Japanese Rice Prices: Updated May 2, 2025.

Rice prices in Japan up for 16th straight week, hit new high despite gov't reserve release.

Article source:  https://mainichi.jp/english/articles/20250429/p2a/00m/0bu/004000c

Ideas:

Something or someone is causing major challenges for the Japanese rice market as maybe someone is exerting too much market power which is disrupting the normal mechanisms of supply and demand, and keeping prices unnaturally high.

There usually is only three or four players in the market, such as the growers of the rice, the polishers or those that improve the rice for the market, the wholesalers, which could be more than one in the supply chain, and then the supermarkets, and then the final customer.

So take away the final customer as they have no control over the price, so someone in the supply chain might be exerting too much market power which is causing prices to be higher than usual.

The Japanese government, for the good of society and Japanese families, should put a limit on how high prices can increase to reduce the stress and burden on society. Even if they have to give supplements to wholesalers and or growers they need to do something as the stress is falling too much on Japanese households related to rice prices.

An increase in releasing rice reserves into the market should help with reduced prices but only if all those involved are on the same page but it looks like someone only cares about their profits and not about what is good for society.

So someone in the supply chain might say, to survive I have to keep the price high or I will not stay in business. But that is entirely not true and if it is there are other actors in the market causing prices to remain high too.

Yes it does take some time for the rice to reach the supermarkets and the final customer, but the problem might be supermarkets might still be keeping the price high as they know that maybe the reserve rice is a limited supply.

Unless wholesalers and supermarkets know that the rice supply will be constant and unlimited they might continue to keep prices high to maximize profits and they might be worried the supply could do down again.

So there is a negative mindset running through the Japanese rice market now and it going to take some time to change and just adding the released Japanese government rice into the market is not going to change the mindset of wholesalers or supermarkets and they need to know and see that supplies are back to some kind of normalcy.

Yes, it looks like wholesalers are looking out for each other and or at least the large wholesalers as maybe the smaller wholesalers are having challenges with getting some shipments.

Major wholesalers might be helping other large wholesalers at the expense of the smaller regional wholesalers which then is hurting some local stores in regional areas.

And this is where market power, if not checked or limited, can disrupt the entire supply chain and some lose out such as regional stores and regional wholesalers.

And yes, it looks like some wholesalers are helping other wholesalers at the expense of small to medium-sized supermarkets, kind of like large companies helping other large companies at the expense of small and mid-sized companies.

And again, until the rice market gets back to some kind of normalcy these kind of market actions are going to continues and unfortunately, some small wholesalers and some small supermarkets are going to be hurt in the process.

And yes, some wholesalers might be holding onto their inventories and not moving them through the supply chain as needed for the good of society.

Demand for rice might have exceeded government estimates but that should have been reason enough to release even more government rice into the market, instead of just releasing a little at a time.

This has become a major challenge for Japanese households as maybe they should think about buying foreign rice, which might be much lower in price due to demand for the product.

Have a nice day!

Hotel Prices: Updated April 29, 2025.

As prices rise, is battle heating up between domestic, foreign tourists for Japan hotels?

Article source: https://mainichi.jp/english/articles/20250425/p2a/00m/0bu/018000c

Ideas:

Maybe it's the market economic way of increasing prices whenever demand increases a lot, as of course suppliers want to maximize profits whenever demand increases a lot. And of course with a record number of foreign tourists entering Japan, Japanese hotel suppliers are going to keep increasing the price and they know visitors need rooms.

Of course there is the problem of a labor shortage in Japan and also raw material costs keep increasing which contributes to the increase in prices as hotels pass on their costs to the customer.

With all due respect to the article, why does everything have to be labeled a competition, as why are domestic travelers and foreign travelers in a competition for rooms instead of maybe saying rooms are scare due to an increase in hotel visitors.

When the demand for a product is high of course there is going to be less availability like for airline tickets or I phones and so on.

At the same time, due to a shortage of labor in Japan, hotels might be increasing hotel fees to pass on their increase in wages to get the best possible talent and or making sure they are able to keep the talent they have now.

To be fair, what is the average rate per person? Is it a single room, a double room, a twin room or is it the composite of all of them together to make the average.

At the business hotel in Yokohama that I usually stay at is topping out at over 10,000 yen per night for a twin. Singles run around 7,500 yen and doubles over 8,000 yen per night.

It's quite possible, because many hotels and service businesses were hit hard by the pandemic and lost a a lot of revenue, that they might be trying to make up for their losses during the pandemic by charging higher than normal prices now.

Even if Japan does reach the 40 million mark for foreign tourists they still have a long way to go to match France or even Spain in the level of foreign visitors they get each year, but 40 million is still a very good start.

At the same time, there are those in Japan who think maybe Japan has too many foreign visitors now as over-tourism seems to be a common phrase used now in some tourist friendly places.

There is even the talk and the implementation of a tourist tax in Kyoto where there seems to be a  large number of foreign tourists, and some, not all, are not very polite with their trash or understanding Japanese customs or culture.

Prices almost never go down in a market economy except for maybe in Japan during its deflation period which might be a thing of the past now, as inflation keeps increasing and with a labor shortage and and with the cost of raw materials continuing to increase hotel prices and tourist places will see continued price increases. 

And then, again, the labor shortage is a real and serious situation in Japan that is making all companies as workers have a choice of more than one job and companies are aware of the fact  that they need to increase wages to get the best talent and or keep the talent they have now.

Unless there are concrete and enforceable rules against companies acting like a cartel, they will bend the rules or go as far as they can to maximize their profits and or get the sales they need.

Issuing a warning might not be enough as some of the hotels, if they were arrogant and flaunted the rules, they need to be made an example of so that other hotels don't do the same thing again.

But the luxury hotels might have government connections that might make them off limits and they might think they can whatever they want.

Have a nice day!

Japan Rice Prices: Updated April 26, 2025.

Rice prices in Japan continue to rise for 15 weeks in row despite release of gov't reserves

Article source:  https://mainichi.jp/english/articles/20250422/p2a/00m/0bu/008000c

Ideas:

There is just no good reason for rice prices to continue to increase after 15  weeks of the Japanese government releasing rice to improve rice supplies and drive down the costs of rice in the market.

There is got to be a breakdown somewhere in the market or supply chain that is causing prices to continue to remain high for Japanese households.

Most likely middlemen and or supermarkets are continuing to keep the price high as long as they can to get as much profit as they can at the peril of the Japanese consumer.

The Japanese government, for the good of society, needs to put price controls or limits on the price of rice to help the average Japanese household.

There is something in the system that is not right here as supplies should begin to get back to normal and something needs to be done to make sure supplies can be normal in the supermarkets again.

If adequate supplies have not reached store shelves, then the government needs to step up it monitoring of the supply of rice and find out what is really going on.

It sounds like, again, there is a breakdown in the supply chain as for some reason, the rice released by the Japanese government is not getting into the hands of the supermarkets for the good of society.

Again, there is something really wrong with this, as only 0.3% of released rice has reached supermarkets, as what has happened to the rest of the rice or where is the rest of the rice that was released.

It looks like maybe the wholesalers are trying to control the rice market for their own personal gain at the peril of both Japanese households and Japanese supermarkets. 

If this is just a slow moving supply chain situation, the Japanese government should step and find ways to improve the movement of the supply chains for the good of Japanese society.

The excuses given are not very good as using the busy end-of-fiscal year period is not a good excuse, as the market doesn't stop for end of year periods, and the same for using the shortage of trucks to move the rice and again, a shortage of trucks doesn't make the market stop and wait for more trucks and the same excuse about time required to polish large quantities of brown rices is again not a valid excuse when households are depending on the rice to live on.

This seems to be a major supply chain challenge as how many tons of released rice does it take for the market to get back to some kind of normalcy. Again something is not right with the Japanese rice market as there should never have happened in the first place.

And what happens in the summer if rice prices are not suppressed and continue to increase. Is the Japanese government going to release more rice. Are they going to investigate what is happening.

And then there is the idea of foreign rice in Japan. How many tons of foreign rice as been brought into Japan to help with the supply situation and is the foreign rice available in the Japanese supermarkets for Japanese households to buy.

Unfortunately, in a market system, everyone looks out for their own good. The rice growers look out for their own good.The middlemen look out for their own good. The supermarkets look out for their own good, and of course at the end of the supply chain the consumers too look out for their own good.

And the consumers get the short end of the stick as everyone before them just increases the price for their own good and when it gets to the consumer they have to pay a lot more that what was needed to grow the rice. And of course along the way, those in the supply chain take advantage of their position and just increase the price without thinking about the final retail customer at the end of the supply chain.

Have a nice day!

Japan Trade Deficit: Updated April 25, 2025.

Japan logs 5.2 tril. yen FY 2024 trade deficit despite record exports

Article Source: https://mainichi.jp/english/articles/20250417/p2g/00m/0bu/012000c

Ideas:

The Japanese economy, like all economies, is very complex and there is no way exactly to predict if there will be a trade deficit or a trade surplus each month or each quarter or even each year.

There are always going to be spurts of export growth or spurts of import growth depending on the supply and demand of products and these days the efficiency of supply lines.

Japan has always been an export oriented economy but at the same time is a resource-poor country which means it has to import much of what is needed to survive.

Not to say anything negative but imports of personal computers from the US and smartphones from China, might indicate Japanese electronics are not selling very well in Japan and US and China products have become more popular these days.

It's quite possible that Japanese smartphones and personal computers, with inflation rampant in Japan, are now more expensive than US products or Chinese products.

And of course there is the weak Japanese yen situation which you would think would make Chinese and US products more expensive but maybe they aren't as again, some Japanese products in Japan seem to be very expensive compared to foreign products.

Japanese export companies continue to do their part as maybe demand for Japanese products globally are still very good based on the data given in the article.

The weak Japanese yen has both positives and negatives for the Japanese economy, as a weak Japanese yen improves the profits of Japanese exporters while it hurts Japanese import companies that need to import much of what Japan wants and needs.

But right now, as Japanese consumer demand is weak or not so good, Japanese exports might be the only area that is helping the Japanese economy.

Semiconductor manufacturing equipment, electronics components, and Japanese vehicles to the US have become and remain the key economic drivers in an economy that is still looking and hoping for a revival of Japanese consumer spending, which again, is less than normal these days, due to increased inflation.

But of course, unfortunately, with the trade talks, things might be better or worse in the future depending on what Japan can get from the US administration.

Again, the T administration seems to know nothing or doesn't care about absolute or comparative advantage related to international trade or international economics.

If Japan doesn't have any significant free trade pacts now might be a good time to get some implemented as way to try and reduce some of its imports costs to help the Japanese economy and Japanese households with their expenses.

For example it seems strange that maybe Japan has no free trade agreement with the US as both are major trading partners and it would be beneficial for both economies.

But the sticking points might be some Japanese products that the Japanese government wants to protect some industries or sectors that they feel are very important to Japanese culture.

While those in authority might say the Japanese economy is recovering moderately, try telling that to the average Japanese family or household and see what they say about that.

The only thing that matters to Japanese households, like other households globally, is the price of products they need and their incomes. They could care less about what the GDP is doing or any of those media talking points these days.

Always take the T administrations ideas with a grain of salt, as they can and will change their minds frequently which means businesses and stock markets can't plan on anything significant in the future.

Trade wars are terrible and they hurt all countries and economies as there are no by-standers in a trade war, as too many supply chains are too intermingled with all economies globally.

No one knows for sure what is going to happen just yet, as again, its a little too early just yet, to see anything significant.

However, in the US, many companies are cancelling orders from China due to the US/China trade situation, which is going to hurt US consumers in the near future.

Lets hope Japan didn't get caught in the US/China situation too much as they try to navigate the situation.

Yes, at this time trade between the US and Japan is robust and very significant and lets hope it can continue as Japanese products, especially Japanese cars are very popular in the US now.

And a global slowdown is always possible and some might put it at around a 40 percent chance now of some kind of global recession if the T administration implements the tariffs as is.

The Chinese economy is still going through some kind of transition period ever since the pandemic and still hasn't been able to get its footing yet.

The Chinese economy is still a viable economy and it would be wise for Japanese companies to continue to do business in China even though recently it hasn't been as what it was in the past.

The rest of Asia and Japan remain strong trade partners and most likely will continue to be that way despite what is happening with China and the US in the future.

The European Union is a very different story related to trade, and maybe yes or no the Ukraine situation might have some effect on trade with Japan.

But it's been 13 years that trade with the EU has been in the red, so the Ukraine situation can't be the only reason for the continued trade deficit with the EU.

There are always going to be some good months and some not so good months as maybe trade with some products is more related to demand and or how much a company thinks demand will be for the coming months.

The 10 percent tariff implemented on Japanese cars may or may not have a significant effect on car sales in the US as it's too early to tell exactly.

Yes, demand for some products are not the same each month and there will be fluctuations in orders for some products depending on expected demand or projected demand of products in the future.

But yes, the tariffs potentially could have an effect depending on the products and depending on the demand for the product in the future.

Have a nice day!

Japan Core Consumer Prices: Updated April, 19, 2025.

Japan's core consumer prices up 3.2% in March on high rice prices

Article source:  https://mainichi.jp/english/articles/20250418/p2g/00m/0bu/008000c

Ideas;
Core consumer prices in Japan has been increasing ever since the pandemic started and while it might be slowing gradually there is no end in sight for Japanese households or the Japanese economy.

The Bank of Japan's target of 2 percent is a reasonable goal, like other central banks, but not much as changed even though the BOJ has implement two rate increases to try and decrease inflation with no really affect.

Perhaps the BOJ needs to increase the rate even more, but at the same time, there might be too many side effects that could hurt the Japanese economy.

From 3.0 to 3.2 percent might not seem that much of an increase but it could be enough to cause stress on some Japanese households including those with young children, or single parent households or even those on fixed incomes in Japan.

And it might be remember, that this might be increase of one month, but what about all of the other months where there were price increases and it starts to add up each month over time.

It can't be said that inflation in the US has decreased that much as many US households too are still feeling the affects of inflation.

An increase of 2.7 and 2.8 percent doesn't seem like that much but tell that to the Japanese single parent, or the part-time worker, or the fixed income couple in Japan.

At the same time, as inflation continues to increase in Japan, income inequality keeps increasing in Japan, which is the difference between the highest income and the lowest income and its been increasing every year since the asset bust of 1989. 

What is happening as income inequality continues to increase in Japan, it decreases Japanese consumer's disposable income which means less and less Japanese households are able to spend freely in the Japanese economy which is reducing economic growth in Japan.

Some might say the Bank of Japan needs to do more or some might say the Japanese government needs to do more to reduce inflation but governments can only do so much as maybe the normal tools used to manage the economy are not working there might not be much that can be done and the idea then is too just let inflation run its course naturally and hopefully it decreases over time.

That might be one strategy with the idea of do no harm, meaning don't make the situation worse, as maybe other more stern measures might cause more harm than good in the Japanese economy.

The Bank of Japan and the Japanese government are in a tricky situation now with more like a  catch-22 situation meaning whatever we do are going to have significant side affects and there is no real significant way to reduce inflation without harming the economy or Japanese households.

Its unfortunate that there is a so-called rice shortage in Japan or was rice shortage, as the Japanese government has attempted to release its reserve rice stockpiles to increase supply but with no real significant difference in prices and maybe the middlemen are keeping the prices artificially high at this time to maximize prices as much as possible.

Real wages is a different but still related story as inflation keeps real wages from increasing which means Japanese households have less and less purchasing power and or less and less disposable income to use in the Japanese economy.

And all of this means is Japanese consumer spending might be 50 percent of Japan's GDP, but as Japanese consumers real wages keep decreasing there is going to be less and less spending in the Japanese economy, and again, less economic growth.

It's quite possible some in the Japanese rice market might have more than normal market power, meaning they are influencing prices in a way that is upsetting the normal supply and demand mechanisms.

While in a market economy, everyone has the right to buy and sell as they see fit, but at the same time, there is the idea that no actor in market can just set a price that might be against the best intentions of society and that might be happening now. There is also the idea of whatever the market can bear, meaning the highest price we charge and not lose customers. But in this case consumers continue to buy rice, at a very high price,  as its a very important stable for Japanese households.

It seems Japanese suppliers maybe are using the hot weather or higher production costs as a way to keep prices high as why have rice prices this year increased significantly when production costs might have been increasing for many years.

In this case, it might be a good time for the Japanese government to introduce temporary price controls on rice, meaning put a maximum price on rice and then give subsidies to the Japanese farmers or middlemen to ease the stress on Japanese households.

Again, while not trying to influence supply and demand normal mechanisms too much price controls on Japanese food stables might be needed for the short-term until prices can bet back to some kind of normal. to reduce the stress on Japanese households especially those with children, those who are single parent households and fixed income households.

There is no real guarantee that rate increases can reduce inflation and there is no really guarantee how long it will take and there is also the problem with the side affects of rate increases which could significantly affect some Japanese households.

The Japanese economy is still in a stagnant situation, meaning it really hasn't grown that much or even at all for a significant number of years.

And then there is the idea of wage increases in Japan, but wage increases need to be felt by all Japanese workers and not just those in large Japanese companies. For example, its estimated that 70 percent of the Japanese workforce don't work for the large name-brand Japanese companies but small and midsize companies which tend to pay much less in wage increases.

Yes, the T administration has caused chaos all over the global arena and there seems to be no letup to the confusion.

There are no winners in a trade war and if the there is China/US trade war its going to affect all countries globally and there no one country that is safe.

It might not be the right time for the Bank of Japan to make any changes as the Japanese economy is maybe just waiting to see what is really going to happen.

Unfortunately T is not following normal procedures as T really doesn't have the power or authority to decide tariffs. as the US congress, is supposed to have the authority on tariffs and trade deals, but T is not a normal president following the rule of law or respecting the checks and balances of normal president.

Have a nice day!

Japan Rice Prices: Updated April 15, 2025

Japan rice prices hit new high despite gov't countermeasures

Article source: https://mainichi.jp/english/articles/20250414/p2g/00m/0bu/042000c

Ideas:
With all due respect, despite the Japanese government attempting to increase the supply of rice in the market someone or something is keeping the price high.

Usually whenever the supply of a product or staple increases the price will eventually decrease but that has not happened in this situation as the price of rice has not decreased and might even be increasing.

Most likely in this situation, rice wholesalers or middlemen might be keeping the price high to maximize the profits for as long as they can, and not really thinking about the good of society.

Most it not all agricultural products, such as vegetables, fruits, fish and some meat products are all auctioned off and then the products go to the middlemen and then to the supermarkets.

So the weak link might be in the supply chain related to the middlemen and even maybe some supermarkets too might be keeping the price high to try and maximize profits, despite the Japanese public wanting or needing lower prices.

When the supermarkets and middlemen, who might be keeping the price high begin to see that the majority of supermarkets have decreased the price, then all the supermarkets will do the same to not lose any sales.

An increase of 8 yen might just be an average as maybe some supermarkets might have increased the price even more and some maybe a little less. If rice is bought in large volumes that 8 yen increase could turn into a lot for the average Japanese family.

But then again, to be fair, it might not be the supermarkets only, as maybe it could be the middlemen deciding on the price as supermarkets have to take what is presented to them.

You would think that the Japanese supermarkets would have a conscious and maybe feel a little guilty keeping the price high, if its them, as they see customers everyday and maybe can see the pain or worry on their faces of their customers who have to pay the high prices for rice.

Unfortunately in the market place, such as the rice market, there are those who only think about themselves and not everyone for the good of society, as they too might be operating with very thin profit margins and have no choice but to keep the price high for as long as they can.

The wholesalers and retailers might want to lower the price to help their customers but again because of very thin profit margins they have no choice but to keep the price high as long as they can.

And as they see other retailers begin to finally begin to decrease the price they will do they same so that they won't lose customers or sales.

It's good that more rice will be or has been released into the market, but will it cause rice prices to go down. Maybe yes or maybe no, as with past experience over the past year, prices have not decreased when they should have according to normal supply and demand principles.

It seems rice products might be in sticky price situation, no pun intended, which means when a product is in a sticky price situation, normal supply and demand principles don't work or don't apply to this situation, as something or someone is keeping the price high.

If the supply of rice in 2023 was less than normal or less than expected why wasn't anything done about the supply situation as why it finally manifest itself in the summer of 2024 when there there was an outbreak of decreased supplies that made rice prices skyrocket.

This should have been more rice added to the rice market before the summer of 2024 so that the rice prices could have been normal as much as possible instead its been a constant stress on Japanese families and especially those families with children.

Maybe there was nothing the Japanese government could have done as unfortunately there are always poor growing seasons and poor harvest, but at the same time, maybe they could have prevented supply problem by using more foreign rice and or releasing their government rice supplies much sooner to prevent the shortage of the summer of 2024.

But then there was the potential earthquake warning in the summer of 2024, which caused many Japanese customers to run to the supermarkets and they tried to buy as much rice as possible which made the rice shortage even worse.

Have a nice day!

Japan Rank and Quality of Life: Updated April 20, 2025.

Japan ranks lowest in quality of life satisfaction among 30 countries: happiness survey

Article Source: https://mainichi.jp/english/articles/20250410/p2a/00m/0na/010000c

Ideas:

Having traveled to Japan over the past 25 years it seems many Japanese people always look like they are unhappy or not enjoying their lives. Yes, this is just an observation, but to be fair it might just be a big city phenomenon where people don't smile much and just go about their business. We might see the same thing in London, Paris, or New York.

At the same time, most Japanese people might be more stoic and don't show their feelings as much as other societies.

Different cultures and different societies have different definitions of happiness and maybe happiness Japan is not the same as happiness in the Netherlands.

So it's not easy to compare apples and oranges for lack of a better example as different societies have different values for happiness.

For example some societies might prioritize work as the most important variable while other societies might prioritize their free time as more valuable.

Some might prioritize how much money they make as being a variable for happiness while some societies might have money farther down their list.

Its well known that the Northern European countries usually have the highest level of happiness while countries like China, South Korea and Japan usually have the lowest levels of happiness.

A lot has happened since 2011 when maybe more Japanese felt more happy, but in the past 15 years, Japanese society and the Japanese economy has gone through some significant changes.

For example the Japanese economy has been stuck in a stagnation mode for a very long time with little or no economic growth.

Company wages for a very long time were stuck too with no real wage increases until a year or two ago.

And then there was the pandemic and then inflation which has kept Japanese households from maybe being able to do what they want or even need to do.

India is an up and coming economy that moving quickly up the ladder and might pass Japan this year or next as the 4th largest economy in the world.

The Netherlands traditionally has always been a happy country like the Northern European countries as they all have very good social systems that take care of their populations.

Both Hungary and Turkey might be considered quasi-dictatorships so their populations might not be too happy.

South Korea has always been unhappy for many reasons. It's a very competitive country and has one of the highest suicide rates in the world due to the fact people are always comparing themselves to each other related to school grades, jobs, income, looks and so on.They basically are never happy and are always striving to keep up the with Kims, Parks or Lees.

Yes, the past 15 years have not been a good time for Japan, as inflation has been on-going there for a very long time which means prices just keep going up and up.

For the 60's, 70's, and 80's Japan might have been the envy of the world with it strong economic growth but ever since the asset bubble bust in 1989, the Japanese economy has been stagnant with very little growth which might mean less good jobs and less wage increases for many workers.

In Japan work is an important variable and if work has  begum less important or less valuable to many in Japanese society, its not surprise they are not feeling good about their work which used the be one of the most important variables in society.

Family might be the main variable that might be keeping Japanese society from being completely unhappy, as some might say being able to form relationships at work or school is very difficult these days.

It's very sad that Japan has been reduced to only 13 percent feeling a level of satisfaction with life.

It's quite possible that Japan has adopted the same variables that South Korea has of status of job, level of income, who your friends are, the status of the university you went to, your looks, and comparing yourself against everyone else to determine your level of happiness.

South Korea has been at this level for many years and now maybe Japan has succumbed to the same variables for happiness has South Korea has.

Again, unfortunately, South Korea has one of the highest, if not the highest suicide rates, in the world due to many of these variables.

If a country's citizens don't have any hope they will not have any kind of optimism for the future. It's quite possible Japan needs a complete paradigm shift in how it approaches things such as work and work/life experiences.

For a long time, work was the central variable for happiness in Japan, but maybe over time that variable has been eroded to where work is meaningless to many now in Japan.

For the past 30 plus years maybe a negative mindset has set in and many Japanese don't see any way to improve their lives other than just go to work come home sleep and go back to work to a job they might not like much.

There is no easy answer to fix the situation as there might be many reasons why Japanese society has become very negative compared to other countries.

When a society places its happiness based on one or two variables such income or type of work they do, they can easily become unhappy or disenchanted with life if they don't have any other variables to fall back on.

This maybe is what has happened to Japan, as, again, work or the job , or level of income, has been the major variable in Japanese society and they haven't learned how to enjoy other types of variables in  their lives.

Have a nice day!

Japan Bankruptcies: Updated April 14, 2025.

Japan bankruptcies in FY 2024 top 10,000, highest in 11 yrs

Article source: https://mainichi.jp/english/articles/20250408/p2g/00m/0na/034000c

Ideas:

Its unfortunate that any business has to go bankrupt, but that is part of the market economy in there some that do really well and some that don't do so good.

Besides a lack of sales or a lack of profit there are other reasons that companies go bankrupt such as labor shortages, not able to find the workers a company needs and the price prices of raw materials which many small companies have very thin profits margins to work with.

In Japan the labor shortage is especially difficult to overcome and now workers have many choices to choose from and if a company can't pay what the wages workers need or want they can't get the workers they need. 

It might be even more of a challenge in the rural areas of Japan and or in the areas that there is not a metro area for young workers to go to.

It very possible the number of bankruptcies in Japan of small companies might be a good indicator that the Japanese economy is not trending in the right direction. But at the same time, many times, bankruptcies are a sign of a market adjustment meaning there might have been too many companies of some sectors and the market is just adjusting to make sure supply and demand are in some kind of equilibrium.

Unfortunately market adjustments affect real people and companies are made of up real people with families and 10,144 bankruptcies is way too many and those 10,144 now will probably not participate in the Japanese economy, and it should be remembered no company is an island as every company is involved in some kind of supply chain or some kind of connection to other companies that might be affected too.

While the special tax deferral measure were good and very needed, maybe there should have been a measure that allow these small companies to continue on with some kind of other government assistance.

Small companies make up the bulk of any economy and not just Japan's economy,  with 89.4 percent of the total companies going bankrupt, what kind of message does that say to entrepreneurs in Japan who want to start a business. What does that say about their chances of survival and the Japanese government, if they haven't already, should do all they can to help and support small businesses with less than 10 employees.

It might be a guess gut of the 3,398 companies in the service sector that went bankrupt, many of them might have been mom and pop retail stores, which have very thin profits margins and the economy being the way it is maybe they couldn't afford to buy new products and or the demand for their products just wasn't there.

There is always the idea that maybe they couldn't increase wages to keep their employees or higher new employees, as again, as there is a labor shortage, workers have a choice and can easily change jobs or find new jobs.

And with the construction sector there is the possibility that young people in Japan don't want to work in the construction industry as they prefer, if qualified prefer to find jobs with large Japanese companies.

And of course because of the increase in raw materials, some construction companies might not have been able to buy the materials they need as maybe their profit margins are just too thin.

In an economy there are always going to be sectors that do better than other sectors and maybe on this occasion the logistics is doing much better than other sectors. as maybe they are able to find the workers they need and have the profit margins needed to even increase their wage to attract new talent.

But even at 424 cases there could be many reasons a company might go bankrupt such as low demand for their services, less than good skills doing business and there is is always the idea of the market adjusting the supply of logistics firms in the market.

Have a nice day!

Japan Trade Balance: Updated April 9, 2025.

Japan logs 4.06 tril. yen current account surplus in February

Article source: https://mainichi.jp/english/articles/20250408/p2g/00m/0bu/010000c

Ideas:
Because Japan the Japanese economy is heavily focused on exports, the Bank of Japan and the Japanese government are always watching the current account situation. 

A countries current account is like a persons bank account as exports put money into the current account and imports take money out of the current account.

The weak Japanese yen might have increased the current account as the weak yen increases the profits of export companies so there might have been surge related to the weak yen along with maybe a strong demand for Japanese cars.

The decrease in imports might be due to the Japanese yen becoming a little less weak which means import prices were not a high as before.

But overall it might have just been a strong demand for exports as the country's good trade, meaning most products, had a lot of demand for them. 

Japan is resource-poor country and has to import much of what is needs and if the Japanese yen is weak it causes import prices to be even higher than usual.

Again, even primary income benefits from a weak Japanese yen as a weak yen improves investments overseas. As the Japanese yen is weak there might be even more investing in overseas markets than if the yen were stronger.

Before today there might have been some concern related to the current account and exports and the potential US tariffs. 

But T, the US president , today, instituted a 90 day freeze on the tariff situation, claiming many counties were willing to negotiate with the US administration on new tariffs.

So for now Japan might not have to worry that much about US tariffs and the current account situation might be stable for now. At least for the next three months.

If Japan had to deal with the US tariffs in the future Japanese exports, most likely Japanese cars, and their demand in the US might decrease a lot which means the current account could face challenges like its never seen before.

The current account brings money into the Japanese government and it decreases a lot that could potentially mean the debt to GDP ratio could be even worse which is the highest among OECD countries.

Have a nice day!

Japan's Real Wages: Updated April 10, 2025.

Japan's real wages fall 1.2% in February, down for 2nd straight month

Article source: https://mainichi.jp/english/articles/20250407/p2g/00m/0bu/005000c

Ideas:

Real wages is what matters as it is the amount that households/consumers can use in the economy while nominal wages are wage plus inflation which can be a distorted number or not a true number for households or consumers.

At the same time the 289,562 yen might just be an average amount as there might be some above and some below that amount, as the Japanese economy has a lot of income inequality at this time, which illustrates the difference between the highest incomes and the lowest incomes.

A decrease of 1.2 percent might not seem like that much but if you living from paycheck to paycheck it could be a lot and it you are family of four that could really affect a families disposable income.

It's quite possible or not, that anytime the Japanese government decides to implement subsidies for utility bills, consumer prices increase as whomever is increasing prices due to households having a little more disposable income.

An increase or decrease, however you want to see it, from 4.3 to 4.7 is still a large increase in consumer prices as the 4.3 percent might be too much for many Japanese families, and especially the low-income and fixed income groups.

The Bank of Japan and the Japanese government should not rely too much on wage increases as whatever the large companies offer will not be the same for the small an midsize companies who just don't have the resources needed to match the large company increases.

Up to 70 percent of the Japanese workforce is employed by small and midsize companies which it quite possible, unfortunately, that they won't get the same wage increases as the large company workers, which then means the might be still have to struggle with high prices.

For the large Japanese companies an increase of 5.42 percent is very good as it is close to helping those workers overcome the inflation situation in Japan, but again, the real test is going to be what are the wage increases going to be for the 70 percent small and midsize company workers.

Yes, consumer purchasing power is what is important and will the wage increases improve the purchasing power of all workers in Japan, large company midsize company, and small company workers.

The Bank of Japan might have been thinking about increasing the key rate but with the US administrations on again and off again tariff situation the BOJ just might wait until they know exactly what is going to happen.

Inflation continues to hurt real wages in Japan as workers are probably thinking when is it going to end as ever since the pandemic inflation has been part of the daily life of most Japanese households.

And the real challenge is if real wages continue to decrease in both small and midsize companies then most likely their worker's disposable income is decreasing which means there is or will be less consumer spending in the Japanese economy.

Wage increases while implemented in April of each fiscal year and seen in monthly paychecks might not be enough for all workers as it has to be a concerted effort for all companies if there is going to be a increase in consumer spending which is needed to improve economic growth.

If only 30 percent of workers in Japan get wage increases that are enough and the other 70 percent don't that means there is not going to be enough consumer spending in the Japanese economy to increase economic growth.

And again, depending on what is going to happen in the US, the Bank of Japan is probably going to wait at least three months to see what the US is going to do with with the tariff situation.

Have a nice day!