Japan and Foreign Visitors: Updated September 25, 2024.

 

Number of foreign visitors to Japan tops 2.9 mil., record for August

Article https://mainichi.jp/english/articles/20240918/p2g/00m/0na/050000c

Ideas:

Japan is seeing record numbers of foreign visitors but it has a way to go before it has the same number as Spain of France. 

But to be fair, location might be a challenge, even with improve travel as Spain and France have a big advantage related to location.

Yes, China and the rest of Asia of Asia has a huge population, but there might be travel limitations for some.

There might be some political issue between China and Japan which might be limiting some Chinese travelers as they were the largest group to travel to Japan in 2019 before the pandemic.

It looks like China has regained the top spot for foreign travelers to Japan, as they might have resolved any flight challenges which was affecting travel to Japan.

And regarding the political issues, it seems Chinese travelers have forgotten about the Chinese ban of Japanese seafood imports, as most likely many/most Chinese are eating Japanese seafood in Japan now.

South Korea is a another country with some historical issues with Japan, but it seems like the weak Japanese yen is enough to persuade many South Korean tourists to travel to Japan.

Some might say, in Japan, there are now too many foreign visitors, but tell that to the hotels, restaurants, and other places that lost a lot during the pandemic when Japan was closed off during the pandemic.

The weak Japanese yen has of course been a challenge for Japanese travelers has they have to fight inflation  and also weak Japanese yen when they travel overseas.

Gone are the days, maybe, when hordes of Japanese would travel to Hawaii and other places in the 80's and 90's.

Japan has always been on the side of caution, and sometimes maybe too much, but better safe than something else.

And also it might be because of the 3/11 Fukushima earthquake and tsunami that Japan has become even more cautious and maybe for good reasons.

All of the cancellations because of the quake warning should be enough to remember what happened during the pandemic when the country was closed off and many businesses went out of business and it took many months for the economy to get back to some kind of normalcy. 

Have a nice day!

Japan Cosmetic Sales in China: Updated April 10, 2024

 

SK-II skincare sales hurt by anti-Japan sentiment in China

Article Source:  https://www.bbc.com/news/business-68077984

Ideas:

Boycotts usually don't last long and consumers tend to forget what all the noise was about in the first place.

South Korea had its own not so good situation recently, when many Japanese products were boycotted and even Uniqlo was forced to close some of its stores.

But that was then as now South Korean tourists are heading to Japan in record numbers.

At the same time, there are Chinese tourists heading to Japan, even though there might be some media situations causing the not so good situation.

Again consumers, overall, tend to forget what all the noise is about and they get 

back to buying buying what they like despite all of the background noise.

Unfortunately, much of the noise is media related, such as the conservative or 

liberal media keeps up the noise and people see and hear what is going on 

everyday.

SK-!! is a good example of what companies need to do in jus wait out

the situation, keep promoting the products or brand and consumers eventually 

will come back.

Unfortunately, consumers in some countries tend to get carried away with

boycotts, but most people in a country are far too busy to think about boycotts 

everyday and they just want to go about their lives with not engaging in all the noise.

Most likely, because of past transgressions by Japan in the past, there might be 

situations which happen every now and then and its not easy to solve and the 

media has a role in making sure the situation doesn't continue to be a major 

situation.

Brands always bounce back and sales get back to normal after all of the noise is 

crowded out by consumers who just want to buy they like, despite all of the 

political noise surrounding a situation.

SK-!! tend to be higher priced brand but that doesn't stop consumers from buying 

the brand or product. And even prices increases might not affect the demand that 

much if the product or brand, such as Apple as a example are already higher 

priced and a price increase, for most consumers who like a product or brand 

don't even notice a price increase.

Have a nice day and be safe! 

Japan Trade Deficit: Update April 8, 2024.

 

Japan trade deficit halves to $63 billion in 2023 on record exports

Article Source:  https://mainichi.jp/english/articles/20240124/p2g/00m/0bu/010000c

Ideas:
A combination of increased exports, weak Japanese yen, while maybe energy imports value or prices decreased helped the Japanese trade deficit to decrease.

Japan, and maybe some others are a few countries that seem to be focused on the trade deficit as in the US its not that big a deal.

Auto exports are a key economic driver for the Japanese economy, as an economic driver is any economic activity that increases economic growth.

China is probably still having internal economic challenges and it might take some time for China to workout its current challenges.

Even though China had only 17.76 trillion yen in exports that is still a relatively strong amount, so Japanese companies, overall, don't need to worry about a slight drop in exports to China.

Japan has always been a resource-poor country and needs to continue to imports much of what it needs. As a result, any global surge in energy or material prices, seems to affect Japan a lot and then add in the weak Japanese yen, and import prices increase.

But for exports, a  weak yen increases the profits of exports companies and reduces the trade deficit, which is like a country's bank account.

Even though the Japanese economy might have been in the red for the third straight year, due to high energy and materials costs, the Japanese economy most likely still have a huge bank account and is not going to run out of money.

The US economy, at this time, seems to be the one bright spot in the global economy and it keeps growing. The US has not increased the key rate lately and there is talk of the US lowering the key rate a few times in 2024.

Most likely imports and exports are not volume but value calculations which might be a little different than volume levels, but whether volume or value the record Japanese exports is good for the Japanese economy overall.

Even though Japan has a population of 125 million people. which is a relatively large domestic economic base, Japan is focused on exports as being key a economic driver to grow the economy.

Of course maybe even at 125 million, Japanese companies are unable to grow as they need to focus on the global economy and especially China and the US.

The US, for the most part, seems to be trade deficit economy, as many companies, globally want to sell their products in the US.

The Japanese economy seems to be the opposite and they seem to be a trade surplus economy and always focuses trade surpluses and trade deficits.

Export growth in Japan will continue as a weak yen is good for Japanese companies gives them more profits compared to a strong yen which reduces the profits of Japanese export companies.

China maybe continue to have internal challenges and might be going through a transition period and, again, might need to some time to work out its internal economic challenges.

But from the latest data at 17.76 trillion yen exports to China, Japanese companies don't need to worry too much about China.

The Japanese government needs to find ways to reduce imports costs such as maybe some trade agreements with energy producing countries that can lower the cost of import prices to Japan.

Otherwise, the Japanese economy will continue to have high import prices, as maybe the weak yen will be around for some time in the near future.

Again, Japan is trade focused trade surplus economy, while the US is trade deficit economy, as many global companies want to sell their products in the US. The same can't be said for the Japanese economy, and its not so much about global companies wanting to sell their products in Japan, as its more about Japanese consumers and what they want and need.

The US economy, with its increased demand for Japanese cars, is a good indication the US economy is growing again. If there are any signs of inflation or stagnation or a recession, they are long gone as the US economy seems to be running on all cylinders now.

And that is good for Japan and its export focused companies as they can continue to export a lot despite a slowdown in China.

But of course Japanese companies will continue to focus on China, as its still a major export destination for Japanese export companies.

Japan's trade deficit with Asia might have shrank, but that doesn't mean Japan export companies should be like regular companies and leave a market just because they aren't meeting sales or profit projections.

Asia, overall, is still important for Japan and they should continue to invest in the many Asian markets and continue to do business in them along with continuing to exports to all of the countries.

The European Union is a different situation. Its seems like the European Union, ever since the BREXIT situation has never been the same and maybe take even more time to get back to what it once was.

But again, strong exports related to Japanese cars is again the main driver for the Japanese economy and Japanese export companies.

Have a nice day and be safe!

Foreign Entries to Japan: Updated Jan. 26, 2024.

 

October foreign entries to Japan top pre-pandemic levels for 1st time

Article source: https://mainichi.jp/english/articles/20231115/p2g/00m/0na/029000c

Article:

TOKYO (Kyodo) -- Japan saw an estimated 2,516,500 foreign visitors in October, up 0.8 percent from the same month in 2019, the first time the monthly figure has surpassed levels seen before the coronavirus outbreak, government data showed Wednesday.

The increase of visitors from Asia, Australia, parts of Europe, and North America, in particular, in an environment of a weak yen and resumed airline services contributed to the return of foreigners to Japan, according to the Japan National Tourism Organization.

Visitor arrivals from January to October totaled over 19.89 million. The figure is on pace to reach 25 million for 2023.

Ideas:

While there might be an increase in foreign visitors to Japan, its amazing that the higher airline ticket prices haven't stopped tourists from going to Japan. But maybe it has, even though there are record numbers, the amount might have been even more.

The weak Japanese yen, maybe offsets the high airline ticket prices, as maybe tourists weigh both together and still see going to Japan, despite high airline prices, the weak Japanese yen, is a deal maker.

The record is 30 million in 2019, just before the pandemic shut everything down for a few years.

Article:

The most arrivals in the reporting month came from South Korea at 631,100, more than triple compared with the figure in October 2019. Taiwan came in second at 424,800, up 2.7 percent.

Visitors from mainland China, which used to be the largest visitor group to Japan before the COVID-19 pandemic, stood at 256,300, down 64.9 percent, while they still ranked third in a list of arrival numbers by country and region in October.

After Beijing lifted restrictions on its citizens regarding group travels bound for Japan in August, the Japan Tourism Agency projected arrivals from mainland China would increase along with China's major holidays starting on Oct. 1.

Ideas:

Back in 2019 South Korea didn't have positive feelings about Japan, so the numbers might have much less back then.

Most likely, Chinese tourists will again be the largest group. However, as South Korea in the past or before the pandemic, there might be some who harbor not so good ideas about Japan and especially the Fukushima situation releasing power plant water into the ocean, as now China has a ban of Japanese seafood.

When I went to Tokyo from South Korea, in Feb. of 2023, Japan has been open for visitors for only a few months, and you still had to show proof of three boosters shots, and register on a Japanese website to get approval. At that time, its seemed somewhat confusing as there seemed to be many steps you had to go through. And walking to the immigration area, for maybe 100 to 200 meters, there were foreign helpers every few meters, it seemed, holding signs about what do to and if you had all of the needed paperwork.

In Jan. of 2024 when I went back to Tokyo from South Korea, you only had to show your passport, and they had refined the immigration process, where you show your passport, get your picture taken and do digital finger prints, in an area before the immigration counter, and then you went to the immigration counter and got a 3 month stamp in your passports. A much faster process through Japan immigration.

Article:

But arrivals from China decreased about 70,000 from September.

The slump appears to have been caused by China's slow flight recovery as well as it falling behind in easing travel restrictions compared with many other countries.

Japan's Ministry of Land, Infrastructure, Transport and Tourism, however, anticipates flights connecting the two neighbors will increase.

Ideas:

It seems China is a little behind other countries in finally opening up completely, including the resumption of airline flights and Chinese tourists getting out and about to other countries.

But as Chinese has a huge middle class, who want to travel, it won't take much time for Chinse tourists are again traveling everywhere.

As the Chinese new year is approaching, most likely the numbers to Japan will again get back to normal and maybe again be Japans largest group of foreign tourists.

Article:

Arrivals from the United States rose 38.2 percent to 211,900 from four years earlier, while Germany marked a 17.6 percent rise to 30,900, the highest ever for arrivals from the country in a single month.

The number of Japanese nationals traveling overseas in October stood at 937,700, 43.6 percent less than the same month in 2019.

Ideas:

The weak Japanese might be the main incentive to visit Japan as travel from the US and Germany is not easy as it takes many hours sitting on a plane to get to Japan.

Again, it seems the high airline ticket prices haven't deterred from traveling to Japan.

At the same time, as Tokyo Haneda international airport, near the center of Tokyo, is much closer than Narita international airport, which is maybe 30 kilometers away from Tokyo. As foreign airlines compete to get spots at Tokyo Haneda, it has to be an incentive to travel to Haneda instead of Narita, which used to be the major airport for international arrivals But now it seems Haneda has just a many international arrivals as Narita.

Have a nice day and be safe!

Japan Companies and China: Updated Jan 24, 2023

 

Japan firms vow continued investment in China despite slowing economy

Ideas:

Most likely, China is too much of a continued opportunity to just leave because of current challenges related to the Chinese economy.

The Chinese economy might be slowing, there might be continued challenges with the property sector, and its seems the environment appears to be more challenges for foreign companies.

But that is China. The challenges for foreign companies have always been there, but there have always been dividends to those companies that can navigate the environment and continue to do business in China. 

Its interesting that some or many South Korean companies are leaving China as their sales and profits continue to decrease. It could be the so-called differences between China and South Korea, lingering issues still there.

But its seems, despite the ban of Japanese seafood into China, and a lot of Chinese tourists going to Japan, that the challenges that South Korea isn't strong issues in between China and Japan.

Panasonic seems to be a company that that wants to improve people's lives as some its ads and commercials promote,whether true or not.

It quite possible there are more than 350 Japanese companies operating in China, but maybe those at the expo were mainly companies that import into China and or have manufacturing plants in China.

Panasonic is smart to seize the opportunity to cater to wealthy Chinese retirees, and at the same time a "wellness smart town" which also showcases many of its products.

Muji is a another good company that sees the future in Japan and will continue to invest in China despite the Chinese economy is not where it used to be.

For example China's GDP grew around 5.5 % in 2023, which is much less than it usually grow, but its still very good.

Its interesting that Uniqlo was not mentioned in the article, as Uniqlo also has a large presence in China.

China still has great potential if companies stick to the basics of doing business and know how to navigate the current political environment. 

Japanese companies should ignore the China/US situation and just focus on doing business when in China, and focus on doing business in the US in the US.

Toyota, Nissan, and Honda, need to be more proactive and invest more in electric vehicles as Chinese companies are now maybe the world leaders in electric cars.

But having some kind of joint venture with a Chinese company might be a winning strategy.

Have a nice day and be safe!

Nissan Company: Updated Jan. 20, 2024.

 

Nissan ups full-year profit outlook on weak yen, faces task in China

Article Source: https://mainichi.jp/english/articles/20231109/p2g/00m/0bu/068000c

Article:

TOKYO (Kyodo) -- Nissan Motor Co. on Thursday upgraded its earnings forecast for fiscal 2023, with net profit projected at 390 billion yen ($2.6 billion) citing brisk sales and a weak yen. But the Japanese automaker also said it faces the "immediate task" of improving its business in China.

The profit estimate for the year through next March represents a 75.8 percent rise from the previous year. It was revised from a projection in July of 340 billion yen.

The company forecasts operating profit and sales at 620 billion yen and a record-high 13 trillion yen, respectively, also upgraded from 550 billion yen and 12.6 trillion yen.

Ideas:

Regarding China, the South Korean company Hyundai is scaling back production in China due to increased competition from Chinse car makers. Hyundai used to have 5 plants in China and now they are down to two.

So Nissan might have some difficulties in the Chinese market with Chinese car markers improving.

Back in 2022, and before, Japanese carmakers were having supply chain challenges so maybe in 2023 the challenges have been reduced.

Also, if it was any problem related to company image, maybe they are passed the Ghosn situation from a few years a ago.

Article:

With the weakening yen, it has now set the assumed exchange rate of the Japanese currency at 140 yen against the U.S. dollar and 153 yen versus the euro, revised from 132 yen and 139 yen, respectively. A weaker yen normally bloats Japanese exporters' overseas profits when repatriated.

For the first half ended in September, Nissan reported an over four-fold jump in net profit from a year earlier to 296.21 billion yen. Operating profit more than doubled to 336.74 billion yen on sales of 6.06 trillion yen, a record high and up 30.1 percent.

Ideas:
Nissan might be making significant profits due to the weak yen , but as far as domestic production goes, Nissan still has to deal with domestic supply chain challenges, if it imports any parts for it cars, it like all companies in Japan has to deal with increased energy and oil prices related to imports as the weak yen increases import prices.

The three major car companies in Japan, Toyota, Honda, and Nissan all seem to be well positioned in the global markets to increase in sales and profits.

The real challenge in 2024, is, if the Bank of Japan decides to increase its key rate, which could cause the weak yen to strengthen, which then Japanese exporters could have their profit reduced. 

Article: 

The yen's depreciation contributed to the rise of operating profit by 13.3 billion yen, it said.

Global unit sales increased 3.3 percent for the six months to 1.62 million cars, faring well in Japan, North America and Europe.

But Nissan struggled in China due to intensifying competition and a shift in the country to new energy vehicles such as electric vehicles and plug-in hybrids. In the world's largest auto market, it logged a 34.3 percent fall in unit sales.

Ideas:

Japan might not have a weak yen for much longer, or maybe it will, but Japanese exporters need to plan for when the yen is not so weak. 

But most likely, in recent reports, due to inflation in Japan, the Bank of Japan might not change its ultralow policy anytime soon, which will keep the Japanese yen weak, and help Japanese exporters.

Regarding China, four new Nissan models might help in the Chinese market, but maybe not, as Chinese car makers seem to be ahead in the EV markets, as again, Hyundai, which makes EV cars seems to giving up on the Chinese market, with closing 3 of its 5 plants in China.

It will be interesting to see what Toyota, Honda, and other car makers such BMW are doing in China with increased competition from the Chinese carmakers.

Article:

To reverse the slump, Nissan said it plans to release four new models of new energy vehicles in China starting in the second half of 2024.

"By implementing our plans rapidly and reliably, we hope to improve our performance and put it back on track toward growth in the challenging Chinese market," Nissan President Makoto Uchida said at an online press conference.

The automaker maintained its full-year global sales target at 3.7 million units.

Ideas:

Again, four new models might help, but will it sway the average Chinse consumers to buy a brand that is not Chinese.

Some suggest, there are now not so good relations between China and Japan, and will it affect Chinse consumers from buying Japanese cars.

But, to be fair, Chinese tourists are still coming to Japan in large numbers despite some not so good relations between the two governments.

The same situation is happening in South Korea, with many South Korean products, which used to be popular in China, are losing significant market share, such as South Korean cars and South Korean cosmetic brands.

Have a nice day and be safe!