Japan Government Assessment of Economy; Updated Oct.30, 2025.

Japan says economy recovering moderately, warns of US tariff impact

Article source: https://mainichi.jp/english/articles/20251029/p2g/00m/0bu/029000c

Ideas

The Japanese government, with no criticism, are always saying the economy is recovering moderately, and the reason for that reason is they don't want to upset the financial markets which potentially are easily upset with any kind of negative news.

Yes, most likely the US tariff situation is finally beginning to have an effect on the Japanese auto sector, which at this time, is the main economic driver of the Japanese economy, as no other sector has as much affect on the economy as the auto sector.

And yes, private consumption or consumer spending and capital investment or business spending are two leading components that are actually not that robust at this time.

Most likely, but not really known yet, many exports to the US from Japan might not be involved in the tariff situation except maybe steel and car parts which Japan does export to the US.

With regard to exports or even imports there is volume and value when measuring the amount or number, most likely Japanese did front load much of its cars to the US as a way to avoid or reduce the tariffs on cars, which means later they might have reduced car shipments.

It had been reported earlier, that Japanese car makers were shipping more less expensive cars to the US as a way to keep sales at certain level as they anticipated US consumers might begin to buy less Japanese cars.

As this is now the end of October, the effects of the US tariffs might actually be in full effect as most likely Japanese car makers and or US dealers begin to pass-on the tariffs to the final retail customer in the US.

It might take a few months to actually see how much of an effect the tariffs have on the Japanese car sector or on how it affects US consumers in the US.

Again, the Japanese government doesn't want to paint a bleak picture of the economy so it might say almost flat when in reality corporate bankruptcies might be close to being at an all time high in Japan due to labor shortages and continued increase on raw material prices.

Small and mid-size companies in Japan are most vulnerable with their thin or sparse profit margins as they can't afford to increase wages to get new workers and or keep the workers they have and then of course the continued increase in raw material prices have stressed out small and midsize companies more than ever now.

Again, not to criticize, but every new Prime Minister says they are for a strong economy and plan to deal with the inflation situation, but none have been able to do much yet, and haven't really been able to do much for the Japanese economy.

Its way to early to say anything about the new Prime Minister as she was just elected a few weeks ago and needs time to really do anything.

Have a nice day!

More Japan Rice News: Updated May 26, 2025.

Japan weighs doubling stockpiled rice release to rein in price surge

Article source: https://mainichi.jp/english/articles/20250515/p2g/00m/0bu/032000c

Ideas

The Japanese government keeps increasing the rice supply but the price of rice remains high which might indicate there is something not quite right in the rice supply chains.

Most likely either rice suppliers such as producers, wholesalers, middlemen, and even supermarkets are keeping the price of rice high.

This seems very unusual as whenever the supply is increased normal supply and demand would put pressure to lower the price of rice in the market.

Again, normal supply and demand would put pressure on the rice market to begin to lower the price of rice but again something is amiss in Japan related to the rice market.

Prices usually control a market but maybe in this case there is some other factor which might have too much market control or market power which is keeping rice prices higher than normal.

There might be some collusion among some suppliers or middlemen that have formed some kind of cartel in the rice market that is keeping the prices of rice higher that usual.

There is always the possibility or idea that the Japanese government should maybe buy foreign rice as way to increase its stockpiles. Its time for the Japanese rice market to be less nationalistic for the good of Japan society and bring in stockpiles of foreign rice in case there is another possible rice shortage.

But there are always some who might think foreign rice is either not good enough and or doesn't taste very good and then there are those who might think the Japanese rice market should be for Japanese rice only.

Rice supplies should never have been that low as the Japanese government or government agencies related to agriculture should never have allowed the supply to be that low. 

If there was a possible shortage of rice the Japanese government should have or could have bought foreign rice to supplement the rice market as a way to keep prices down as most likely Japanese consumers would eventually have gotten used to the taste of foreign rice like consumers get used to many things foreign in many countries.

If the 2024 rice harvest was good and the 2024 rice harvest saw an increase of 180,000 tons then there is something amiss in the rice market in Japan. 

Most likely, or not. wholesalers and farmers formed some kind of informal cartel to keep prices high to benefit them despite the challenges of Japanese households.

The Japanese government needs to intervene for the good of Japanese society and find a ways to force farmers and wholesalers to follow normal supply and demand principles in the rice market.

If rice is a major stable in Japan has assumed why would the Japanese government not release enough rice into the market and or buy foreign rice as needed to keep the supply and demand normal instead of letting the farmers and wholesalers control the market and prices.

Yes, there might have been an increase in foreign tourists into Japan but could that have been the only reason for the rice shortage. Articles keep suggesting that foreign tourists are the reason for the rice shortage in Japan.

To be fair this all doesn't make sense, as farmers produce rice and sell in in auctions and then wholesalers take over and sell it to supermarkets and so on.

The government or suppliers or wholesalers, if needed should buy enough foreign rice to keep the price of rice in the market normal that supply and demand are always in some kind of equilibrium.

There should never be the need to buy back rice or any other agricultural product in Japan with normal supply and demand principles.

Yes at auctions, for the most part, farmers are price takers and have to accept the rice as given in a rice auction. Of course they could always decline to sell their supply of rice in the auctions which might be what's happening in Japan now.

This should never have happened in Japan if rice is such an important food stable for Japanese households and whomever should in the Japanese government should have been in more control for the good of Japanese society and Japanese households.

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!

Japan Rice Exports: Updated March 18, 2025.

Japan aims to increase rice exports 8-fold to 350,000 tons in 2030

Article Source: https://mainichi.jp/english/articles/20250312/p2g/00m/0na/017000c

Ideas:
The Japanese government, like all governments can have and needs long-term strategic plans to grow the economy, but this plan might be doable unless the Japanese government can more young people to become farmers as the population of older farmers is either passing-away or retire-ring or both. 

Then there the idea that most Japanese young people don't want to become farmers and the work might be considered too hard and not very lucrative.

However, there is a possible trend that some young Japanese or even mid-career Japanese want to move back to the rural areas and might consider becoming a farmer.

There is also the idea that farming has changed and is not the rural stereotype it once was with improvement technical and scientific advances in agriculture. 

Again, the Japanese population continues to decrease and at the same time, while the foreign population in Japan is increasing its not a one to one ratio.

There is also the ideas that rice, while a cultural food product in Japan, rice consumption keeps going down as more and more young people prefer western style food these days.

But its good for the Japanese government to try and improve the rice production to ensure that the shortage dating back to the summer of 2024 doesn't occur again, and its good idea to begin to think of exporting rice as a way to increase exports as Japanese rice is a popular rice around the world these days.

Yes, foreign tourists into Japan is at a record level now and they do foreign tourists do eat rice, and a lot of it, but can they replace the decreasing Japanese population in eating rice.

And yes, the farmer situation in Japan might be a crisis level with more and more farmers either quitting the farming industry, passing away, and or younger people not interested in that kind occupation these days, as they prefer to move to the big cities.

But again, its good that the Japanese government is considering rice as an export product, but can the Japanese agriculture sector produce enough rice not only for Japan but for export purposes  too.

The Japanese government will probably need to subsidize the Japanese farmers to get them to do what they need and want, as again, the population of Japanese farmers it decreasing significantly these days.

They might have to consolidate farms from a lot to a few and or merge farms if they can to get what they need and want.

Basically, this is a like what the US did, gradually, but many farms becoming large commercial farms and the small individual farmers decreased significantly over many decades.

The Japanese government needs to manage the on-going domestic rice shortage and then begin to strategically move rice into the export area as the rice situation stabilizes.

Maybe Japanese rice can be very good export product, as again, Japanese rice is a very popular food product and or those Japanese foods such as sushi and onigiri that uses rice can make it a very good rice export.

The Japanese population has been decreasing for years, for decades and the foreign population living in Japan is increasing but again its not a one to one situation.

If the Japanese government improved its immigration situation and allowed more foreign workers into Japan that would help along with improving the labor shortage in Japan, but its a very complicated situation related to the Japanese immigration agency allowing enough foreigners into Japan to reduce the current labor shortage.

Have a nice day!

Japan Rice Reserves: Updated March 13 2025

'Like watering a desert': Experts doubt release of reserves will lower Japan rice prices.

Article Source: https://mainichi.jp/english/articles/20250304/p2a/00m/0bu/011000c

Ideas: 

Most agricultural products are sold at auctions, and as such most likely the farmers  or coops will have to take the price as given in the auctions. So buy low and sell high for the wholesalers who buy the rice. But as this is maybe a Japanese government situation the Japanese government has already bought the price so, the price might be high or low depending on what the government wants. 

Rice is a major stable in Japan and a cultural product so its kind of strange how this situation got out of control in the summer of 2024, and why didn't the government step-in immediately instead of just letting the market run its course, with low supplies and extreme prices in July and August and even now.

Yes, maybe flooding the market with the rice reserves from the Japanese government might not solve the problem as it takes time for prices to go down and momentum to gather in the market.

Most likely as most agricultural products are bought and sold in auction, as its the Japanese government selling the reserves, they might not want or expect high prices for the rice, which would be good news for the coops and wholesalers buying the government rice. 

But that doesn't mean that when the rice hits the supermarkets and restaurants that the price is automatically going to be low or less than now, as the market will decide what the price might be as again supermarkets and restaurants will want to continue to keep the price high ensure they have can re-coop their losses as maybe Japanese consumers either stayed away from buying or stopped going to restaurants, due to the rice shortage and the high prices.

If the article is correct it seems the Japanese government has a lot of rice reserves, so why didn't they use the rice reserves back in July or August of 2024 to help the market and Japanese households, and especially as inflation was already high, as the Japanese government could have done a lot to lesson the stress on its citizens last summer.

While its good that the Japanese government is finally releasing the needed reserves, what about the wholesalers and the agricultural cooperatives and their motives related to how they are going to price the rice reserves. Are they going to keep the market price high or are they going to lower the price to help Japanese households and Japanese society.

Again, prices normally don't go down very fast as it might take some time before the Japanese consumers begins to see rice prices back to pre-August 2024 if at all, as again the supermarkets and restaurants might keep the prices high for the immediate future, until the actual rice supply in Japan gets back to normal.

Markets are emotional and the rice market is no different. And yes, they are moved by supply and demand but more importantly they are moved my momentum and emotional considerations. For example, as there was/is a rice shortage in July and August of 2024, there was a so-called rice shortage during that time. 

As a result supermarkets, stores and restaurants began to increase the price of rice. As other supermarkets and restaurants began to feel the rice shortage and news spread quickly of possible rice shortage all supermarkets and restaurants began to increase their prices.

And at the same time, there were potential earthquake warnings, which scared many Japanese households and consumers began to rush the supermarkets to horde the rice there and supermarkets actually had to impose a limit on the number of bags of rice a consumer could buy as the rice shortage combined with the earthquake scare had Japanese consumers rushing to the supermarkets to get what rice they could.

So again, the price of rice might not go back to any kind of normal for a while as the rice market has to adjust to the new reserves and increase in the supply. And again, the market might not follow traditional market principles of supply and demand as again markets sometimes can be very irrational.

Yes, unfortunately not all in the market are rational as some farmers and suppliers will hold supplies and wait until the price is high enough for their liking as farmers and suppliers have to take the price as given in auctions and if they know the auction price is going to be low, they might not want to participate in the auction, instead waiting for higher prices auctions.

Its unfair to the Japanese consumer or supermarkets or restaurants, but the farmers and suppliers do have some power in the marketplace as to when they want to sell their products, as again they are price-takers, meaning at an auction they have to take the prices as given, and if they know at an auction the price is going to be too low for them or their liking they will not participate in the auction.

Its seem there might be some power struggles going on between the Japanese government and rice suppliers as maybe rice suppliers feel they can hold out until the Japanese government repurchases the rice suppliers rice at a higher price.

Of course, that is not good for Japanese society or Japanese households but maybe the rice suppliers are thinking about their self-interest and their survival in the rice market.

Also, as Japan is an ageing society, and many of the rice farmers might be somewhat old and they are thinking about their future and also about what could happen to the rice market down the road.

Would it be better for the Japanese government to flood the market with more than 210,00 tons of rice and then let the market decide the price instead of releasing small amounts of rice at at time, which might not have any significant effect on rice prices.

It seems normal supply and demand principles are not working in the Japanese rice markets, as increases supply should reduce prices but they really haven't at this time.

And again, it takes time for the market to react and adjust to any significant changes in the market.

Have a nice day!

Japan Diet Extra Budget: Updated Dec. 20, 2024.

 

Japan enacts 13.9 trillion yen extra budget for economic package

Article Source:  https://mainichi.jp/english/articles/20241217/p2g/00m/0bu/039000c

Ideas:

It seems Japan has a new economic package as its economy doesn't seem to be doing much recently, as it is up and down frequently lately.

The new economic package could be a political ploy to gain support for the current administration that doesn't has a majority the diet.

In relation to the disaster reconstruction costs, many residents in area where the earthquake hit on the west coast of Japan, say recovery is taking a long time.

And of course inflation relief, again, is just like last summer or many time before as the Japanese government just keeps coming with new inflation relief packages, without much affect on the economy.

Increasing the tax-free annual income threshold is a good idea as it will help part-time workers, who are not all college students but working women with children too.

The Liberal Democratic Party has been in power most of time Japan has been a democracy, except for a few years here or there. But now it might need all the help it can get to stay in power.

Once again while needed this economic package seems like the other economic packages aimed to do the exact thing, which helps Japanese households and hopefully stimulate consumer spending in Japan.

A one-off cash handouts for low-income households is needed but how long will it last, one month, two months etc.

As stated before Japan needs some kind of trade agreement with oil producing countries, as Japan is a resource-poor country and has to import much of what is needs including all of its energy needs.

And again, the news from the Noto Peninsula area suggest the recovery efforts are taking way too long, as its going on a year now.

It seems the Japanese government is not too concerned about its fiscal health and it just keeps spending as needed. But that is now common among many advanced countries these days.

Most of the Japanese government debt is owned by Japan, meaning its internal and not external like it was with Greece in 2010.

Like always whenever a initial government spending plan is proposed it never come out the same after all the main actors work on it. 

And this time the same too, as the initial plan was amended to make sure all will agree on the plan, such as addition of increased disaster relief funds and probably some other cuts that were not important at this time.

Free education, for everyone might new for some, but in the US 1-12 grades are free for public schools, but not for private school. In South Korea, its free for elementary schools but not 100 percent free for the other grades. 

To get that one passed it could take some doing as it might increase the budgets of local governments and the overall Japanese government too.

Have a nice day!

Japan Tax Threshold: Updated Dec. 18, 2024

 

Debate over raising 1.03 mil. yen tax threshold gains steam in Japan

Article Source:  https://mainichi.jp/english/articles/20241210/p2g/00m/0bu/030000c

Ideas:

If the tax threshold is increased that might mean more hours for part-time workers, which might help some with the labor shortage in Japan.

There might be some or many part-time workers in Japan with families and or are considered low-income workers who need a way to earn a living wage and or income to not  be in the poverty zone.

Japan needs to help its part-time workers work more hour which can help with the labor shortage. If more part-time can work more hours, and of course not have to pay taxes that can help a lot for part-timers.

Japan needs to increase the special tax exemption for dependents as they too can contribute  to the householders in Japan.

Japan needs to find ways to keep people working and reduce the labor shortage. If not then the part-timers will not increase their hours and the labor shortage will continue. 

Of course if all part-timers were able to increase their hours that doesn't mean the labor shortage in Japan will lesson, but it will go a long way to helping some companies with labor shortages.

An increase from 1.03 million yen to 1.78 million yen is a large increase in income which can help a lot of part-timers in Japan, and maybe even help some with consumer spending in Japan.

Maybe if Japan increased the minimum wage in Japan that might help too as again, there might be some or many families with part-time workers such as women with children who can only work part-time and need to take care of their young children.

Japan might have one of the lowest minimum wage rates among advanced developed nations still as they need to increase the minimum wage to help low-income workers.

There might be many income barriers in Japan at this time, as maybe some of the barriers might be 20 century ideas and not 21st century ideas.

And yes increasing Japanese people's disposable income might help with consumer spending in Japan, as spending in Japan is not where it should be at this time.

And it might help with the labor shortage but its not going to completely eliminate the lavor shortage in Japan.

Yes, there are many things that could increase inflation, but at the same time, they might not have that much of an affect on inflation.

Increasing the tax threshold is needed in Japan, as Japan needs all the help it can get to increase disposable incomes along with the possibility of increasing consumer spending.

If peoples tax revenue is decreased it might help with their disposable income along with increasing consumer spending, which can help with tax revenues as consumers pay a sales tax on things they buy in Japan.

Governments should stop playing games with peoples lives and work together for the good of the people. 

Just as wage increases for Japanese workers help with increasing their disposable incomes, so too should the tax threshold be increased to help part-timers too with their disposable incomes.

What Japan, at this time, doesn't need is another sales tax increase which will, again, like in 2014 an 2019, decrease consumer spending in the Japanese economy.

What they are not looking as is the possibility, again, of increased disposable incomes among low-income workers, which might be some college students but some or most of them could be working women with children who can only work part-time because of their young children.

The Japanese government, like they always do can supplement any loss in revenue as they have done many times before in Japan.

Its time for Japan to join the 21st century with tax plans and a minimum wage that is befitting advanced countries like in the Northern European countries such as Norway, Finland, and Sweden along with Denmark who have good plans for their citizens.

Its not easy to decide which is more important, the local governments need for continued revenue or helping the large part-time population in Japan.

The Japanese government needs to set some priorities and find ways to fund those priorities without leaving anyone behind in the local areas or the again large part-time work population in Japan.

One possibility is to increase the minimum wage and maybe not increase the threshold tax and that might be enough, or increase the minimum wage and increase the threshold to maybe 1.58 instead of 1.78.

When these thresholds were set-up maybe the cost of living or inflation back then was not a major challenge but today inflation is hurting everyone, and part-time workers need help just to pay their bills.

Sometimes Japan moves very slow and this might be one of those situations where the tax threshold, which might have been created decades ago, are just not relevant today, as again, the inflation level was much lower along with the overall cost of living in Japan.

If Japan was to be a real advanced economy again, it needs to find ways to help all of the part-time workers who might need and want to work more but can't because of the tax threshold. 

Just what kind of supply shortage is the economist thinking about as Japan is a resource poor country and already imports much of what it needs, so there will be no real change if a tax cut is implemented, which has happened already many times in Japan the last few years.

Implementing such as step might not be any worse than what is happening now as Japanese households suffer from high inflation and prices which are passed-on to consumers as imports are increased due to the weak Japanese yen.

Consumer spending in Japan has already slowed and has been slow for a very long time, so any new programs, such as the need to help low-income workers and or part-time workers is not going to cause the side-affects that some fear.

And the Japanese government, as needed, as usual, can and will help local governments with further supplements so that all can be taken care of in Japan, at the same time.

Have a nice day!

Japan Rice Prices Increase: Updated Oct. 31, 2024

Japan's 2024 new rice price rises to 31-year high after summer heat

Article Source: https://mainichi.jp/english/articles/20241019/p2g/00m/0bu/004000c

Ideas:

At some point governments need to implement temporary price controls on some essential everyday products such as rice, bread, milk and eggs. And then of course give temporary subsidies to producers or retailers of the products.

A price control means what is say, retailers and whomever can not increase the price more than the government mandated price that they think is needed to help citizens.

Also there should be price controls on these products if the growing season caused a significant shortage, and there should be a volume limit to be met for the price controls, and then of course give the producers a subsidy to cover their losses.

The Japanese government should due to maybe some not so good producers or other providers should monitor how much rice is actually supplied and its known, unfortunately, that producers will take advantage of a limited supply and try to price gouge the market, if not unchecked.

Rice is a major food product in Japan, and this past summer, friends of friends had significant challenges finding rice in the stores, because, as usual, there was a lot of hording before stores put a limit on how many bags buyers could buy at one time.

But of course, even then, some shoppers would go back the same day and try to buy more rice.

First off, there might have been 3 million foreign tourists in Japan in August and not all of them ate rice dishes, so it was unlikely, they alone would have caused a rice shortage.

Yes, of course, just like all businesses in Japan, production costs have increased as the weak Japanese yen might have caused production materials to be more expensive than usual.

And then there was the megaquake situation, which is normal, as some people might have gone out and tried to stock-pile needed products, including rice in August for fear of a possible earthquake.

People are going to people, meaning they have fears and worries so hording and stockpiling is a natural response to any situation sometimes.

But a government should try to help the citizens by finding ways to reduce stockpiling and hording as much as possible.

Have a nice day!

Japan Economic View: Update September 21, 2024

 

Japan retains economic view in Sept., optimistic for corporate sector

https://mainichi.jp/english/articles/20240918/p2g/00m/0bu/055000c

Ideas:

The Japanese economy might be improving with the corporate sector showing improvement, but again, as always, the weak link of the Japanese economy is consumer spending, and yes, the hot summer weather might weaken spending during the hot summer months.

And of course the typhoon/hurricane season in Japan, prevents consumers/people from traveling, which the summer months are prime travel time.

Consumer spending has always been the weak link for the Japanese economy, as Japanese consumers/households just don't spend that much as they are mostly savers and not spenders like in the US.

For the most part, like any economy, there regions with strong economic activities and those less economic activities. For example spending in the Tokyo is always going to be good but for the rural areas maybe not so good.

Real wage growth might have improved the overall economy, but it must be remembered, that not all wage earners in Japan got the wage increases that large Japanese company workers got.

There might have been a modest rebound, but again, if all Japanese workers could have gotten the 5 plus increase of large company workers,  consumer spending might have been even more.

Not all sectors are the same, as some improve while some slow down, and some decrease, depending on economic conditions.

Unfortunately, bankruptcies might continue in Japan as there are continued labor shortages and inflation, which makes materials prices too much for some and some companies unable to hire new workers, and or they can't afford to pay for wage increases, which means workers will leave and find new work with higher wages.

But unfortunately that is the nature of a market economy, with some companies doing good, but some companies not able to do much, and eventually have to leave the market.

Have a nice day

Japan Government Economic View: Updated September 4, 2024.

 

Japan gov't raises economic view in Aug. for 1st time in 15 months

Article Source:  https://mainichi.jp/english/articles/20240829/p2g/00m/0bu/045000c

Ideas:

The Japanese government, like all governments, want to show a positive view of its economy, and with good reason, as citizens begin to feel better about the economy, and don't want to hear gloom and doom, they might begin to spend in the economy and do things that lift up the economy, and Japan is no different than any other country in that regard.

"Recovering at a moderate pace", again, is a positive take on the economy, while later is says "pausing" which might lean more toward what is happening.

Especially now, during the extreme hot summer heat wave, consumers might not be spending as much or doing as much outside. 

Another article has suggested that once the temperature gets above 35 C that consumer spending goes, down, while usually in the summer  consumer spending increases.

To be fair, economies don't always grow in a linear fashion or always upward, and the Japanese economy is no exception as in the past there have been periods of up and down.

While the 3.1 percent growth for the April-June period is very good, the next quarter might  be so good or even much less than hoped for or expected, as, again, the summer heat wave might be limiting consuming spending.

There is also the Obon summer holiday period in Japan, which might or might not be as robust as previous years, and again the summer heat wave, and the current typhoon season might hurt the Japanese economy.

Amy growth or increase in consumer spending is good in Japan, as Japanese households usually don't spend like US consumers.

Consumer spending or private consumption, while maybe 50 percent of Japan's GDP is always a challenge, as Japanese consumers don't spend up to the potential of the Japanese economy. That might be a good thing or not a good thing, as Japanese consumers, for the most part, tend to be more savers than spenders.

The Japanese car industry, is a major economic driver of the Japan economy. An economic driver is anything that significantly increases economic growth. 

While the Toyota group situation, the fake testing situation, might have caused some pause in production, there is just too much demand for Toyota cars for the fake testing situation to cause that much harm.

The extreme heat can be both a positive and a negatives, as again, anytime the temperature gets above 35 C consumer spending or activities outside might be reduced.

But,yes, AC's saw a huge demand and or course the Paris Olympics helped the sale of TV sets in Japan, like almost all countries.

Outbound travel, or travel by Japanese travelers overseas have been hit with the weak Japanese yen, which makes the US dollar or the Euro much stronger, which means the purchasing power of Japanese travelers is much weaker.

Housing construction, being "almost flat", means it probably is not going to improve that much now or in the future, and for the most part, inflation is still a challenge in the Japanese economy, which means maybe home buyers are not that interested at this time.

If the Japanese government, again, doesn't say anything negative, it might mean several things, such as they don't want to say anything not so good as this time, and just maintaining the current position and or in a waiting situation or sectors to improve and then say something positive about the Japanese economy.

The global economy is always in a state of flux as not all countries grow or change the same, so its normal to say possible signs or pause in some areas.

The global economy is like a country with many different sectors in a market economy, and they all don't change or grow the same, as some improve while some don't improve, and its the same with each country's economy.

Have a nice day!

Japan Debt: Updated August 30, 2024.

 

Japan's state debt tops 1,300 tril. yen for 1st time

Article Source:  https://mainichi.jp/english/articles/20240809/p2g/00m/0bu/044000c

Ideas:

The Japanese economy and the Japanese government have been in this situation for a very long time, and it doesn't look like its going to end anytime soon.

The Japanese government always says its going to reduce the debt but like households, emergencies and other priorities come up which delays plans to lower the debt.

So far, the Japanese economy has not suffered related to the high debt but that doesn't mean things will be the same many years later and maybe the pension and other Japanese government programs might be hurt or reduced.

There are going to be some positives and negatives related the Bank of Japan increasing the key interest rate, but it depends on who you are in the economy for positives and negatives.

For banks its going to be a positive it that they can get more for their loans they give to businesses and households.

For households and businesses they will have to pay more for loans which could be a challenge for small businesses who need loans just to survive the current inflation situation.

The BOJ has used the government debt situation , or bond buying as way to help a stagnant economy grow, but without much success.

Japan, like some or many countries uses fiscal spending as a way to help the economy and or help society. Japan has been doing it for decades, and maybe its one of largest fiscal spenders among advanced economies. 

Most of Japan's debt is owed by Japan and is internal, compared to the 2010 Greece situation where most of the Greece debt was external, owed by other countries.

So there is very little chance of other countries calling in the debt owed to them, as Japan owns most of the debt.

While its not good, it can easily print more money or put more money into the banking system without much interference.

Have a nice day and be safe!

Japan Economic Package: Update Jan. 6, 2024.

 

Japan OKs over $113 billion economic package to ease inflation shock

Article Source: https://mainichi.jp/english/articles/20231102/p2g/00m/0na/038000c

Ideas:

Its rare that a proposed economic package, which first introduced, remains mostly the same when it finally approved. But it seem to tax cut of 40,000 yen per person and the 70,000 yen payouts for low-income households was able to keep the same numbers without losing its intended value.

It sounds very good but can a one-off tax cut really improve the Japanese economy? Of course even the Japanese government has budget constraints and maybe 40,000 tax cut was the limit that the Japanese government could afford at this point.

Of course the main question is how is the Japanese government going to pay for the tax cuts and the payouts, when the Japanese government has one of the highest debt to GDP ratio among advanced nations.

While the tax cut and payout are the first step to maybe "completely break with deflation" its going take much more for the Japanese economy to grow significantly.

The mindset of companies and households need to change from a deflationary mindset to one of improved growth through wage increases and more consumer spending in the Japanese economy, and that is not going to happen in one quarter or even half a year, as it could take much longer to get consumers spending significantly and companies, all companies, to increase wages.

At the same time, price hikes will continue in 2024 until, all companies, finally begin to increase wages. But the challenge is, as companies pass-on their costs to the next in the supply chain, those same companies that just increased wages, now might have to pass-on the wage increases to the next in the supply chain, including the final retail customer.

The Japanese government is already one of the biggest government spenders among advanced economies, and an extra supplementary budget is no surprise here.

And as always, anytime there is faltering public support, government will find ways to try and improve the public support, and in this case returning tax revenues might help with many households, but at the same time might not improve public support.

Also, opposition party lawmakers, like everywhere in the world, will find fault with the current proposals and might come up with their own ideas related to tax cuts and one-time payouts and also mentioning the time need to pass-on extra tax revenue.

The challenge, once all of the tax cuts and payouts are finalized and finally able to go to the Japanese public, the Japanese government needs to makes sure access is easy and doesn't require a lot of un-needed paper work for households or individuals to get what the Japanese government wants to give them.

At the same time, the Japanese government needs to make sure that schemers take advantage of the Japanese government with cheating or other means to cheat the government.

Rarely, once spending increases, do governments reduce outlays, as most of the time spending gets higher and higher. And Japan is no exception, as it will be challenged to actually cut spending back to the pre-crisis level.

It might take more than one tax cut and or more than a one-time payout for household consumer sentiment to improve, and the long-established deflationary mindset has been entrenched in the Japanese economy for over a decade.

The Japanese economy might only grow 1 percent, but that is better than nothing, and its  a start, its a platform for better growth in the future.

And at the same, tax incentives and regulatory reforms are much needed in the Japanese economy along with helping small and mid-size firms with helping them increase wages.

For too long, like many advanced economies, many of the benefits go to large companies and the small and mid-size companies get left out.

More than 70 percent of the Japanese workforce works for small and mid-size companies. The challenge is if the government doesn't find ways to help the small and midsize companies Japan its going to have a two-tiered wage system based on haves and have-nots as many small and mid-size companies can't afford to give wages hikes.

That is the problem now in South Korea, as the variance for  wages and benefits for large  companies and small companies is so large that many university graduates don't want to work at small and midsize companies.

While "the new frontiers" of growth sounds good, will they really improve the daily lives of households and or individuals in the Japanese economy?

Yes, the Japanese economy needs to economic drivers, beyond exports, but what the Japanese economy really needs is improved productivity per capita, as it has one of the lowest per capita labor productivities among advanced economies.

Japan also needs new innovation drivers, but sometime old established traditional companies are slow to change in Japan.

Private consumption or consumer spending might be resilient at this time, but inflation might eat away at consumer sentiment, and households and individuals will get tired and reduce their spending.

Prime Minster Kishida can only do so much, with suggesting and asking companies to increase wages but in the end companies will decide what is right for them and when to increase wages.

Wage increases might have been 3.58 percent, for large companies, but again, 70 percent of the Japanese workforce might not have received a wage increase in April 2023, as most don't work for large companies, but small and mid-size companies.

Inflation is expected to continue in 2024 for companies and might need to increase wages more than the 3.58 percent of 2023. If not real wages, again, will be outpaced by inflation, which means, again, households are going to be stressed even more from inflation.

Have a nice day and be safe!