Japan August Industrial Output: Updated Oct. 1, 2025.

Japan's August industrial output falls 1.2% on sluggish demand for PCs

Article source: https://mainichi.jp/english/articles/20250930/p2g/00m/0bu/011000c

Ideas

Japan is still heavily focused on industrial output as manufacturing is still a significant economic activity in Japan. 

While many economies have transitioned to a more service based economy, and Japan too, manufacturing is still a key part of the Japanese economy.

The problem or challenge is it seems like, while services and technology are strong economic activities, manufacturing in Japan is still a significantly important part of the Japanese economy.

An index number of 100.9 is still good but maybe some might want to see a higher index number that represent better output of manufacturing in the Japanese economy.

For a very long time, software and services were not considered significant company endeavors in Japan as production of hardware was the key endeavor for a Japanese company.

Its only been recently that software, services, and technology have taken root in Japanese companies.

Manufacturing is usually never a 100 percent upward linear activity as there are always going to starts and stops related to material shortages, equipment maintenance, and the the normal up and downs of supply and demand.

For example during the pandemic there was supposed shortage of semiconductors which affected Japan manufacturing significantly and even globally.

And then there is/was the Toyota group mishap related to testing quality control which caused the shutdown of some of the Toyota group production lines.

The personal compute sector is very competitive market and Japanese personal computers have been losing market share to other companies such as as those in Taiwan, China, South Korea, then of course Apple which has a significant market share related to personal computers.

All 15 of the industrial sectors are never going to be positive at the same time as there are going to some that are positive and some that are negative as with the sectors overall in an economy there are going to be some sectors that are positive and some that are negative.

It could be, that at this time, very difficult to accurately measure how much the effects of the tariffs are having on the Japanese economy as maybe Japanese companies are absorbing any increases in tariff and trying to maintain production levels the best they can.

And again, at the same time, it could be US car dealerships are trying keep prices down the best they so that US consumers are not going to feel to put-off with the higher prices that potentially the tariffs could bring.

Industrial output in Japan is not just exports to the US but also the production of many other  different products that are also used in the Japanese domestic economy.

But at the same time, exports to the US are a significant economic activity and it alone might be considered an economic growth engine for the Japanese economy.

An increase or decrease in industrial shipments could be a good indicator of increased growth in demand for some Japanese products.

And the same with inventories but the inventory category needs to be taken with a grain of salt as inventories either increased or decreased could related to estimates that were correct or not correct depending when they were done.

Have a nice day!

Toyota Global Sales: Updated Oct. 8, 2025.

Toyota global sales up 2.2% in Aug. on solid US demand

Article source:  https://mainichi.jp/english/articles/20250929/p2g/00m/0bu/026000c

Ideas:

Perhaps in August sales were not affected by the tariff situation yet, as maybe companies either hasn't seen the tariffs and or have begun to absorb some of the tariff costs.

The Toyota Motor Corp. is a major economic driver of the Japanese economy and especially with exports to the US as either the largest or second largest economy in the world next to China.

Most likely, as the Toyota Motor Group is one of the largest auto companies in the world and probably has enough resources, if needed, to absorb the tariffs, but most likely they will deflect some or all of the tariffs to their auto dealers in the US and make the US dealers deal with the tariffs.

The reason for deflecting the tariff is to keep shareholders happy and make sure the profits and earnings are where shareholders want them to be and force the dealers to handle the tariff situation.

But that might be less sales in the US but it might not be a problem for the Toyota Motor Group as they might only be concerned with overall export sales to dealers in the US.

Car sales in the US might still be somewhat elastic or even inelastic meaning price may or may not be a major consideration for US consumers.

And it might be dis-heartening for T as imports from Japan continue to pour into the US as T is trying to reduce the trade deficit which is kind of like putting your finger into a leaking dike as the trade deficit is never going to be reduced as the US economy is just too big of an economy to go without imports from other countries.

As long as there is robust demand for Japanese car, especially Toyota cars, Toyota doesn't need to worry that much about the tariff situation. 

Yes, Toyota might see a slight drop in sales, eventually, and a slight drop in earnings, eventually, but Toyota might not be too concerned at this point.

The electric vehicle market in China is big and getting even bigger as there are a lot of Chinese companies now in direct competition with Japanese cars in China.

And Chinese government is trying to go all out to reduce car related pollution with the push toward environmentally friendly vehicles and many Japanese and European car dealers are making more cars that are environmentally friendly now.

This is a good example of how inter-connected the supply chains for car manufacturing is globally as tsunami warnings in or near Russia, whether car parts produced there or not, can cause ripples and delays in the supply chains for example from manufacturers in Hokkaido in the northern part of Japan.

Cars, much like smartphones have thousands of miniature parts and can potentially be produced anywhere in the world which makes the supply chain efficiency even more important these days.

Its much easier to produce in the US, not because of the tariff situation but because of the significant increase in shipping costs these days from Japan to the west coast of the US.

The decrease in production in China might be related to the competition of Chinese car manufactures gaining more of the Chinese market related to electric cars as the Chinese government probably give Chinese car makers subsidies to manufacture and sell electric cars now.

Yes, the certification scandal related some of the subsidiaries of the smaller car makers with Toyota might have slowed down production and the sales of the smaller car manufacturers but not seem to be back as full strength.

Nissan has dug itself into a huge hole and it's going to take some time before it can navigate itself out of the challenge its in now. It might see its sales and profits decrease for a year or two but once it sorts through the mess it should come out it with fewer problems.

And yes, Nissan too has taken advantage of the trend in China for more electric vehicles so they too has seen sales increase there.

Maybe the glory days or boom days or years for Japanese car manufacturers are over as more and more car manufacturers globally are making better cars that consumers globally want and need.

China, Indonesia, and Malaysia have growing middle class consumers who are looking for the best cars they can find and are not satisfied, these days with any of the cheaper cars that car makers might have given them in the past.

It's interesting that Japan has so many car manufacturers as it might have seven or eight companies but some of the smaller companies might actually be subsidiaries of the large companies of Toyota, Nissan, and Honda.

Its worth noting that that the larger car companies didn't resort to a zero sum game or force the smaller car companies out of business, as it seems the larger companies might have absorbed the smaller companies into their overall company portfolios.

This seem to make good business sense as why do companies force other companies out of business when it might be better to bring them into the larger company group and find ways to improve business for all concerned.

But the corporate structure and mindset of Japanese businesses and US businesses is much different as in Japan, companies might focus more on cooperation while in the US its an all or nothing approach especially when it comes to shareholders and what they want.

Every car market, globally, is going to have its ups and downs as some markets, such as the US might grow a lot in a quarter or year, while a market such as China might its grow be up and down depending on what the Chinese government it doing from day to day with relation to subsidies.

The positive side is when one market is down its possible other markets might be up, so its good for Japanese car companies to be in as many markets as possible with efficient supply chains for the markets and the car manufacturers.

Have a nice day!

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Japan Prices Increased in October: Updated Oct. 7, 2025.

How will our daily lives in Japan be affected by price hikes, min. wage updates from Oct.?

Article source: https://mainichi.jp/english/articles/20250926/p2a/00m/0bu/031000c

Ideas

All of these prices changes in Japan are probably just a normal reaction to continued inflation which has been a part of the Japanese economy since the beginning of covid.

For a very long time in Japan many companies refused to increase prices fearing they would lose too many customers. But now, as company profit margins continue to be thinner and thinner companies have no choice but to increase prices.

And then there is the idea that some companies are increasing prices as they see other companies increase price so why shouldn't they too increase their prices.

Elderly co-payment will rise while relief measures will end Price hikes for food and beverage.

It's unfortunate that the elderly have to be subjected to continued price increases even if it's only a small amount. Many of them are living on fixed budgets and any increase in costs can give them a lot of un-needed stress in their lives.

There is no empathy among insurance companies as they want to get as much as they can even among the most vulnerable in a society.

The insurance industry, globally, can be considered one of the worst cartels in the world only out to get as much as they can from anyone.

Again, for a very long time, many Japanese companies refused to increase prices and the feared losing too many customers. But those days seem long gone as the increase in raw material costs, including bottles for drink companies, continue to increase in Japan ever since the pandemic.

And then there is the idea of keeping shareholders happy as Japan has become like any other advanced economy only thinking about shareholders and not a company's customers or their employees, which is another reason to increase prices to maintain or increase shareholder value.

Maybe its inevitable that prices are increasing in Japan again after many years of the Japanese economy being in a deflation state and or stagnant stage and now that the economy is finally beginning to see signs of life again prices are beginning to increase as they have for the most part the past three years.

And there is the ideas as prices increase, wages increase and everyone might be better off as Japan's GDP grows exponentially but that may or may not be happening in this economy just yet, as there seems to be too much inequality among large, medium, and small companies.

There seems to be a state of have's, the large companies, and the have-nots, the small and mid-size companies that is polarizing the Japanese workforce into two groups and if not yet, it will begin to show-up in the spending habits of the two groups.

Mandating 'flexible work styles

Japan has some of the most rigid work schedules among advanced societies and the changes listed are not going to be easy to implement as workers are reluctant to take days off and other required or needed times which are now a part of everyday work schedules in many advanced economies.

The only other country with a more rigid work schedule is South Korea, but to South Korea's benefit they too are looking to try and change the rigid work schedule including many more hours than other OECD countries have.

It's not like some Japanese workers don't want better working conditions or better flexible work styles as unfortunately there is still a group mindset and workers are reluctant to go against what the companies needs or wants, as they might be seen as being dis-loyal to the company which could hurt their chances for promotion in the company.

Minimum Wage increases

There positives and negatives related to a minimum wage increase as companies usually hate it but workers of course need it.

But again, its unfortunate that a supposed rich country like Japan can't seem to find the courage or empathy to increase the minimum wage to the living wage category so that everyone is a society can feel like they have live normal like many of the Northern European countries citizens feel.

Many of the workers on minimum wage in Japan, like other countries might be university students working to help pay their university tuition and or pay their rent costs

But some are unfortunately un-married women with children who can barely afford to put enough food on the table to take care of their families or children.

Auto insurance rates will also see hikes

Insurance companies have to make a profit too and some or many insurance companies, globally, have taken advantage of their customer and actually have forsaken their customers to keep their shareholders happy but increasing the prices of their premiums when many families can't afford the high cost of insurance these days.

Insurance companies give all kinds of excuse to increase their premium prices and if they hear or know other insurance companies are increasing prices they do the same thing.

Again, unfortunately, the last group they think about is the customer as they are always trying to maximize profit for the good of their shareholders.

So anytime there are increased costs or natural disaster or anything that might increase the pay-outs to their customers they will find an excuse or reason to increase their premiums again to keep their shareholders happy as the expense of their customers.

Its a sad situation but that's reality unfortunately even in Japan.

Have a nice day!

Japan Real Wages In July: Updated Sept. 28, 2025.

Japan's real wages in July revised down, fall for 7th straight month

Article source: https://mainichi.jp/english/articles/20250926/p2g/00m/0bu/049000c

Ideas:

Real wages are always affected by inflation and the Japanese economy ever since the pandemic has been constrained by consistent inflation, which of course lowers the purchasing power of Japanese consumers.

Wage growth has been a challenge for the Japanese economy as, for the most part, Japan's wages are much lower than other advanced economies and has again been constrained by consistent stagflation and near zero GDP growth for a very long time.

Japan, traditionally, gives two bonuses a year, which may or may not make-up for the lower wages in Japan. But as inflation has even hit companies in Japan summer bonuses sometimes are not what Japanese workers expect which of course means less spending in the Japanese economy.

There is the possibility, that when Japanese companies increased wages in April, which is the normal fiscal start of the new year in Japan, that companies might have depleted any extra funds needed for the traditional summer bonus.

And it must be remembered that up to 70 percent of Japanese workers don't work for the name-brand large Japanese companies but work for small and mid-size companies that don't have the needed resources to match what large Japanese companies give in wage increases, which again might mean less spending in the Japanese economy.

Nominal wages are really not important as they are not adjusted for inflation which means real wages are whats important for a consumer as real wages can determine what a workers purchasing power is or how much they can actually spend in an economy.

And to be sure, consumer spending in the Japanese economy has been constrained for a long time due to consistent inflation in Japan, and consumer spending makes up about 50 percent of Japan's GDP, which is probably not high enough to really improve economic growth.

Again the nominal increase wages just indicates how much inflation has increased in Japan which means that inflation has not decreased much and has put a constraint on much of the Japanese economy and especially again consumer spending in Japan.

The Japanese consumer price index has consistently, ever since the pandemic has been higher than normal or what's good for an economy and its consumers.

As was noted in previous articles even though there were gains in real wages but due to inflation being consistently higher than wage increases they were still not enough to overcome inflation in Japan. which again means consumers in Japan were less better off as wages haven't been able to help the average Japanese consumer with any extra disposable income needed to spend in the Japanese economy.

And again, it must be remembered that only about 30 percent of the Japanese work-force works for the large name-brand companies in Japan. The other 70 percent of the work-force work for small and mid-size companies which don't have the needed resources to pay the same wage increases which means that maybe 70 percent of the Japanese work-force might not have the needed disposable income to spend in the Japanese economy to help the economy grow.

Have a nice day!

Spending in Japan: Updated Sept. 29, 2025.

Clothing, footwear spending in Japan in 2024 halved from bubble-era period

Article source: https://mainichi.jp/english/articles/20250925/p2g/00m/0li/017000c

Ideas:

Consumer spending in Japan has always been a challenge is the Japanese just don't spend like US consumers do as the Japanese, for the most part, are more savers than spenders.

Being a saver is good for the individual or family but not good for an economy as for example businesses that save are good for a business but not good for investments or spending in an economy.

Back in the day during the 1980's economic boom in Japan spending might have been out of control or there was a lot of spending maybe thinking that the boom could last forever, which of course it didn't.

Strained budgets are been a part of the Japanese economy for a very long time, as for example many Japanese companies, in the early 2000's decided to limit wage increases for their workers.

As a result, as normal, Japanese workers began to cut-back on their spending which might have caused the Japanese economy to become stagnant and not grow with eventually resulted in deflation.

Only recently, the past two years have Japanese companies have begun to loosen the purse strings have begun to increase wages to help improve the economy and or from pressure from the Japanese government to increase wages to help the economy grow.

Yes, for the most part, except for needed essential clothing, clothing can be considered important but not an essential product to buy every week or every month but just once or twice a year at the most.

And yes, food is very much an essential item and needs to be bought every day or every week as needed, depending on a families style or an individuals style, as some Japanese families might be fresh food every day at the local supermarket and or some might bu bentos or boxed meals as needed as they go home from work.

Yes, as Japanese consumer begin to see less and less in their disposable incomes they might see the need to find clothing bargains and or seek out clothing stores that offer prices which match their budgets.

Today's Japanese mindset among consumers maybe now are getting used to the idea of flea markets and secondhand clothing as needed to keep their budgets from getting too bloated due to increased inflation in Japan.

And yes, fast fashion companies such as GU, Uniqlo, and maybe Zara and H&M are good places to buy as they might be better alternatives than the more traditional clothing shops in Japan.

The traditional clothing shop in Japan, while providing high quality products might not be the best choice for the average Japanese family these days.

And yes, the upper-middle class and other groups might still buy from the traditional high-priced shops but now they might be out of reach for again the average Japanese family of even the lower-middle class family that can't afford to go to Ginza and from the ups-scales stores  in some places in Tokyo.

The spending habits of the average Japanese consumer is changing like it is in many countries globally these days and companies need to be aware that what is good today might not be good tomorrow as consumer spending habits and tastes are are always changing.

Have a nice day!

German Companies Relocating to Japan: Updated Oct. 3, 2025.

German companies choosing Japan as Asia manufacturing hub: survey

Article source:  https://www.japantimes.co.jp/business/2025/09/22/companies/german-companies-japan-survey/

Ideas

It's taken a relatively long time for other countries and companies to see Japan as a place for a company's manufacturing and normal business operations as it has been overshadowed by China for a very long time.

China was the king of manufacturing for very long time, and understandably so, but recent developments have maybe dimmed the China light, as companies, and even countries are not loyal as they are going to go to where they can get the best investment return for their money.

Japan might not be the cheapest place in Asia but it might be the most stable place and other countries, and their proximity to China, might be a turn-off for some companies.

Japan is still a manufacturing powerhouse as manufacturing is a a key driver of the Japanese economy next to Japanese exports.

And yes, its seems German companies just don't manufacture German products but Japanese products too which is a good sign that manufacturing companies are not completely loyal as they manufacture whatever is needed to bring profits to them.

There might be many countries now, besides China, that many companies globally want to enter and yes, Japan is not the only country, but again, it might be the most stable country. 

Other countries such as South Korea, Vietnam, Thailand, Indonesia, and Malaysia might be good options too so companies have a choice among Asian countries to establish their manufacturing operations. 

And again, many German companies see Japan as the best place for their operations and yes, some might be considering expanding their presence in Japan instead of maybe some of the other countries listed above.

Japan is a stable place for logistics companies to carry Japanese and German products to many countries globally and they are close to the west coast of the US not to mention close to South Korea, very close to China and close the many Asian countries which would make shipping relatively cheap.

Yes, Japan and Germany don't follow the typical western US model of business relations but value long-term relationships and do take time to develop. But once developed they last for a very long time, which makes for the stability of the relationship.

The US model, for example, might want everything done quickly and quick decision making doesn't make for a solid business foundation which is very important for both Japan and Germany.

Proximity to customers is very important as being in Japan places German companies within proximity of 60 percent of the worlds population in the Asia region.

Stability of supply chains has become even more important as supply chains in Japan give the needed reassurance of operations in Japan.

And yes, unfortunately, political risk has become an important issue affecting global companies and they are looking for countries, like Japan, that have stable business and government environments.

Yes, these days economic stability is becoming more important for global companies as maybe the bright light, that was once China's, as dimmed for many global companies as they look for more economic stability these days.

And again there are many other countries, in Asia, that German companies can consider but Japan, once again, seems to be the most stable related to government and economic stability these days.

Japan is not a perfect country, as there is no perfect country, but the key qualities it has might be slightly better than some other countries in Asia.

And yes, as far as reliability goes, Japan might be the leader in reliability as other countries seem to slip a notch here or there in the reliability rankings.

Japan does have some challenges with talent acquisition and retention, but it depends on what is the definition of talent and what is the real definition of retention especially as it relates to Japan.

For example, there might not be enough qualified Japanese workers for the type of skills that German manufacturing companies need and maybe some Japanese workers don't want to work in manufacturing. 

However, manufacturing today might not be labor-intensive work that was done 50 years ago, but now requires almost the technical skills of an IT worker as manufacturing jobs now are heavily involved with automation and robotics.

That's where Japanese immigration goes into play as there many workers, with IT skills to work in manufacturing in countries such as South Korea, Thailand, Vietnam, Indonesia and even China.

But the challenge is Japan immigration is still somewhat closed off to many of these skilled workers who want to work in Japan.

Yes, Japan has an English deficiency problem as the average Japanese just doesn't have the needed English skills needed for the jobs that German manufacturing companies need.

And again, maybe some Japanese high school or university graduates don't want to work in manufacturing as they might see those jobs being low level skilled and or don't pay that much compared to working at name-brand large Japanese company jobs.

This survey just points out that Japan is a very good place for a company to have a manufacturing plant in as its a very stable country to be in.

There are some challenges related to staffing and the perception that manufacturing is a labor-intensive job that many young workers might not want to do today.

But manufacturing has outgrown its days of being a labor-intensive occupation but is now actually a significant high tech industry of innovation with robotics and automation as its key components that requires highly skilled workers.

If the Japanese government can figure out how to leverage its soft-core advantages and open up immigration for the good of the Japanese economy who knows how far or much the Japanese will grow in the future.

Have a nice day!

OECD Economic Growth: Updated Sept. 29, 2025

OECD lifts 2025 growth outlook on front-loaded output before tariffs

Article source: https://mainichi.jp/english/articles/20250924/p2g/00m/0bu/003000c

Ideas

Yes many countries are going to increase production and or trade before US tariffs come into full effect as way to beat the tariff situation the best they can.

Maybe, as its known now, international trade is not going to be the same, at least for the time being, and or a more liberal leaning president in the US, who understands international trade a little better comes into power.

It sounds good but an estimate of 1.1 percent in 2025, might be a little too optimistic as the Japanese economy usually doesn't even grow that much, but it might happen if the data is correct.

Firm investment is actually part of Japan's GDP so it might be possible that companies have decided to invest as they might feel the Japanese economy is going to grow in the future, despite the tariff situation.

Japan, like most advanced economies now, place a lot of emphasis on corporate earnings as Japan has become more of a western style market economy with stockholder value at the core of many large name-brand companies these days.

The growth of China has been a little less than usual as 4.9 percent is not where it usually is but that's normal for a growing economy as the more it grows, overtime, it begins to grow less and less, and a country needs more resources to continue to grow.

And as usual, like many countries or economies, fiscal spending is used to help the economy grow at times.

Yes, front-loading will not last that long and when the tariff situation actually goes into effect many countries might begin to see investments and trade begin to decrease.

Of course not all trade and investments will disappear but over time there could be a substantial decrease from quarter to quarter or even year to year, which potentially could see many counties' GDP's decrease.

Recently it seemed in the US big tech was spurring the US economy but due to the tariff situation that might change as even big tech in the US is going to be effected by the tariffs.

And US immigration is going to be effected with unfortunately high-skilled labor needed by high tech companies are going to see a significant decrease in workers form countries such as India and China. where many of the high tech workers come from.

The US, overall, just doesn't produce enough high tech workers to meet the needs of US high tech companies, and has been noted, innovation, potentially, is going to suffer in the US.

Yes, despite all of its challenges, the US economy is still the envy of the world. Yes, China is big and somewhat growing but it still can't match the US economy.

Even at 1.5 percent growth for a so-called mature economy its still a growing economy as it hasn't settled into a real mature economy yet for example Japan has or many European countries have, with little or no growth.

Have a nice day!

Japan CPI In August: Updated Sept. 22, 2025.

Japan's CPI in August rises 2.7% on high food prices

Article source: https://mainichi.jp/english/articles/20250919/p2g/00m/0bu/007000c

Ideas

The pace of increase might have slowed but for sure food prices are still too high in Japan for many Japanese families and especially the lower-income groups.

Maybe for most middle-class families the price of food is too high too but for the upper-middle class they might not notice the high food prices too much depending on the what they buy.

And definitely the fixed-income groups living from month to month on their pensions food prices are just too high at they have to use even more of the total income to buy for food.

The Japanese government needs to find a way to keep energy prices to a reasonable level and or find a way to get some energy trade agreements that can ensure normal prices for coal, gas, and oil as Japan, unfortunately, is a resource-poor county and has to import much of what it needs.

Subsidies are both a positive and a negative as someone gains from the subsidies and someone has to pay for the subsidies.

The average Japanese family of course gains from the subsidies by paying less but again, either the importers, the wholesalers might not get the benefit of the subsidies and usually the government might pay for the difference between the actual cost of the energy and what the subsidy offers which means the government debt could increase even more.

Core CPI is probably still too high for most Japanese families even though it has decelerated in recent months. It should be remembered that its possible that it has decelerated by government of intervention with subsidies and not because of normal market activity.

Again, government subsidies might be needed help, but they can't be relied to fix everything in a economy where prices might be too high or out of control, as too much government intervention in a market economy disrupts the normal flow of economic activities.

Japan has had continued inflation its seems since the pandemic and it hasn't subsided that month except for maybe in the past few months, but at the same time its probably still too high for most Japanese consumers.

Prices for food, excluding fresh items, might be most processed foods might have to be imported which means they are subject to a weak Japanese yen, which means the price of processed food might be too high.

And then there is the global challenge of chocolate and coffee beans which are seeing prices globally at or near all time highs in most economies.

Rice is a major staple for the average Japanese diet and its strange that rice prices became almost out of control for a year and whomever were unable to control the price of rice in the local supermarkets and stores.

You would think, with rice being such an import food product in Japan that again, whomever, would keep it under control with the supply always be enough to not cause shortages in stores or supermarkets.

Eggs are a product that is always subject to either the weather and or animal diseases and challenges which can affect supply and demand of the product.

There are some food products, if possible for the good of society, that should not be subject to the challenges of supply and demand and if possible, the prices should be kept steady with both government and the market finding ways to keep foods such as eggs, milk, bread, rice, and some meat at levels that all families can afford.

Service companies usually have very thin profit margins which means they have very little room related to increases in material costs, energy costs, and especially wage increases.

And most likely service type companies are the first to increase prices and or pass-on their cost to the next in the supply chain which usually means the final retail customer.

Government subsides are good and might be needed in cases where the market is unable to control the price of some products or commodities such energy prices to due external factors.

But they should be used sparingly, if possible, as not to disrupt the normal flow of a market economy as subsidies can distort what is actually happening in an economy over the long term if used too long.

Most central banks, including the Bank of Japan prefer to keep inflation around 2 percent as most feel 2 percent is where the economy is moving at a good rate of flow and if inflation is too low it might indicate there is not enough economic activity in an economy and if its too fast it might mean an economy is moving too fast as might be considered and over-heating economy.

Have a nice day!

Japanese Exports: Updated Sept. 24, 2025.

Japanese exports to US fall 14% in Aug., down for 5th straight month

Article source: https://mainichi.jp/english/articles/20250917/p2g/00m/0bu/025000c

Ideas:

For most of the last 50 years Japan has depended on exports to help grow its economy as, for the most part, exports was its only real economic driver.

Japan should have known, for a long time, that it can't depend on export forever as the US tariff situation is going to significantly reduce some export products to the US.

Japan for whatever reason just hasn't been able to develop and other real economic drivers to help its economy, as for better or worse other industries in Japan just hasn't evolved into an economic driver that can grow the economy.

So might say foreign tourists, with it record numbers, might become an economic driver but so far, while its growing, it hasn't reached the level of a Spain or France yet in numbers needed to be a significant economic driver.

Japan has always been focused on maintaining as positive trade surplus, as while its a resource-poor country, its imports haven't yet reached the level of imports increasing more than exports which would make it a trade deficit county like the US.

The problem is the current account in Japan is dependent on exports to pad the current account, which is like a country's bank account and much of what it needs for programs comes out of its current account, not to mention that the Japanese yen currency situation is related to the current account.

Japanese exports to the US have been it most important export and along with car parts make up as significant part of the exports to the US.

Again, besides Japanese car and Japanese car parts, Japan really hasn't been able to develop any other significant exports that can grow the Japanese economy.

Back in the day, the 1980's for example, Japan had many companies that were global leaders but overtime all of these companies, except for Toyota have slipped and didn't innovate, including Sony and Mitsubishi which are not just shells of their former selves.

While the tariff rate was reduced to 15 percent that is still going to affect exports to the US, and when companies in the US and even Japan begin to pass-on the tariffs to the next in the supply chain including the final customer, customers are going to think twice about buying Japanese products, which is going to affect companies in Japan and of course Japanese workers which means they are not going to spend as much as before in Japan.

While the tariff situation is not so good the real problem is the required investments that countries are required to do in the US and for the most part, its out of control about when and where they can do the investing.

Not to complain or criticize but someone in the US administration just doesn't know or really care about the workings of international trade or international economics.

International trade makes everyone better off and its not a zero sum game where one person win and one person loses, as trade makes everyone better off, but again they of course know it but they don't care.

Yes, the tariff situation could affect many parts of the Japanese economy including wage hikes, future business investment, and or course consumer spending in Japan as Japanese workers might not get future increased wage hikes which means they might not spend as much in the Japanese economy.

For the most part, there is/was no way any country could see this coming a year ago, but it has been known for a long time the current president of the US wanted tariffs for the US economy but never really talked about it that much until this year.

The problem is, again, Japan has depended on exporting to the US for a very long time, and really hasn't been able to develop any other sectors which could help grow its economy.

At one time ship building was a major industry in Japan and as global leader but China and South Korea passed them and its a shell of it's former self.

And the same with semiconductors at one time, Japan was again a global leader but let Taiwan and South Korea gain significant market share related to semiconductors. To Japan's credit it has begun to invest heavily in the semiconductor sector again.

There is always going to be this friction between import and exports, as for the most part, there is never a positive flow related to both as some months imports will be up and some months they will be down and the same with exports.

But for the Japanese economy, as the Japanese yen is weak, its helps Japanese export companies as the weak yen gives them more for the product they sell in the US while the opposite is true for imports and a weak Japanese yen, increases the price of import into Japan, which means imports, most likely, will pass-on the prices increases to the next in supply chain including the final retail customer.

China, for better or worse, just hasn't been the country it was ten or even 15 years ago as many countries seem to be experiencing the same challenges.

But, again, for better or worse, China is still an export powerhouse and it still exports to many countries.

There was a recent article that said many German companies, which have manufacturing plants in China are now looking to move to Japan as they feel Japan is a more stable economy.

While Japan might be experiencing challenges with exporting to China it seems have a robust trade situation with the rest of Asia, as a 25. 3 percent increase in exports is a very significant situation for Japan.

But the same can't be said with the EU, as the EU seems like the sick child for international trade globally.

It could be related to the Ukraine war situation or it could be related to a few countries in the EU and not every county, as there are 27 countries in the EU and some of them might have positive trade situations with Japan and some might not.

Have a nice day!