Bank of Japan News:

 https://mainichi.jp/english/articles/20210105/p2g/00m/0bu/081000c

Article:

TOKYO (Kyodo) -- After a tumultuous 2020, hit by the coronavirus pandemic, the Bank of Japan appears eager to deflect criticism that prolonged monetary easing will do more harm than good and years of pumping money into the economy has done little to boost inflation.

The BOJ's 2 percent inflation goal remains elusive, and there are even fears that the economy will slip back into deflation, a view that Governor Haruhiko Kuroda dismisses.

A moment of reckoning awaits the BOJ in March, when economists will scrutinize the bank's planned disclosure of assessment findings on how to make its policy more effective and sustainable.

Ideas:

The ideas challenging the BOJ's strategies are logical and maybe understandable. But the at the same time, without the strategies that the BOJ has used where would the economy be?

Would the economy be in the same position without the strategies? Would be economy be worse off? 

Because there are so many variables involved in an economy, its not easy to determine exactly which strategy is best.

The BOJ and any one organization trying to find what is the best strategy to keep the economy going, to keep it from getting worse, and or to grow it more is sometimes nothing more than guesstimates as to what to do, meaning know one really knows what is exactly going to happen 6 months into the future.

Article:

The dilemma is that it needs to keep easy monetary policy much longer than previously anticipated while addressing its side effects, including aggressive asset buying that has made the bank the top holder of both government bonds and stocks. Low interest rates have hurt the profitability of financial institutions.

"What monetary easing under Mr. Kuroda has made clear is that injecting money (into the economy) has not caused prices to rise. It's about time to look back on the policy steps that have been deployed and make adjustments," said Yuichi Kodama, fellow chief economist at the Meiji Yasuda Research Institute.

The difficult task for the BOJ is to secure some wiggle room for maneuvering without giving the impression that it is weakening the degree of easing -- or moving toward policy normalization -- when the U.S. Federal Reserve and the European Central Bank are on course to keep their expansionary monetary policies, analysts say.

Ideas:

Of course its always good to review any policy or strategy to see how it is working or not working and is it achieving its intended goal.

What maybe should be understood is that a policy or strategy, should clearly "do no harm" and or as minimal as possible.

While a strategy might not 100 percent achieve what it was intended do to does not mean it was a bad strategy.

As again there are so many variables involved in an economy, its not easy to exactly determine what the exact weakness were that might have caused a strategy to not work exactly as planned.

So to say the the BOJ as failed in its attempt to increase inflation might not correct. But what might correct is we might say the BOJ strategy at least might have prevented the Japanese economy from slipping further into deflation.

Yes there are always positives and negatives to any strategy, but the attempt should be to try and keep the positives more than the negatives.

For example, low interest rate might be good for businesses and households, but not so good for financial institutions. In this case the BOJ has to weigh the positives and negatives are try to balance them as much as possible.

There will never be a perfect strategy, but the goal should be to balance out the positives and negatives as much as possible.

Article:

The BOJ is seen as having little room to ease further despite its pledge to take additional steps when needed. According to Kuroda, the bank will examine whether its operations and policy tools, including asset purchases, have worked as intended.

"It is necessary to be nimble in making effective responses when needed to counter possible changes in economic activity and prices, as well as financial conditions," Kuroda told a meeting of the Japan Business Federation, known as Keidanren, in late December.

A review of the central bank's buying of exchange-traded funds is seen as a likely scenario because it has helped buoy investor sentiment, but critics say the unusual practice for a central bank has distorted stock markets.

Ideas:

The Bank of Japan should be, as much as possible, as flexible as possible. It should be able, as needed to change policies and strategies to help the economy.

However, it always needs to be aware that too much change and or too fast or too slow is not good.

The BOJ needs to be aware, as most central banks are, that investors, stakeholders or whomever watch very carefully what a central banks says and does. And as such central banks are usually very cautious about what they say, because just one announcement or something similar can easily move stock markets in a positive or negatives manner.

As such market distortion can turn into a reality very quickly if some strategies are not looked at for all the potential negatives and positives.

Article:

Meiji Yasuda's Kodama said the BOJ would want to move toward reducing the amount it buys. Due to the pandemic, the bank has set a 12 trillion yen ($116 billion) annual pace as its upper limit for ETF purchases, while it also pledges to buy at a pace of 6 trillion yen a year "in principle."

"The onus is on the BOJ to consider how to present any change and communicate its intent. If economic conditions are not good, the BOJ can, for instance, remove the limit saying that it is part of further monetary easing. But you cannot use the explanation when the economy is recovering," Kodama said.

When Japan was hit by its initial wave of coronavirus cases and economic activity was depressed in the spring, the bank removed its cap on buying of Japanese government bonds after the actual amount purchased was much smaller than the limit of 80 trillion yen a year.

In recent months, Japan is struggling to cope with record numbers of infections that have increased uncertainty about the economic outlook despite a modest recovery expected by economists.

Ideas:

The BOJ, like all other central banks, has recognized that the usual policies and strategies to help and economy might not work as the pandemic as almost turned most economies in deep recessions and or near depressions.

As such central banks, like the BOJ, need to develop new ways to thinking to help the economy as much as possible. If that means doing things that might not have even been considered then its needs to do everything and anything that is needed, and throw out old and tired ideas, conventional ideas to help the economy.

The BOJ needs to have some bold moves over the next six months to help the economy, not only truly recover but to get back to some kind of normality and not a "new normal" as has been thrown around recently.

Article:

The BOJ's swollen balance sheet has stoked concerns about its massive asset holdings, which would have to be reduced in future.

The bank has gobbled up Japanese government bonds to keep borrowing costs low and stable under its "yield curve control" scheme and currently owns some 45 percent of the outstanding debt issued by the state.

As of the end of November, it owned ETFs worth about 45 trillion yen in market value, according to an estimate by Shingo Ide, chief equity strategist at the NLI Research Institute. That is roughly 7 percent of the market capitalization of firms listed on the First Section of the Tokyo Stock Exchange.

Ideas:

The ideas above maybe be warranted under normal economic conditions and or under normal recessions, but this is not a normal recession type situation and it might not improve much in the future. 

So worrying about how much asset or debt holding the BOJ has is probably not the best time for that thinking.

While the Japanese economy has shown signs of recovery here or there it is a long way back to normal.

To put on any brakes now and or reduce BOJ activities now could be more of a negative than a positive.

Conventional theory might be correct, in normal times, but these are not normal times, and as such, the BOJ needs to do whatever is needed or necessary in the current economic conditions.

Article:

The 225-issue Nikkei Stock Average ended 2020 at a 30-year high, drawing a sharp contrast with an economy still struggling to return to pre-pandemic levels.

"ETF programs are supporting stock markets at a time when they are flying too high and need a flexible approach," said Martin Schulz, chief policy economist at Fujitsu Ltd. He expects a difficult review on "almost all levels" for the BOJ, which has served as a "policy trendsetter."

As the Japanese economy has seen its inflation rate far below 2 percent for a long time, Schulz said the BOJ can be more effective in providing incentives for growth beyond the pandemic rather than simply aiming at an elusive goal.

Ideas:

For many reasons, stock markets seemed, in recent times, to act differently than what is really happening in the real economy. Sometimes its like stock markets are in "their own little world" compared the the real economy that is taking place at this time.

Some might say the stock market may actually be a "bubble", meaning stock prices are too high or "artificially" high for the realities of the real economy.

The BOJ has been trying to get the inflation rate to the 2 percent level for a very long time.

Maybe the idea that an economy needs to have a 2 percent inflation rate is not really needed.

Perhaps an inflation rate well below that is the natural rate for the Japanese economy and as such the BOJ should focus on more pressing needs to help the economy in the current situation.

Let the inflation rate, as much as possible, assume a natural course and focus on more important areas. 

Article:

Japan's core consumer price index, excluding volatile fresh food prices, dropped 0.9 percent in November from a year earlier, the biggest decline in a decade. According to the BOJ's forecasts, the index will rise 0.4 percent in fiscal 2021 and 0.7 percent in fiscal 2022, still a far cry from 2 percent.

Kuroda has clarified that the bank will not overhaul the current easing framework, under which it maintains short-term interest rates at minus 0.1 percent while guiding long-term rates around zero at present through Japanese government bond-buying. The "yield curve control" program was introduced in 2016 after a comprehensive policy review.

Ideas:

Again the BOJ should not concern itself, at the present time, with the changes in the core consumer price index, maybe make sure they remain within a certain level and not get too low or even too high. 

Perhaps the idea should be again, to let them drift in an natural way, and not be too concerned but focus on helping businesses survive the pandemic.

How much does a drop of 0.9 percent really affect a family or even a business? And how exactly can the BOJ predict a 0.4 rise and or a 0.7 percent rise in the future with so many variables that could inhibit growth.

The easing framework of course might be good for businesses and households but most likely not good for financial institutions. So the BOJ again needs to look at the positives and the negatives or the current strategies as to who is it benefitting the most.

Article:

"We do not expect drastic monetary easing that would impact rates or the yen in 2021, as long as private banks' lending standards improve and the currency is stable," said Daiju Aoki, regional chief investment officer for Japan at UBS Wealth Management.

"As part of its review of current policy measures, we think the BOJ will enhance its lending program further, targeting more corporate investment for economic transformation such as digitalization and green investment," Aoki said.

Ideas:

Again the BOJ needs to make sure which policies are working for the overall good of the economy, and measure the positives and negatives of its strategies.

And its good to look to the future and create new strategies for new industries and innovations that might take place.

But the far more important need is now, and helping business from going to, helping them to survive the current situation.

This is not the time to "let the market" decide which businesses will survive and which will die under normal market conditions.

As the Japanese economy, at the moment, is not under normal market conditions.

Japan Economy Expectations:

 https://mainichi.jp/english/articles/20210104/p2g/00m/0bu/063000c

Article:

TOKYO (Kyodo) -- Japan's economy is expected to make its sharpest rebound in decades this year, with consumption set to pick up toward the end of 2021 as the impact of the coronavirus pandemic on the broader economy eases.

The world's third largest economy is projected to grow 3.42 percent in the next fiscal year to March 2022 following a 5.37 percent shrinkage this fiscal year, according to the average forecast of 35 economists polled by the Japan Center for Economic Research.

If the estimate is borne out, it would see a turnaround from the worst contraction to the highest growth since fiscal 1995, when comparative date became available.

Ideas:

Its very good to be optimistic but it might be a little too early to say how much the Japanese economy is going to rebound.

If it does grow 3.42 percent it would be extraordinary considering how much the economy contracted in 2020.

But it must be remembered an economy is very complex and has many different sectors and not all sectors and companies grow equally, not in a normal period and especially coming off of a contraction it might take some time for many sectors and businesses to get back their pre-pandemic level, if they do all at.

For example, how long is it going to take for the airline industry, the hotel industry, the restaurant industry, and the overall tourism industry to get back to some kind of normal or even a new normal?

Article:

The government aims to bring the economy back to pre-pandemic levels with help from stimulus measures next fiscal year. But economists said such a view seems too optimistic and that a recent resurgence of infections with new virus variants emerging could even stall the recovery in early 2021.

Consumer spending is poised to gather momentum as COVID-19 vaccines become available for widespread use by summer and would also get a one-off boost if the postponed Tokyo Olympics and Paralympics go ahead from July as currently planned.

"Japan's economy is going to benefit from the effect of nationwide vaccination," Atsushi Takeda, chief economist of the Itochu Research Institute, said.

Ideas:

Stimulus measures are more than needed now and in the future. It might take a few more stimulus even as the economy is beginning to turn around as again not all companies or sectors are going to come back at the speed.

Consumer spending is always a key component of an advanced economy and Japan is no exception. But the level of consumer spending is very dependent on jobs and the future and what consumers feel and think. If they feel their jobs are safe and secure and or they see a brighter future ahead then there is the possibility that consumer spending could begin to get back somewhat to pre-pandemic levels.

If the virus situation drags on a there are areas in the economy is not coming back very fast then consumers/workers in those industries are not going to spend like before the pandemic.

And if there is continued news that the pandemic is not ending soon that might also affect even more consumers/workers in other areas of the economy.

But of course if Tokyo is able to pull off the Olympics as planned that might help boost the economy some, but some recent reports indicate that not everyone, at this time, think the Olympics are a good idea.

Article:

Prime Minister Yoshihide Suga has promised to procure enough vaccine shots for the nation's needs by the first half of 2021, and the government estimates 4.0 percent growth next fiscal year.

The domestic economy shrank an annualized real 29.2 percent in the April-June period from the previous quarter, possibly the largest contraction on record since 1955, according to the government.

Roughly a month long state of emergency declared last April brought many businesses to near standstill, with spending on trips, eating out and shopping falling sharply amid stay-at-home requests.

Ideas:

Right now Suga and company are weighing the positives and negatives of another lockdown emergency, with knowing full well how much the economy contracted in the April-June period.

If there is there a way to not declare an emergency and at the same time save jobs, businesses etc. I'm sure they are looking at all possible options.

Unfortunately, there might not be many options left, but at the same time, how much of a lockdown can the economy manage without full-scale budget supplements and stimulus to those businesses and companies in need including families and workers.

There probably is no best idea out there but what idea or strategy brings the least amount of damage to the economy and businesses. 

Article:

The economy rebounded in the following quarter with annualized 22.9 percent growth as economic activity restarted gradually. The July-September period's real gross domestic product totaling 527.14 trillion yen ($5.1 trillion) on an annualized basis outstripped 500.63 trillion yen in the previous quarter, though it was still below 545.72 trillion yen in January-March, before the virus had a full impact on the economy.

With Japan having maintained recovery momentum into the final quarter of 2020, the Tokyo Games will likely offer an opportunity to propel spending this year, economists said.

The Organization for Economic Cooperation and Development last month raised its forecast for Japan's growth for 2021 to 2.3 percent, saying the summer's games will "temporarily boost consumption."

The NLI Research Institute estimated in March that the postponed games would carry over demand worth 2 trillion yen to next fiscal year.

Ideas:

While the April-June contraction was huge the 2nd and 3rd quarter growth was also huge but of course not a pre-pandemic levels. Quarter may grow equally as quarter 2 and three but not at the pre-pandemic level.

What needs to be understood again, while there is economic growth in the 2nd, 3rd, and 4th quarters that doesn't mean there was equal growth in all sectors. It is well known there are many services sectors that are not doing so good. The services sectors had the most contractions compared to other areas. 

The summer games might boost some consumer spending but how much are Japanese consumers really going to spend on the games? The games and the economy need foreign tourists to really spur consumer spending and unless the Japan can open the economy again for tourists during the games, Japanese consumers alone might not be enough to boost overall consumer spending.

Article:

The Itochu Research's Takeda said the games will not just lift personal spending but also strengthen consumer confidence.

"Fostering an atmosphere that we have been able to hold the games by bringing the virus spread under control is important for the economy," he said.

If coronavirus vaccines become available as expected, service businesses such as entertainment, transportation and travel companies will be among the sectors to reap significant benefits, Toshihiro Nagahama, chief economist at the Dai-ichi Life Research Institute, said.

"Domestic consumption in the service sector could possibly normalize in the latter half of the year" with restrictions removed on human mobility and personal contact, Nagahama said.

Ideas:

This all sounds good and well, but the question remains how fast can the economy get back to some kind of normal and how fast can Japan get the vaccine into the economy is the real question.

Just the idea of being able to hold the games helps but the economy and consumers need to see sustainable progress and if not, consumes are still going to be hesitant to move around and spend in areas such as services that really need help.

Not to be negative but part of the problem was how long last winter and spring did it take the Japanese government and the Tokyo government to admit that there was a problem. Of course  the idea was because of the summer games they were trying to minimize the virus as long as they could to salvage the summer games for 2020.

And maybe the same thing is happening now, as they decide what to do with the 3rd wave that has hit Japan in December.

Article:

If, on the other hand, vaccination falls behind schedule, it would "jeopardize" the country's efforts to host the games and consumption in the service sector would "continue to be forced into stagnation," he added.

The recovery scenario could be complicated by record numbers of new virus cases reported since November. Japan has confirmed more than 230,000 infections with the tally of daily cases topping 4,000 for the first time Thursday last week.

Requests were issued again recently for reduced business hours at establishments serving alcohol and avoiding nonessential outings. The government last month suspended its nationwide travel subsidy program over the New Year holidays. It was the first halt to the campaign since it was launched last July to spur domestic travel demand.

Ideas:

Most likely exactly right. If Japan can't get the vaccines moving forward as soon as possible, there could be even more challenges for the economy and especially the services sectors. 

The idea of reduced business hours is a tricky challenge. It might help or might not help, depending on who goes where and when. 

The Go To Travel campaign, at the time, might have been a good idea, but again no one expected a surge or a 3rd wave.

The strategy in itself can't be blamed as the idea was to spur the economy and especially the services economy areas. 

Article:

These anti-virus measures add to uncertainties along with the lagging impact of the pandemic on employment and income, some economist said.

"If virus infections keep spreading, companies will have to prepare for prolonged poor earnings," Shinichiro Kobayashi, a senior economist at Mitsubishi UFJ Research and Consulting Co., said. "They might have to adjust their payrolls, cut wages, and in the worst case, some may have no choice but to go bankrupt."

He forecast the economy will contract an annualized real 0.5 percent in the January-March period in 2021.

Ideas:

Yes a prolonged virus situation will not be too good for the economy. For the most part, in some situations the Japanese economy and Japanese businesses have take a very different approach than their western counterparts. 

Japanese companies usually are not a quick to layoff workers or even cut salaries as they usually take a long term approach or strategy to downturns.

Western companies are quick to layoff, cut salaries and so one even after one not so good quarter. While Japanese companies are not so quick no normal not so good times.

But the Japanese economy is not in "normal" not so good period. 

In the spring of summer ANA for example, decided to trim salaries but keep everyone on staff.

Some Japanese companies have used the strategy of loaning out or transferring their staff to other companies when the company is unable to use or need the staff for the decided future. 

You might not see that in the US or the EU.

But if the virus situation continues on and the vaccines don't arrive soon enough Japanese companies may have not choice resort to some kind of layoff strategies to survive.

Have a nice day and be safe!

Japanese Company Expectations:

 https://mainichi.jp/english/articles/20210103/p2g/00m/0bu/021000c 

Article:

TOKYO (Kyodo) -- Some 72 percent of major Japanese companies expect the economy to expand at a moderate pace in 2021 amid hopes that the fallout from the coronavirus pandemic will subside, a Kyodo News survey showed Saturday.

Despite such a positive outlook on the world's third-largest economy, more than a quarter of the 109 firms in the survey, or 29 percent, said they are not sure when their sales will return to pre-pandemic levels, and 13 percent expect any recovery to materialize in 2023 or later, indicating that corporate Japan remains cautious about their businesses.

A sense of caution prevailed toward the end of 2020 as Japan was hit by resurging coronavirus cases. It came as the Japanese economy was gradually rebounding from its worst contraction in the April-June quarter when Japan was placed under a state of emergency over the novel coronavirus.

Ideas:

When I write I am not sure exactly what I want to say. But once I start writing then the ideas begin to come. The ideas may not be correct, and as such as such they are just ideas, nothing scientific or maybe not even related to academic theory, just ideas.

Companies are taking a very conservative approach in saying a moderate recovery. They don't want to take a chance and say anything more less they upset stockholders if they are a publicly traded company. Better to take a safe a approach for 2021.

Only 29 percent are not sure they if can return to pre-pandemic levels. The figure could actually be higher but again, some companies want to show some kind of moderate confidence but not too much confidence.

The same might be said for capital spending or investments by companies. They most likely will take a wait and see approach unless they really need to equipment, factories and such.

Article:

Prime Minister Yoshihide Suga had sought to balance supporting the economy and tackling the health crisis but his handling of the pandemic has been called into question.

The survey found 72 percent see moderate growth, followed by 17 percent that expect economic conditions to remain unchanged. Some 2 percent said the economy will expand, while another 2 percent project a moderate contraction, according to the survey.

With multiple answers allowed, 64 percent of the firms expecting economic growth in the year ahead said the impact of the pandemic will stabilize and 47 percent cited recovering private consumption. Some 32 percent picked a recovery in overseas economies and 14 percent pinned hopes on the effects of economic stimulus by the government.

Ideas:

I think its seem logical to try and help the economy and try manage the virus situation. Its a catch 22 situation, meaning just doing one or the other will cause problems for whatever one is being neglected, or so it seems.

But no one of course expected a third wave. And as such it seems that trying to fix the virus situation might have been the best choice, but also of course, neglecting the economy, might have made the economy even worse. 

Again the survey results appear to be somewhat modest but the same time trying to show maybe investors we think it might grow somewhat in 2021.

The ideas of recovering private spending or consumption sounds good. But if the virus situation continues one, just what kind of recovery and how much can be expected. 

At at the same time, consumers don't want to just sit and not spend, in many situations. So there might be a time when there is some kind of significant consumer spending surge. As they are tired of just waiting for the virus situation to change. It might be online spending or shopping only but there could be a real and significant surge if there is a hint of daylight at the end of the virus tunnel and or consumers are just tired of it want to do something and just start hitting all the online sales.

Article:

Economists say uncertainty over the economic outlook will persist with vaccines and treatment drugs for COVID-19 seen critical, after virus outbreaks led to lockdowns in some countries and depressed economic activity and travel. The Japanese government projects a 4.0 percent expansion in real gross domestic product in fiscal 2021 from a year ago.

The Kyodo News survey showed an increased shift toward digitalization to cope with the spread of the virus as all companies introduced teleworking and 99 percent said they promoted online meetings.

Digitalization is one of the priority areas for Suga, who has seen his support ratings plunge in recent weeks after his honeymoon period ended.

Ideas:

There is still a lot of uncertainty and even as some countries begin with the vaccines, there still might be the virus situation.

But at some point there will be the need to try and normalize regular things as much as possible.

But at the same time, the idea of teleworking might be here to stay. How much exactly is yet to be seen. Workers might not want to go back to the office completely. 

Welcome to the real 21st century where the idea of having to go an office from 9 to 6/7/8 might be a thing of the past for some companies.

And some companies might see it as a competitive advantage to promote that they are teleworker friendly especially for younger workers or working mothers.

The Japanese government is of course trying to be optimistic with a 4.0 percent increase in GDP in 2021. But that is not really much compared to how much the economy contracted in 2020.

Article:

Among the prime minister's policy items, 29 percent said they support the creation of a digital agency that will be tasked with digitalizing administrative work, followed by 28 percent that are in favor of promoting regulatory reforms.

Some 20 percent backed the government's efforts to fight global warming, while only 1 percent were in support of the administration's move to lower mobile phone fees that it sees as higher than in other countries. Major mobile carriers have yielded to government pressure and announced cheaper options in what is shaping up to be a price war.

Suga has promised to expand support for often costly fertility treatment as Japan faces a declining birth rate. About a third, or 33 percent, do not have a support system for employees who receive fertility treatment, while 64 percent said they already have one in place or are considering creating it, according the survey.

Ideas:

The idea of regulatory reforms, when it comes to business might be a good thing, as long as everyone plays fair. Many time business regulations are setup to try and level the playing field but in fact most times they actually reduce business activities. So if the regulatory reforms actually help improve business activities then its a good thing. 

Its interesting that only 1 percent support a reduction in mobile phone fees when the fees are higher than most countries. 

A price war might not be a bad idea if it helps consumers and at the same time doesn't cause some companies to leave the market. 

Not all price wars are good as many times the largest companies always win and the smaller companies always lose out. But if the price war can help reduce prices for consumers and not hurt the smaller companies then it could be a good thing. 

Article:

Ahead of the launch of an administration by U.S President-elect Joe Biden in late January, 35 percent expect he will promote free trade and 18 percent said the Democrat would seek to accelerate economic growth.

Kyodo News conducted the survey between mid-November and early December, targeting major companies in each sector. The 109 firms include Toyota Motor Corp., Sony Corp., Seven & i Holdings Co. and ANA Holdings Inc.

Ideas:

Again companies are going to take a wait and see approach on 2021 but at the same time try act like the think there will be modest economic growth. They don't want to sound to optimistic as not to get the hopes of investors to high. 

With free trade there are always positives and negatives depending on where you are at. But no doubt Japan is well positioned to with China, the US, and the new trade pact that was recently signed. And with Japan and the UK agreeing on a pact Japan trade looks promising for the future.

Have a nice day and be safe!

Japan Govt. Economic View: In the Process of Re-formatting each blog for 2020, 2021, and 2022.

 https://mainichi.jp/english/articles/20201222/p2g/00m/0bu/092000c

Ideas:

Consumer spending is always a concern for the Japanese government. But of course its even more of a concern now related to the virus situation as some consumers tend not to go out as much and or spend as much as they are concerned about jobs, the future, and the spread of the virus. 

But of course the government always try to say something positive, the same anywhere, but the phrase " but is showing movements of picking up" is normal government language to try and signal to whomever, that its not all that bad, things are showing some improvement.

But then it becomes more clear which is quite true in any complex economy, there are sectors that might be doing better than other sectors. 

But this is true even in a normal economy. Even in a normal pre-pandemic economy, there are positives and negatives, there are some sectors that are always doing better than other sectors and there are always some businesses doing better than other businesses.

The "Go To Travel." maybe at the time, was a sincere attempt to spur economic growth and get some kind of domestic travel moving again. But maybe no one, anywhere in the world, including Japan, expected a third wave as severe as it is now.

Consumer spending is always a challenge for Japan, even though it makes up maybe 50 percent of GDP. 

Its interesting that consumer spending on cars during the pandemic is remaining firm, as you would think, as cars are a big spending investment that consumers would be more cautious about"big spending" items such as cars, appliances, or homes.

But at the same time "socio-economic" activities of course are the biggest losers or challenges in the pandemic.  Services, travel, retail, restaurants might be the biggest losers.

However, as anywhere companies learn to innovate, as best they can, such as new delivery systems, new online shopping portals and choices for consumers.

Those who can learn to innovate in the pandemic. But there are thousands of businesses that maybe don't have the resources needed to innovate.

And at the same, maybe no amount of innovation can help some businesses. How can travel agencies really innovate if there is no consumer demand or very little?

This is where governments should step and help those businesses with a much help as they can, and not just a one time offer. There needs to be multiple efforts to keep small and medium companies going. 

This is not the time to say "let the market decide" who survives and who wins. This is a challenging time that is not related to normal market or business actions. 

Exports only make up about 20-25 percent of the Japanese economy. Even though that doesn't seem like a lot it is a large part of the world's third largest economy.

Again the question remains with the pandemic as it is, why are cars selling as good as they are?

Not to say the pandemic doesn't affect everyone, which it does, but maybe there is a segment of the population, anywhere, is not as concerned about their jobs or future, and as such feel free to spend on a new car while there are of course millions everywhere who are worried about the future and jobs etc.

It just shows how an economy is very complex. As such you have those who might not be worried about jobs and future in the pandemic and you have who are really affected by the pandemic and don't even consider a new car at this time or the near future.

The idea of solid demand for semiconductor related products is not surprising due to the increased work from home and students taking online classes, so the maybe the need for new products such as PC's notebook computers, tablets etc.

The global economy. maybe in the early fall, showed signs of picking up but now the third wave probably will cause much of the global economy, with the exception of China, to slow down again in the next couple of months.

But again we have add a exception. The global economy, like any domestic economy is very complex with many global sectors.

We live in a global economy, that is very integrated, with some areas, such as car production and sales going somewhat good, and then the global airline industry, which of course is at an all time low at this moment.

So again we need to be careful and not paint a picture of complete gloom and doom as in the pre-pandemic period, there are still positives and negatives, but of course there are more negatives at the moment. 

Its important to see just what is being said here. The government is not saying corporate profits are on the rise but that they are not decreasing as much as before. 

The Tankan  business sentiment, feeling, survey just indicates a point in time about how companies might be feeling. It doesn't actually mean they are going to do anything different than what they are doing now.

Companies, most likely, are still taking a "wait and see" approach or a very cautious approach until the see consumer demand or business demand begin to improve enough that they feel good enough on increasing production, investments, and or an increase in services again.

Only the most needed capital investments, mostly likely are going to take place at this time.

But again, an economy is very complex. There might be some sectors and businesses are are doing reasonably good and feel is OK to spend in capital investments while some are going to take a wait and see approach.

And some use this strategy. When the economy is down and or business is not as good, is actually the best time for capital spending or even re-tooling their business for when the economy and business conditions get back to normal.

Have a nice day and be safe!

Japan Convenience Store Sales:

 https://mainichi.jp/english/articles/20201221/p2g/00m/0bu/089000c 

Ideas and Analysis:

There seems to be two trends related to convenience store sales; sales seem to be decreasing but average spending per person seems to have increased.

The article doesn't mention online sales of convenience stores, which might be a way to increase sales with some stores.

For example, a combination of online sales and deliveries to customers nearby such as in business offices and other places if those still working in offices don't want to go out for their lunch of convenience store bento, lunch sets, and or onigiri, triangular rice, green tea, and or whatever they might want for their lunch.

Of course it might not be profitable to do deliveries for just one small item from a convenience stores but convenience stores could look into the idea of a minimum order for a delivery to an area close to the stores.

There would seem to be a lot of room for innovation in the convenience store market.

As with previous articles it has been shown that with the virus some office workers are working from home and not visiting the convenience stores near where they work.

It interesting like the Japanese car market there are seven major convenience store operators in Japan. It would appear that both the car market and the convenience store market that seven or eight operators would be too many for all to survive. 

The Japanese market is very competitive but at the same time there seems to be some kind of symbiotic relationship of cooperation and or "live and let live" cooperation in that companies are not out to dominate the market and seem to accept a lot of players in the same market. 

The idea of a "live and let live" existence seems to be in many sectors in the Japanese market. Competition yes, "but we are not going to dominate and force you out of the market." 

I also see a somewhat balanced economy in that small business, medium sized businesses and large conglomerates, for the most part, seem to have a symbiotic relationship in that small companies are just as important as the large well known global companies. 

The heart of any economy around the world are the small and medium sized businesses, but in Japan, even more, the small business seemed, before the pandemic, to be the backbone of the economy and society. 

Yes the major output of any economy are large businesses that get all the news but the small and medium size business really drive the Japanese economy, or so it seemed, before the pandemic. 

The Japanese economy and society thrives on relationships and that is no more apparent than the web and symbiotic relationships that exist among the small and medium sized businesses that operate in some form and connection with each other and the large companies that they may provide services and or products to each other.

Have a nice day and be safe out there!