many years but are now finally beginning to use the cash to increase their workers salaries as a way to keep existing workers and attract new workers and many companies are doing the same thing, as there is a so-called labor shortage in Japan.

And yes, consumer spending or Japanese household spending is maybe 50 percent of Japan's GDP, but you sometimes never see it as Japanese consumers, due to continued high prices and the lack of wages increasing for many years, they just don't spend like US consumers spend as they are more savers and now cutting back a lot as inflation has been cutting into their disposable income.

Japan is a resource-poor country which means Japan has to import much of what is needs which also means as the Japanese yen is weak compared to the US dollar imports into Japan are expensive now, which of course affects Japanese consumers and Japanese companies that use raw materials from the US to make products, which also means Japanese companies are going to pass-on their increased import costs to the next in the supply chain including the final retail customer.

The only bright spot of the Japanese economy this spring is if Japanese companies increase wages to a level that Japanese workers/Japanese households feel good and that might be enough for Japanese consumers to begin to spend again in the Japanese economy.

The only negative part might be small and midsize companies, which employee about 70 percent of the Japanese workforce, and if small and midsize companies, which don't have the resources that large Japanese companies have, can't increase wages enough that could mean 70 percent of the Japanese workforce might not feel good about the wage increase they get and of course might not spend to help improve economic growth.

Consumer sentiment is everything, meaning if consumers feel good they spend if they don't feel good they will not spend or they will only spend what they need and no more than that.

If enough Japanese consumers don't spend you would think that maybe the Japanese government might try price controls, at least temporarily, to reduce prices and spur consumers to spend again.

The Japanese government has recently since the pandemic instituted energy subsidies as a way to help Japanese consumers and households so why haven't used price controls for some food basics such as milk, bread, eggs and rice to help Japanese families.

Again, not to get into politics but the global economy is very much interconnect as supply chains, globally could potential be affected a lot which means all countries are going to be affected by what is going on. 

Even if a country doesn't have tariffs on its products, because many products are made in many different countries it could affect those economies that don't have tariff challenges.

And again its a little too early to tell what is going to happen as the current administration keeps changing its mind on what and how its going to do things.

Have a nice day!

Foreign Visitors To Japan: Updated March 27, 2025.

February foreign visitors to Japan hit monthly record of 3.26 million

Article Source: https://mainichi.jp/english/articles/20250320/p2g/00m/0li/010000c

Ideas:

In terms of appeal to foreign visitors Japan seems to be on a roll ever since the pandemic ended. Of course the weak Japanese yen helps too has foreign visitors have more purchasing powers, which means they can buy more Japanese products, buy more Japanese food, stay at better hotels and go to many different tourist areas in Japan.

Its also interesting that maybe the price of airline tickets, which seems to have almost doubled since the pandemic ended as not deterred foreign tourists from going to Japan. I remember, before the pandemic, the tickets I used to get to go to Japan was almost half the price they are now, and again foreign tourists don't seem to be worried about the increase in airline ticket prices these days.

Its interesting that both Australia and the US are somewhat away compared to much of Asia, and looking at ticket prices again from the two countries again doesn't seem to deter tourists from these two countries from going to Japan.

Its understandable, being close to Japan that tourists from South Korea and China would choose Japan for a vacation, but for a very long time, it wasn't that way for South Korea.

For a very long time and maybe still for many in South Korea, there is resentment about Japan occupying South Korea for about 30 years in the 20th century. But it seems for many, that might be a long time ago as South Koreans now just want to enjoy Japan as much as any other group.

And of course there might still be some pent-up demand related to the pandemic when people couldn't travel, so maybe they are making up for lost time due to the pandemic.

While the record numbers are good and needed to help boost the Japanese economy, some Japanese cities and tourist areas are now going to add a tourist tax because of the over-crowding and too many tourists for example in the Kyoto area now.

If there tourist tax is too high it might discourage tourists from visiting that area, such as Kyoto which might put a 10,000 yen tourist tax on those who stay in Kyoto. A 10,000 yen tax might be like $100 if the currency rate was equal.

And again as Australia and the US is a little far away, that doesn't seem to deter those who want to go to Japan. For example, the last trip I took to Japan, as I was waiting for my bag at the baggage area, at Haneda Airport in Tokyo, I saw the city of Newark of New Jersey on the baggage claim area and thought that is a long way to go to get to Japan.

With the current exchange rate today a 10,000 yen is like $66.00 US dollars so that might or might not deter foreign tourists from visiting Kyoto.

While Japan has a long way to go to match France or even Spain in the number of tourists, it's a good start to maybe being the go to place in Asia for tourists, like France is for Europe.

The Japanese economy is kind of in stagnant phase now but slowly coming out of it. Its quite possible the surge in foreign tourists, with a weak Japanese yen, the Japanese economy with an even more surge in tourists could put the Japanese economy back on track for some significant growth.

But the challenge is some might think there are now too many tourists in Japan as maybe some areas have become over-crowded and some locals might not like it.

Record surges in foreign tourists are good and needed but the Japanese economy needs more than foreign tourists as it wants more Japanese consumer spending and more business investment and more exports to grow the Japanese economy.

Have a nice day!

Japan Trade Surplus: Updated March 23, 2025.

Japan logs 585 bil. yen trade surplus in Feb. on car, chip demand

Article Source: https://mainichi.jp/english/articles/20250319/p2g/00m/0bu/013000c

Ideas:

Japan is a major export economy as its economy has been built on exports and trade since after the second world war.

Back then the Japanese economy might not have had much or very little domestic demand so the Japanese government decided to focus on exports to build its economy.

Japanese cars it a major driver of the Japanese as Japanese cars are in demand globally and Toyota it the largest volume producer in the world.

Recently chip-making machinery has become a major export product too as Japan decided to focus on chip-making equipment more than actually making chips as it feels behind South Korea and Taiwan in chip productions.

Electronic parts is another major export product as Japan is maybe the world leader in producing electronic parts.

Japan is a resource-poor country which means it has to import much of what is needs and with the Japanese yen being very weak, imports are now very high for Japanese businesses and Japanese households.

Some politicians want to make a big deal that the US always has a trade deficit but that is how the US economy is structured as it gets a lot of products from other countries and does export a lot of products too but the US economy has consistently been a trade deficit economy.

The Japanese economy, on the other hand, is a trade surplus country as it consistently exports more than it imports and that is fine for Japan and what the US does is fine for the US.

The current administration is not sure what its going to do with tariffs as it keep changing it mind about what to do.

Of course all businesses, globally are up in arms, as most businesses want certainty and not volatility or uncertainty and want to know what is going to happen so they can prepare accordingly.

Again, nothing has been solidified and to what is going to happen as there is just a lot of talk. Even thought the talk is strong related to Mexico and Canada and maybe even China, no one 100 percent just yet what is going to happen, as the tariff situation seems to change even monthly.

An of course Japanese car makers are not sure what is going to happen and how it will affect them in the future and what US consumers are going to do when prices are increased due to the tariffs.

Trade wars are never good for anyone as everyone loses and global trade might suffer some but it will never be completely eliminated as now all countries are interconnected and supply chains globally are too important for the global economy.

China seems to be going through a transformation period and it might take some time for the Chinese economy to get back to normal, if at all, or at least a new normal for the Chinese economy.

Most likely its not just Japan that is experiencing a trade deficit with China as maybe many countries are feeling the same thing as trade with China just isn't the same as it was before the pandemic.

Since the pandemic China just hasn't been the same as even before the pandemic there were signs of stress in the Chinese economy.

And yes, the rest of Asia seems to be back to normal as its taken a good four years since the pandemic to get back to some kind of normal, and yes, Japanese cars are leading the way as usual for Japanese exports, and chip-linked shipment are just as important as Japan has tried to get back into the chip producing game as it has fallen behind Taiwan and South Korea recently.

And as usual the EU seems to be the weak link in global trade for Japan as maybe the Ukraine war is still causing some challenges for Japan exports to the EU.

But the EU, and individual countries within the EU have been less than good in terms of economic growth for a long time and even before the Ukraine war situation.

No one knows for sure how and when the EU is going to come out of its sick-period, if it ever will but for now its the weak link in global trade.

Have a nice day!