Japan Economy Recovering: Updated Dec. 2, 2025.

Japan says economy recovering moderately, warns of US tariff impact

Article source:  https://mainichi.jp/english/articles/20251126/p2g/00m/0bu/031000c

Ideas

No offense, but most governments use the phrase "recovering moderately," as a way to not upset the financial markets which can easily be swayed in both directions.

And yes, at the same time the US tariff situation might be weighing heavily on the Japanese car sector which might see the profit margins reduced significantly.

Private consumption or consumer spending might be picking up some but to be fair Japan has never been a major consumer spending economy like the US as the Japanese have been more savers than spenders, which while a positive can also be a negative if the Japanese households don't spend enough to support the economy.

At the same time, capital investments are very important for the Japanese economy as most likely the capital investments are coming from Japanese manufacturing companies which might still be considered as economic drivers for the Japanese economy.

Exports might be considered flat but that doesn't mean that they are in negative territory,  although it might be decreasing from a positive zone to a slow growth zone but still stable.

The US governments current trade policy might be affecting many countries and might be affecting it allies even more as its a very conflicting situation at this time.

The Japanese economy never seems to grow that much as its a very mature economy now, which means mature economies either need a lot of resources to grow, significant innovation, or improved productivity within its economy.

Exports have been a positive for the Japanese economy for the past 50 years and might be considered its sole economic driver outside of manufacturing. 

Unfortunately, there doesn't seem to be any other sectors that can significantly help the economy grow other than exports and again maybe manufacturing in Japan.

There is the possibility of foreign tourists and the record numbers entering Japan and spending a significant amount as the weak Japanese yen gives foreign tourists more purchasing power, but at this time its good but still not enough to help  GDP growth that much, but it is improving.

Japanese companies, more than US companies, at least before the pandemic always absorbed their costs as a way to keep as many customers happy as they can and to show good will to their customer base.

But that might be changing in the future as Japanese automakers have significant shareholders who might be more demanding and want to see a significant profit, and if the Japanese car companies keep reducing prices and or keep covering the tariff costs the profit margins of the car companies are going to be reduced significantly.

At the same time, Japanese companies in the US and maybe globally have always considered market share more important than long-term profitability, but again, that might be changing soon as shareholders want to see more profit than market share from their companies.

Its possible that most of the eight Japanese car companies have significant reserves which they can use to help them over-come the tariff situation. And its quite possible as the tariff rate was reduced to 15 percent that might be enough to help most Japanese car companies remain profitable and be able to meet their shareholder expectations during then next quarter.

But the one Japanese car company that might still struggle unfortunately is Nissan which seems to be in the middle of a restructuring period and they might not see a profit over the next year or two.

Yes, again, private consumption or consumer spending might be picking up but its never going to be as robust as US consumers spending is. For example consumer spending in the US is maybe 60 or 70 percent of the US GDP, while in Japan its around 50 percent which might not be enough to help with significant GDP growth which is what the Japanese economy needs at this time.

Business investment, again, might be related to Japanese manufacturing as manufacturing in Japan is still a major sector a major industry, while in other advanced economies the services sector and the technology sector have transformed most economies but in Japan manufacturing is still has a significant presence in the economy.

Imports being downgraded to "almost flat" might mean demand for products from other Asian countries such as China and South Korea might lagging now as maybe for example the smartphones coming out of China, which might have been popular at one time, are not so popular now and the Samsung smartphones coming out of South Korea too might be losing their luster in the highly competitive Japanese domestic market.

There is also the complicated political situation between China and Japan now which might he affecting demand for Chinese products in Japan as maybe Japanese consumers might be less interested in Chinese products at this time, in China many Chinese consumers too might be less interested in Japanese product now.

Producer prices are often increasing but in the past, at least before the pandemic, producers tried to absorb their costs as a way to maintain their customer base. But those days seem a long time ago as now producers are passing-on their costs to the next in the supply chain, and maybe even the final retail customers as their profits margins continue get thinner and thinner as raw material costs continue to increase.

Japanese rice is a different story as the summer of 2024 so-called shortage has kept rice prices at all time high with many super markets continuing to have frequent shortage of rice in Japan.

Rice is a major food staple of the Japanese households and it's strange that the powers-to-be allowed rice prices to become a major challenge for households, restaurants, and supermarkets in Japan.

Have a nice day!

Japan US Exports: Updated Aug. 5, 2025.

Japan's US exports fall 10% in July, down for 4th straight month

Article source: https://mainichi.jp/english/articles/20250820/p2g/00m/0bu/019000c

Ideas

As has been reported in other articles recently Japanese car makers reduced the prices of some cars and exported cheaper models to the US which reduced the value of Japanese exports.

For Japanese cars manufacturers and car parts producers its hard to plan correctly as they still don't know what the final tariff rate will be as it's still up in the air and it can change day to day.

Again, Japanese car manufacturers have started exporting less expensive cars to the US which of course will reduce the trade surplus.

The trade surplus is very important for the Japanese economy as its part of Japan's current account and offsets imports coming into Japan.

Japan is resource-poor country and has to import much of what it needs which reduces Japan's current account while exports increase the current account.

At the same time, lately, the only real economic driver for the Japanese economy has been exports as there doesn't seem to be any other real economic activity that increases economic growth.

An economic driver is any economic activity that significantly increases economic growth and Japan has very now.

Again, Japan is a resource-poor country which means it imports much of what it needs and crude oil and coal are key import commodities that Japan needs to function.

But again, imports deplete Japan's current account and lower import prices help to improve Japan's current account and helps to lower Japan's trade deficit.

Japan re-built its economy on exporting as they knew that the domestic economy was/is not strong enough to grow the economy alone, but it seems that Japan hasn't been able to harness any domestic economic activities to really help the economy grow besides exporting.

While the tariff rate at 15 percent is much better the timing of when it will be implemented is the key factor as Japanese companies still don't know when the tariff rate will go into affect which means they really can't plan much just yet.

Even at 15 percent most likely the large Japanese car makers will be relatively safe while the smaller car makers might have challenges absorbing the tariff rate and will eventually have to pass-on the rate to the next in the supply chain, unless the smaller Japanese car makers and their larger partner work together to the shock on the smaller car makers.

At the same time, Japan has thousands of small car parts manufacturers that are going to be challenged and their profit margins are probably too small to absorb the tariffs and they too will need to either pass-on the tariff rates to the next in their supply chain and or get help from the large Japanese car manufacturers.

Again, its not just the large Japanese car manufacturers such as Toyota, Honda, and Nissan that will be affected but thousands of small car parts manufactures and many other companies in Japan that export to the US. 

While the Japanese government can't help everyone they should target which industries or sectors they feel are the most vulnerable and find ways to help them such as the thousands of smaller car parts manufacturers in Japan they might make only one or two products used in cars.

And at the same time the Japanese semiconductor industry in Japan was just beginning to get back on its feet and finally back in the semiconductor game after losing significant market share to Taiwan and South Korea and is probably another vulnerable industry that the Japanese government needs look at and find ways to protect those companies.

The US economy is not as robust as it was a few years ago and prices seems to be increasing again, and if Japanese car makers pass on the tariffs rates to the next in the supply chain it might mean US Japanese car dealer ships will increase their prices and US consumers might not like the idea of more increased prices to deal with.

And then yes, US car dealer ships or whomever in the supply chain will say the can't or don't need any more cars as they can't sell the cars they have now on their lots.

Japan car makers maybe need to prepare for a slow year in 2025 or even 2026 and prepare their stockholders not to expect much growth the next few years until they can figure out how to deal with the tariff situation and or hope China's economy begins to growth again.

The Chinese economy is not in a good place at this time as its still dealing with internal economic challenges and still hasn't been able to work those challenges out just yet.

As the same time, Japanese car makers are experiencing robust competition from the up and coming Chinese car makers who are gaining significant market share daily and not just in China but globally too.

China is still a very significant market for Japan and Japanese companies like most global companies can't afford to give up on China as its surging middle class is getting bigger by the day.

Japanese companies probably need to re-set what it is they really want out of China and not expect too much as competition in China from Chinese companies it taking a lot of market share away from Japanese companies.

Aside from China being the weak link in Asia, at the present time the rest of Asia looks robust and looks like the markets in the rest of Asia are going to be a life-line for Japanese companies that might be seeing reduced exports to both the US and China.

And again, unfortunately the European Union is a weak link as exports to that area of the world just keeps getting weaker and weaker. 

Blame it on the Ukraine war and or weak demand in the EU or any other reason for the continued low exports to the EU.

Have a nice day!

Japan and Tariffs: Ideas Later: Updated Aug. 11, 2025

Japan warns of US tariffs after trade deal reached: monthly report

Article source: https://mainichi.jp/english/articles/20250729/p2g/00m/0na/041000c

Ideas

The Japanese economy doesn't grow very much and now with the tariff situation finished its going to grow even less, unless Japan can find some new economic drivers.

Even though Japan got a trade deal better than expected it's still going to have an effect on the Japanese economy but not as bad as expected.

The Japanese government is always saying the domestic economy is recovering moderately a as a way to not upset the financial markets.

Consumer might be picking up but Japanese consumers will never spend like US consumers do and maybe cultural differences make up a big part of it.

And it quite possible due to a labor shortage in Japan there might be more hiring now and companies are possibly increasing wages to keep workers and get new workers.

And its very good that the tariff deal removed the uncertainty in the marketplace as now companies have a better idea of what is going to happen and they can begin to plan accordingly.

Yes, even large Japanese companies, such a car markers have to worry about their profit margins and profitability as they are always concerned about their stockholders and what they think.

Back in the day, when Japanese car makers first entered the US market they relied on cheap cars just like other Japanese companies and they didn't worry about profits but only increasing their market share in the US. Those days are long gone of course.

Exports are never a complete linear upward thing but sometimes there are going to be ups and downs due to many variables relate to international trade.

Exports are an economic driver for the Japanese economy which is good but Japan has not been able to create any new economic drivers to help the Japanese economy grow.

Some might say foreign tourists coming to Japan and spending large amounts of money might be an economic driver but so far it hasn't helped that much.

It has to be remembered that only 30 percent of Japanese workers work for large Japanese companies and 70 percent of Japanese workers work for small and mid-size companies.

Wage increases for small and mid-size company workers were not the same as large company workers which could be a major challenge for the Japanese economy.

Yes, the tariff situation could have a major impact on the future growth of the Japanese economy, which has enough challenges without the tariff situation.

Again, the Japanese economy before the tariff situation was not in a good place and now its going to be in a even more challenging place.

If sales or profits are not what companies expect in the future, they might not hire as many workers and also at the same time might put off capital spending which is a big part of Japan's GDP.

And there is the constant challenge of private consumption or consumer spending which has never been that good in Japan except for maybe in the 70's and 80's when the Japanese economy was in its boom years.

The Japanese government and the Bank of Japan has to come up with some very creative ways to try and reduce the affects of the tariffs on the Japanese economy,

So to be fair the BOJ and the Japanese government haven't been able to steer its way out of the current stagnant state of the Japanese economy yet so there is not a lot of confidence that its up to the task related to the tariff situation.

Have a nice day!

Japan/US Trade Deal: Updated Sept. 25, 2025.

Japan, US reach deal on reduced 15% auto, 'reciprocal' tariffs

Article source: https://mainichi.jp/english/articles/20250723/p2g/00m/0in/005000c

Ideas

The Japanese trade delegation have to be congratulated for their effort to reduce the tariff to 15 percent after all of the Trump rhetoric about higher tariffs.

The 15 percent tariff is much better than the 25 percent tariff that was the intention of the US admin. But the problem Japan had to maybe offer 500 billion in investments in the US to get the tariff rate from 25 to 15 percent.

Yes, it was very good that Japan a major importer of Japanese goods to the US was able to achieve it did and actually might have had to best outcome of all countries in the tariff negotiations.

The rice situation might not be considered a negative for Japan is Japan has an-ongoing rice shortage situation so the idea of importing foreign rice might have always been in the works.

The challenge is of course getting Japanese consumers to like foreign rice when many Japanese prefer Japanese rice only. But if Japanese companies use the foreign rice to make other rice products then most likely it won't be a major problem.

The Japanese agriculture sector is one of the most protected sectors in the world and there was probably no way there was going to be any change in that sector in the tariff negotiations.

You have to take it with a grain of salt that the US will receive 90 percent of the 550 billion in investments by Japan into the US in the future.

And we need to take it with a grain of salt the hundreds of thousands of jobs will be created in the US due to investments by Japan into the US.

What Trump doesn't understand or doesn't want to know is trade is not a competition between countries but more of a cooperation among countries to import and export products for the good of both countries and both countries are better off with trade.

There is a very simple reason why Japan doesn't import US cars into Japan in that US cars just don't sell in Japan. For the most part, first Japan has eight car companies to choose from and the second part is most US cars are just too big for Japanese roads and streets as many Japanese cars are much smaller that US made cars.

European cars are much better for the Japanese streets and roads and there is a significant number of them in Japan but again they are still a small percentage compared to the number of Japanese cars in Japan.

Citing national security concerns might just be a reason to increase tariffs as they might be trying to protect US jobs.

But the problem is US consumers have a lot of choices now than just the 3 US car manufactures and US consumers are not going back as now they want and always want more choices than just US cars.

The problem with importing Japanese cars made in the US is cars made in the US are for the US market and engineered to US road and safety specification which might fit Japanese market and government specifications.

So that means Japanese car makers in the US would have to re-fit their assembly lines which could be very expensive for them.

And then there is the idea, which is not mentioned here that much is Japanese consumers just don't want US cars as for the most part, they are too big for Japanese style roads and the quality is perceive to be less than Japanese cars.

Japanese negotiators seemed mostly concerned with the Japanese car industry which is a major economic driver of the Japanese economy and and loss of sales and revenue would significantly affect the Japanese economy.

All other areas while important probably took a back seat to the real negotiations related to the car industry.

Again, not to say the other sectors or exports to the US are not important but Japan had to prioritize what was/is the most important sectors for the good of the Japanese economy.

Most likely, the tariff negotiations were just a starting point for other trade negotiations which was/is the real intention and not the tariffs.

For example if the US hadn't come up with tariff rate in the first place Japan and other countries for example might not thought of other strategies or angles to help them such a as the liquefied natural gas deal.

Again the tariff situation all along might not have been the real intention as they US wanted foreign investments such as the  550 billion investments related from Japanese companies.

The US probably knows it is now going to get all of the US manufacturing companies to come back to the US as the expenses might just be too much. So the other option was/is to get foreign companies to invest in the US and of course provide more jobs in the US economy.

Yes, it was/is a very good strategy by Japan to focus on investments as Japan might have known tariffs were not the real reason for countries exporting to the US but the intention all along was/is foreign investments in the US.

The signing of the agreement on investments might take some time to finalize as most likely both sides might want or want to change some parts of the agreement.

All countries today are interconnected and what happens in one country can have an affect on another country as supply lines are just too blurred these days.

Back in the day, it seemed countries were aware that what happen in one country can affect other countries as there was always a sense of fair play and trade was not a zero sum game but beneficial to and for everyone. 

But it seems, at least for the current US admin, they only think what's good for them and not what's good for everyone in the long run.

The agriculture sector has been and most likely will always be protected in Japan as agriculture is the heart of most economies around the world.

And yes, the auto sector is the backbone of the Japanese economy and will always take priority in any negotiations with foreign countries. 

The problem with Japan is that it really doesn't have any other sectors that can improve economic growth like the auto sector can.

Its a whole new world out there and international trade is never going to be the same after everything is done and finished if ever will be.

But then again, things could drastically change in four years as maybe an new US administration might come in and change everything again.

The US has always had a trade imbalance due to the nature of the US economy as a major consumer driven economy which means all countries want to sell their products in the US.

The US economy always has a trade deficit and always will as imports are more important than exports in the US.

Its a very common fact that US cars just don't sell in Japan and will never sell in Japan due to Japanese consume preference.US cars, for the most part, are not made for the Japanese roads and streets which are just too narrow and would not fit in Japanese roads.

And related to US agricultural products, again, the Japanese agricultural market is one of those protected markets in the world and it most likely will always be that way.

Again, its so simple to understand as the US economy has a trade deficit due to the fact that most countries want to sell their products in the US which is a major, if not the largest, consumer driven economy in the world.

The US is trying to have it its way only without thinking of what's best for the global economy or the long term.

The thing is, each country has a choice and the global economy is becoming a consumer driven economy with the global middle class getting bigger everyday which means consumers in other countries want and need new products, which eventually mean some companies in some countries might decide the US is not just worth it was there are other market globally that we can sell our products in now.

But it might take some time but that it could happen eventually as if the US is not interested in the global economy and what's good for everyone and other countries and other companies might just say its no longer worth it to sell in the US.

Have a nice day!

Japan Economy and Tariffs: Updated April 8, 2025.

Trump tariffs may push down Japan's economic growth by up to about 2%

Article source: https://mainichi.jp/english/articles/20250404/p2g/00m/0bu/004000c

Ideas:

The attempt of this analysis and commentary is not to just criticize what is going on with the US situation but to try to understand what and how its going to affect Japan and of course other countries globally. There are already hundreds if not thousands of hours of TV programs and articles written about what is happening so the attempt will be to give a different angle to what is already known.

The world trade order or trading order has taken about 50+ years to develop and its a very delicate system of supply chains and partnerships developed again over many years of countries working together to eventually find the common good for all.

And yes, unfortunately some countries have more market power than other countries which is why the World Trade Organization was set up to try and to minimize those discrepancies in the world trade system.

It's already known back in the late 1920's and early 1930's how the system was almost derailed with attempts buy one country to become too isolationist and or use tariffs for its own good at the detriment of all other countries.

So here we go again, with the US administration attempting almost the same thing with an attempt to re-configure the world trading system, and again its a very delicate system that cant be easily changed without disrupting a lot of financial systems and without harming people's lives. 

Unfortunately, Japan is always a quarter or two away from a recession and that has been its trademark fora very long time.

The Japanese economy has been built on exports and maybe again unfortunately its portfolio of exports is not large enough to handle a downturn. For example South Korea might be in the same situation and its export portfolio too is not as diverse as it should be as it too could be in for a projected recession. Both countries need to diversify their export portfolio such Japan needs to not rely on only Japanese cars and South Korea needs to not just rely on semi conductors to grow their respective economies.

The 0.7 percent over a year might be a good estimate but again, it might not even take that much for the Japanese economy to bottom out and again, Japan might be too dependent on Japanese cars as its main export product.

And again, using South Korea as an example, for many years its been known that South Korea had a very small export portfolio such as semi conductors and or course cars and for many years some have told South Korea to diversify it exports in case of a world recession which could happen soon. And now Japan too needs to heed to challenge to diversify its exports before its too late if not already.

Both Japan and South Korea maybe have relied on the US for its export bread and butter and needs to diversify as much  as possible to other markets if that's possible these days.

Yes, again, an estimate of 1.8 percent is probably correct but as always there are a lot of estimates about what is going happen to the Japan economy, but no one knows exactly just yet, as its still a little too early to see any affects of the tariffs.

This commentary will attempt to not use T's name here as it doesn't want to turn this commentary into a gripping session about what is happening. But things can quickly change and who knows 100 percent what is going to happen, as it's been seen before that T can change his mind many times before the end of his term.

Some have suggested that the tariffs T has implemented or going to implement are nothing but a negotiation tool to get other countries to reduce their tariffs.

T seems to think all or feel all countries are against the US and its economy and have stolen jobs away from the US. What T doesn't understand is the idea of absolute and comparative advantage that some countries, such as Japan and China can make products much cheaper or much better than the US can. And that has been the way of the trade system for many many years.

So the proposed tariffs by T might not be based on sound economic principles as it might be based on economic revenge or retribution just to satisfy his ego and power.

Again, the world trade order has existed, in its present form since WW11 ended and has been fairly successful for most countries. And yes, there are instances of market power and other weaknesses in the system, but its been the best trade system for most countries for a very long time.

What T has started could potentially be a trade war unless nations and governments can keep their cool and as needed, unfortunately, communicate their concerns to T's government. 

Communicating their concerns should not be a seen as sign of weakness or waving the white flag of surrender to T but as any country and many countries do they find ways to get around the situation the best they can.

And yes, it might be true that some countries have high tariffs on US products or products from other countries and maybe a country should look at what they can do with reduced tariffs from other countries.

We live in a global world of thousand of transactions daily of products moving from one country to another and maybe its time to look at how some countries continue to have high tariffs on some products.

To be honest, US cars are not that popular in Japan and maybe they never will be and whatever T tries to do, it's not going to improve the sales of US cars in Japan. T just needs to know and understand that the Japanese, and for the most part South Koreans, just don't need or want US cars. 

And, again, Japan need to diversify its export portfolio and not just relay on Japanese cars as its main export product and it especially needs to diversify into other markets, if that is even possible today and maybe they have saturated every market possible.

And here is a very important variable, in that there are many many subcontractors related to the Japanese car industry and US car makers too, and if tariffs are implemented on Japanese parts products they are going to hurt US cars too, which T seems to not understand.

Again, the Japanese administration should try and communicate their concerns to T and again its not a sign of weakness but a sign of practicability that there is always something to gain and always something to give in turn.

There are just too many US consumers who want Japanese cars and to not sell l.3 million cars in the US economy is not only going to hurt Japan but its going to hurt the US even more and there are many Japanese car dealerships in the US, and then there is all of the repair centers in the US and then there is all of the car parts stores in the US that could potentially be hurt by the tariffs.

The global economy is very blurred or unsure of what is going to happen now. and to be fair that seems to be what T likes, and he seems to like chaos and not calmness which the global markets need today.

Global stock markets have responded with a lot of uncertainty and a lot negatives and unfortunately a lot people have lost a lot of money over the past week, and its all T's fault.

Countries need to remain calm and not panic as panic is that last thing the global economy needs at this time.

Business confidence in Japan has never been that great lately and now with the US situation it might not get much better.

Japanese company wage growth is an important step to get out of the stagnation mode that the Japanese economy has been in for a very long time. Its been estimated too that wages in Japan are now some of the lowest among OECD countries.

The tariff situation is/could put a dent in Japan's attempt to end both stagnation and deflation and the country has been under cloud of both problems for many years and again the tariff situation doesn't help the situation.

An increase of 5.28 percent is good for large companies but small and midsize companies need to increase wages too, but many of them don't have the resources needed to match what large companies can do. At the same time some 70 percent of Japanese workers work for small and midsize companies and not the large name-brand companies.

Wage increases usually only happen in April of the new fiscal year, while inflation can increase any week any month of the year, so wages need to be enough to overcome inflation which then Japanese households can begin to feel good about their wage increases and begin to spend in the Japanese economy again.

It's good that Japanese companies increased wages for a second consecutive year, but who is going to pay for these wage increases. Are companies going to pass-on these wage increase through the supply chain until they reach the final retail customer.

But that's what companies do these days and they want to keep a specific profit margin and anything that decreases that profit margin gets pass-on through the supply chain including the final retail customer.

For a long time the BOJ under the former governor was very reluctant to tighten monetary policy as it thought that increasing the key rate would weaken the already weak Japanese economy.

So what is worse, the key rate being increased and or the side effects of the key rate. The Bank of Japan has to determine which might be worse for the Japanese economy. It's like taking medicine for some medical situation as the medicine might be good for a person but there are some side effects that could cause some situations in a patient.

Yes, that is the situation for many companies especially small and midsize companies that have very thin profit margins and can't afford wage increases due the increase of global raw material prices and or course the weak Japanese yen doesn't help too as it increase prices of raw materials.

So there might be a situation in Japan of the haves, the large companies that can increase wages and the have nots, the small and midsize companies that can't afford the same wage increases that the large companies are expected to do.

Yes, the tariff situation potentially is a deal breaker for some or many small and midsize companies who don't have the resources needed to overcome the tariff increases.

In this case, it might be prudent for the Japanese government to consider subsidies to help the small and midsize companies, like they did during pandemic.

Its uncertain, at this point if T is actually going to keep the tariffs permanently as he may or may not keep them as he says to always change his mind on things.

Escalating trade frictions could be a major sticking point, but the Japanese government has already indicated it's not going to retaliate and wants to find common ground with the US. 

That might be in Japan's best interest instead of taking the Chinese or the Canadian approach of escalating the so-called trade war.

To be clear business activities globally and not just in Japan are going to be hampered in the near-term until countries and companies figure out how to navigate the tariff situation.

Yes, unfortunately the global economy could be in for a decline and could affect many economies around the world, and for Japan it could keep Japan in its stagnation mode for a very long time unless the Japanese start to figure out how to navigate this situation correctly.

It might not be as severe as 2008 or it could be worse than the great recession and its again just too early to say whats going to happen but if the global stock markets are any indication its going to be a difficult ride for some and maybe many.

A GDP annualized growth of 2.2 percent is only an estimate of what the economy might do if it grew exactly the same for 4 consecutive quarters which it never does and especially doesn't do in Japan.

But three consecutive quarters of growth is good for Japan as it needs to keep the momentum going which it usually doesn't do as it always ends up a little and then down a little each quarter.

Potentially it could dampen Japan's GDP growth, but it should be remembered, Japan doesn't have a real free trade agreement with the US which seems kind of strange as Japan and the US are big trade partners.

There have been attempts like the Asia-Pacific deal but no one to one trade agreements exists between the two countries.If maybe Japan had some kind of free trade agreement that lowers tariffs for both countries it would go a long way to helping both countries.

And yes, again, potentially is could be a problem for Japan it doesn't have to be if the Japanese leaders can figure out a way to communicate what they need from the US, and maybe its time to reduce those huge tariffs Japan has on some US products. 

But if people are thinking if Japan reduces tariffs on US cars it might help car sales in Japan. Lowering tariffs on cars in Japan will never improve US car sales in Japan as Japanese consumers just don't want to need US cars.

Yes, again potentially it could reduce Japan's GDP by 0,7 percent, but if Japan had a more robust economy, that didn't rely only in exports it might not be that big of deal.

And Japan's economy seems to be too focused on exports while its domestic economy doesn't seem to get be as strong as it should be which should be a concern for the Bank of Japan and the Japanese government.

There seems to be a lot of numbers thrown around related to how much US tariffs are going to hurt Japan's GDP. While the shock has been sinking in to what could happen, at this time Japanese government leaders are in the US to find a way to limit US tariffs and maybe there might even be a new free trade agreement reached between the two countries.

The Japanese stock market like other stock markets expresses its disapproval of the tariffs with a major decrease in stocks and of course many people might have lost millions of yen in the process.

The tariffs T imposed on steel and aluminum is not only going to hurt foreign suppliers of those products but also any company or any US family that needs to buy steel and aluminum products in the future, as US companies are going to pass-on their tariffs along the supply chain until it reaches the final retail customer.

The same can be said for foreign cars sold in the US, as all tariffs are going to be passed along the supply chain and again to the final retail customer in the US.

To be fair, it seems T is just making up the numbers with no real economic or scientific reasoning behind the numbers. Tomorrow, next week, next month it could be something different.

That is very difficult for any company or even for the stock markets to figure out what he is exactly doing at this time.

Again, while Japanese cars have been a significant economic driver for the Japanese economy and the US remains Japan top market, and yes, thousands of small subcontractors are part of the Japan care production web, it should be noted that maybe Japan has relied on cars as its main and significant economic driver for too long as it needs other products to drive the Japanese economy now. 

The volume of exports to the US is good at 28.3 percent but again there should be a more diverse mix of products. For example at one time, maybe Japanese electronics had a larger share of the export mix, and what about Japanese TV's or Japanese washing machines and so which use to lead the world, but these days maybe South Korea and even China has more market share and even Taiwan related to TV's, electronics, washing machines and so on. Japan seems to have lost its way in some of these products.

Business confidence in Japan just isn't what it used to be as Japan has lost its swagger and doesn't seem to have much confidence these days. Japan back in the 60's, 70's, and even 80's led the world in making products and had a lot of confidence but not these days.

Gone is the swagger of the Sony's, the Mitsubishi's, the Panasonic's and even Toyota doesn't seem to have as much swagger as it used to.

Yes, Japan is at a critical juncture but its seems be at a critical juncture a lot these days and every time the Japanese economy begins to get back on track and get out of it stagnation phase it stumbles and its back into another recession type period.

Yes, the tariffs are a variable that Japan and the rest of the world wasn't looking for but, to be honest T is doing exactly what he said he would, and maybe definitely not Japans or any other countries fault but its the US who is at fault here for not listening and understanding what T had planned to do all a long.

Wage increases are needed in Japan and important as maybe Japan has some of the lowest wages and salaries among the OECD countries and yes, inflation since the pandemic continues to hang on in Japan while in the US it has decreased significantly on many items.

Not to blame anyone in the Japanese government and or the Bank of Japan, but you would think that something could have been done by now for the good of Japanese society and Japanese households.

The challenges is going to be what will the wage increases be for Japanese small and midsize companies as many of them just don't have the resources needed to match the wage increases of the larger Japanese companies. 

Up to 70 percent of the Japanese workforce,which means it they small and midsize workers don't get the same size wage increase that could potentially mean that is 70 percent of the Japanese workforce who are consumers and won't like their wage increases and won't spend in the Japanese economy is which needed for the economy to grow again.

The BOJ maybe needs to increase the key rate a few more times like the US did when it was going through its inflation challenges. But the real problem is can the Japanese economy handle the key rate increases which potentially could have some significant side effects related to the rate increase.

And again, even large Japanese companies are going to have challenge because of the increase in global raw material prices and the yen's depreciation and its could be even worse for small and midsize companies. Of course they can try to pass-on their costs to the next in the supply chain but sometimes that is not so easy to do.

The Japanese government needs to step in and aid the small and midsize companies with some kind of supplement that helps them reach the level of wage increases that the large companies are going to give. If not then workers at the small and midsize companies are going to be left behind and feel like have-nots compared to the large company workers who will be considered the haves of the economy.

Many seem to forget the trade war that developed between the US and Japan in the 80's when Japan was flooding the US with all of its low-priced but quality products. Many in the US were alarmed and upset that Japanese were gaining a lot of market share compared to US products. But the problem was not the Japanese products taking over the US markets, it was that the US products at that time were not very good and the US basically had become lazy and lost its way. Unfortunately the same could be said for Japan today.

Yes, Japan has relied on the world economy for a very long time to drive its economy and maybe to be fair, has somewhat neglected its domestic economy over its exports. Now might be a good time to re-think what it's doing and find ways to strengthen its domestic economy so that it doesn't have to rely so much on exports to the global economy.

The Japanese economy, all things being equal maybe looks like it has turned the corner on de-flation and or stagnation but GDP growth is just the tip of the iceberg as what happens in everyday life with Japanese households it what the real economy is and not some GDP number that most people can't relate too.

Finally the US tariff situation shook the global economy like no other event in recent history and not even the great depression of 2008 was like this situation, with stock markets globally losing billions of dollars or trillions on yen in Japan.

Not to be pessimistic but potentially it could get worse or it could almost change overnight if the correct leadership in the US finds a way to steer the US back into where it should be for the good of the world.

Have a nice day!