Japan Trade Surplus: Updated March 23, 2025.

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

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

Ideas:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Have a nice day!

Japan Industrial Output: Updated April 16, 2024.

 

Japan's 2023 industrial output falls 1.1%, down for 2nd year

Article Source:  https://mainichi.jp/english/articles/20240131/p2g/00m/0bu/013000c

Ideas:

A decrease of 1.1 percent is not much, but of course, for investors who are obsessed over every percentage point it might be important.

Demand for semiconductors are both a positive and negative, as the semiconductor industry has been going through periods of logistics and supply shocks the last few years.

The Chinese economy is a different situation, as it seems to be going through a transition or restructuring period, and it will take some time for it to solve.

Japan seems to place a lot of emphasis on industrial output as its related to Japanese export companies, and if industrial output is down, exports might be down too.

In a market economy, not all sectors or industries are going to be positive and there are gong to be some positive sectors/industries and some negative sectors/industries. 

The Japanese car market as been up and down the last few years due to the logistics and chip shortage. For example, in 2002, it was noted that it was taking up to six months to get a new car in Japan, once ordered.

Chips are used by everything electronic now days and maybe chip manufacturers were caught off guard about the increase in demand for chips needed for many different products.

The semiconductor market is very diverse and almost every kind of electronic device uses chips today.

The US and Chinese economies, at the present time, seem to be headed in different directions. The US economy seems to be headed in the right direction, with inflation either staying the same or decreasing. 

The Chinese economy, again, seems to be in a restructuring period after decades of positive growth. The Chinese economy is expected to increase but not at the same level as before.

The Toyota group was hit by some challenges related to Daihatsu, which produces some small cars and some regular Toyota cars too.

It just goes to show, that even a name brand such as Toyota can have some serious challenges if not looked at carefully, as maybe someone in the quality control area, in Daihatsu or Toyota was more concerned with production schedules and not so much concerned with quality control issues.

The area that was hit by the earthquake, while not limiting the human suffering, is not a significant area for economic activity in Japan.

If the earthquake had hit Osaka, Nagoya, or some other major metropolitan area in Japan, it might have been even more devastating.

The decrease of industrial shipments at 0.5 percent, again, is not that significant, as it could be in the margin of error of + or 1 0.5 percent.

The inventory index is interesting, as a decrease or increase of inventories can be strong indicators or what going on in an economy.

If inventories start to trend upward, meaning for example many company's factories or warehouses are starting to have long periods of product not moving, that might be an indication the demand is slowing in an economy.

If the opposite is true and inventories are not sitting in warehouses for very long, can could be an indicators of demand in an economy is strong.

"Fluctuating indecisively" is most likely correct has there are going to be periods of ups and downs, and factories shutdown and or have material shortages and or repairs needed.

The fact that the industrial shipments increased is a good indication that maybe global demand for Japanese industrial products is strong.

And at the same time, the fact that inventories declined is a good indication that maybe demand for Japanese industrial products was strong and companies can't keep up demand.

Production is never linear, upward, as there are always stops and starts in manufacturing, due to material shortages, logistics challenges, downtime for repairs and so on.

The trick, of course, is for manufacturers to be able to plan as much as possible any downtime periods and factor them into the production schedules.

There are probably many different sectors related to production in Japan, and maybe many of them are export oriented, as Japanese manufacturers are noted for their attention to detail such as maybe German manufacturers. 

Even though the Japanese economy is the 4th largest economy in the world, with a population of 125 million, its focus seems to be exporting including the exporting of industrial products and not just Japanese cars or baseball players.

Have a nice day and be safe!

Japan New Car Sales: Updated March 19, 2024.

 

Japan's new car sales increase 13.8% in 2023, 1st rise in 5 yrs

Article Source: https://mainichi.jp/english/articles/20240105/p2g/00m/0bu/050000c

Ideas:

Japan has nine major car manufacturers, but some of the smaller car companies are subsidiaries of the larger car companies such as Toyota and Nissan.

The US now has only 2 or 3 major car companies and competition and finances have whittled the number down. 

But of course the US is an import country, which means almost every major global car company is is in the US now.

Possible because Japan still has eight car companies, is a sign of cooperation among Japan companies and not so much about cut-throat competition.

The same can be said maybe about the airline industry in Japan with two major companies and many smaller regional and or low-cost airlines that are subsidiaries of the two largest airline companies.

The decrease in sales in 2022, was a combination of the pandemic and parts shortages such as a semiconductor shortage due to supply chain challenges.

Talking to a Japanese person in 2022, the person said it was taking up to six months, at that time, the get a new car.

Daihatsu, at the time of this article, might still be having production challenges due to discrepancies in quality control issues. 

Daihatsu is part of the Toyota group as a subsidiary, as it produces its own cars and also produces some Toyota cars too.

A countries population has to be big enough to support nine car companies but at 125 million the Japanese population seems well able to handle the load.

At the same time, buying a new car is not an everyday purchase, so again, the larger the population, the more chances of a lot of car sales.

Japan, for the most part, is not a showing society or show-off society and they don't buy cars to show off their wealth, so many Japanese cars are suited for the ordinary Japanese citizen, even though Lexus, a luxury Toyota brand is gaining some sales.

And for example, compared to South Korea, which does like to show off their wealth, there are not a lot of BMW's or Mercedes, in Japan, compared to other countries.

You can see the stark difference between the number of Toyota sales and the number of Nissan and Honda sales and which brand is the most popular in Japan. But that doesn't mean Nissan and Honda are not profitable or not popular, as both brands are strong global leaders too.

As mentioned before Daihatsu is having some challenges, and at this time, maybe the Toyota group told them to halt production and fix their quality control challenges.

The halting of production on the Daihatsu lines doesn't look to have made a real dent in the production or sale of overall Toyota car sales.

Minivehicles,, which are not talked about a lot are very popular in some countries and Japan too, as sales are continuing to increase in the minivehicle market globally.

Again, back in 2022, a Japanese person told me it was taking up to six months to get a new car order, but maybe the back-log has been solved.

Japan, for what its worth, makes all kinds of vehicles, and not just for Japan but many Asian countries including India too.

And many Japanese car companies have been able to find a niche or the kinds of cars that different populations want and need, and not just the standard Toyota but many other kinds of cars globally.

Now how is the Japanese car going to deal the the increase in EV cars and hybrid cars that many global buyers want now.

Have a nice day and be safe!