BOJ Assessment:

 https://mainichi.jp/english/articles/20210114/p2g/00m/0bu/058000c

Article:

TOKYO (Kyodo) -- The Bank of Japan on Thursday maintained its economic assessments on five of the nine regions amid a resurgence of coronavirus cases as Governor Haruhiko Kuroda expects the pace of recovery to be modest.

In its quarterly Sakura report, the assessment on Hokkaido in northern Japan was downgraded due to a slowing recovery while the BOJ raised its view on the remaining three regions, Hokuriku, Shikoku and Kyushu-Okinawa.

The economy was in a "severe" situation in many regions due to the pandemic, but signs of a pickup have emerged, the BOJ said.

Ideas:

No real news here as the BOJ regularly assess different regions based on the trends in economic conditions and of course now the economic conditions related how the pandemic is affecting each region.

There might be a pickup but will it be enough? Of course any pickup is better than no pickup.

A modest recovery would be very good. But the key is how sustainable will a modest recovery be? 

And of course the BOJ is being very conservative and not being to optimistic and the Japanese economy has been up and down over the last year.

Article:

The report came amid reignited fears of a double-dip recession following a resurgence of the virus toward the end of 2020 and Japan's struggle to stem the rise.

Prime Minister Yoshihide Suga declared last week a new one-month state of emergency in the Tokyo metropolitan area, and expanded the measure to Osaka and six other prefectures on Wednesday.

Kuroda said earlier in the day that the BOJ will take additional easing steps if necessary to support the world's third-largest economy.

Ideas:

No doubt the Japanese economy in 2020 and beyond has been going through period of growth and periods of decreased growth.

Of course globally the same thing has been happening in many countries.

Whatever steps or measures are needed the BOJ needs to do what they can to keep the Japanese economy moving forward as much as possible.

Now is not the time to take a wait and see approach. Now is the time to move and act as needed as many businesses and families are not doing very good, with many businesses going under at this time.

Article:

The five regions with no assessment change include Kanto-Koshinetsu, which has Tokyo, the worst-hit among all prefectures, as well as Kinki in western Japan covering Osaka.

The fuller impact of the state of emergency, targeting 11 of the country's 47 prefectures, slated to be put in place until Feb. 7, has yet to be factored in.

The Sakura report pointed to sluggish consumption. Economists have warned that the second state of emergency will hurt private consumption, accounting for more than half of Japan's gross domestic product.

Ideas:

Sluggish consumption or spending as always been a concern of the BOJ, as they feel consumer spending it not at its potential.

But a key question, related to consumer spending, is there really a potential level needed for the economy to continue to grow at its potential/

Yes, consumer spending in Japan is about 50 percent of GPD, so in that case if you measure consumer spending and it doesn't always reach the 50 percent level, then maybe it is not where it should be.

Can the economy grow if consumer spending is only at the 45 percent level of GDP?

The need to always monitor consumer spending is an important measurement but if consumer spending dips from time to time, is that a time to panic?

And especially now with the pandemic, it should be a given that consumer is most likely not going to reach its potential as consumers not to interested in going out as spend and or not even interested in spending online for some consumers as the are worried about jobs and and their income.

Article:

The services sector, in particular, has been dealt a severe blow amid the pandemic as people stay at home and refrain from dining out. Under the latest emergency measure, restaurants and bars are asked to close at 8 p.m.

"We are normally fully booked during the New Year holidays, but it was disastrous (this year) that the room occupancy rate was below 50 percent due to the resurgence of infections and a subsequent suspension of the 'Go To Travel' campaign," an official in the hotel industry said.

"The declaration of a fresh state of emergency targeting the metropolitan area is leading to more cancellations," the official was quoted by the BOJ in the report as saying.

Ideas:

The services sector is the one area both the government and the BOJ need to help as often as possible.

Maybe for some an increase in the monthly subsidy as maybe the subsidy doesn't cover all of a restaurants expenses. 

Hotels, airlines, restaurants, travel and tourism related businesses all need help during this time, and as much as possible.

The more the better with many businesses, as they live day to day with the worry will they survive the pandemic.

Article:

All nine regions said production was either picking up or increasing, helped by a recovery in auto and semiconductor demand. But all areas cited weakness in employment and income conditions.

The latest state of emergency, covering more than half of the Japanese economy, will be effective until Feb. 7.

The country previously issued an emergency declaration over the virus in the spring of 2020. That led to a sharp economic contraction as consumption and business activity took a hit.

"The pace (of economic recovery) will likely be rather moderate while there remains a sense of alert against infections," Kuroda said during a virtual meeting of the BOJ's regional branch managers.

Ideas: 

The pandemic has affected many industries and regions differently, just like in a a regular normal economy, there are always going to be positives and negatives, as some industries do better than other.

But of course the pandemic has increased the negatives. 

The auto industry and semiconductor industries are the exceptions that seem be doing well globally.

The increased demand for semiconductors is understandable as the need for chips in phones, tablets, notebook computers have increased due to the demand for the use at home for teleworking and the increase in online classes in schools.

But the demand for cars is a little not so understood as consumers globally, are concerned about jobs and future incomes.

And at the same time, it might indicate that there might be certain segment of the global population, including domestic consumers in Japan, that have not be as affected by the pandemic as others a feel its OK at this time to buy a new car.

Article:

The pandemic has put the bank's 2 percent inflation goal further out of reach, raising the likelihood that its ultraloose monetary policy will continue for an extended period.

Kuroda said the consumer price index will likely fall "for the time being," due to the impact of the pandemic, falling crude oil prices and the government's "Go To" subsidy program to spur domestic travel demand.

The Sakura report, named after its cherry blossom-colored cover, is released every three months following a meeting of regional branch managers. The BOJ is scheduled to hold a two-day policy-setting meeting next week.

Ideas:

The BOJ 2 percent inflation goal, at this time, should not be a priority. If the BOJ is waiting on consumer spending to get back to normal it could take while, as consumer maybe are worried about jobs and future incomes, and as such are not going to be spending at their full potential for a while.

Yes, the consumer price index most likely is not going to increase in the near future and may even continue to fall and or remain where it is.

Consumers most likely now and in the near future may feel, its not the time to spend too much. Just what is needed for their daily needs and or just to replace what they really need.

But they might of course be enticed into a sale here or there or venture online to get something here or there, but not really indulge in more than this or that from time to time.

Have a nice day and be safe!

Japan Business Sentiment:

 https://mainichi.jp/english/articles/20210112/p2g/00m/0bu/092000c

Article:

TOKYO (Kyodo) -- Business sentiment among workers with jobs sensitive to economic trends in Japan posted the largest drop in nine months in December, as a resurgence in novel coronavirus infections hit consumption during the year-end holiday season, government data showed Tuesday.

The diffusion index of confidence in current conditions compared with three months earlier among "economy watchers" such as taxi drivers and restaurant staff fell 10.1 points from November to 35.5, down for the second straight month following an 8.9 point drop in the previous month, according to the Cabinet Office.

The latest monthly decline was the sharpest since a 13.2 percent fall was logged in March last year when the virus began to spread rapidly, clouding the economic outlook.

Ideas:

Economy watchers, those who are mostly in service related type jobs feel the direct affect of the virus and also any government suggested lockdown as customers/consumers are reluctant to resume normal economic activities during the pandemic,

So its no surprise that those with service and customer service type jobs are not feeling too good right now.

Three months ago, the virus situation might seen some signs of improvement but since then the situation has not improved and also gotten somewhat worse.

People are looking for rays of hope, so maybe three months ago, they were trying to find any sign to be positive.

Article:

A reading above 50 indicates that more respondents reported improving conditions than worsening ones.

"Amid the virus spread, people refrained from holding year-end parties and were asked (by the government) to spend the holiday season 'quietly,' which we believe affected the sentiment in the service industry," a government official told reporters.

The official said business sentiment also worsened after the government decided to suspend its "Go To Travel" subsidy program from Dec. 28 in an effort to prevent the spread of the virus during the New Year holidays. The campaign was launched last July to boost the virus-hit domestic tourism sector.

Ideas:

The holiday season is most likely a period where many businesses, for the year, move into the red, or become more profitable compared to the rest of the year.

Not just service type businesses like hotels and restaurants but also retail and department stores.

A good example of course is what is called "Black Friday" in the US.  The term "Black Friday" indicates the last weekend in November where department stores and such have big sales and it revenue from the sales moves the stores from the red to the black, meaning from  in the negative to the positive in terms of profits.

But now days, of course, is online shopping that might help some businesses but not all.

So the same idea in Japan. The holiday season for restaurants, hotels, and restaurants in Japan is/was a very profitable season compared to the rest of the year.

But of course now because of the virus situation customers/consumers are scaling back their outside activities.

Article:

The Cabinet Office downgraded its assessment for the second month in a row, saying, "Weakness has been seen in the economy recently." In November, it said the economy has shown some weakness in its recovery as the impact of the pandemic remains severe.

The diffusion index gauging business sentiment for the coming months edged up 0.6 point to 37.1, following a decrease of 12.6 points in November.

Record daily numbers of new cases prompted Prime Minister Yoshihide Suga on Thursday to declare a second state of emergency covering the Tokyo metropolitan area effective the following day to Feb. 7, increasing economic uncertainty.

Ideas:

An economy is a very complex organism, an as such there are always some positives and some negatives. 

But of course the pandemic as cause more negatives than positives. There might actually be some industries/sectors or even some businesses that are actually either still doing well and or because of the pandemic are doing better.

But this is not the time to celebrate those that are doing better because of the pandemic but to try and understand there are a lot of businesses and workers not doing so good now.

That doesn't mean all 120+ million citizens and workers are not doing good but there is a sizeable number that are, and as such, the government should always find ways, whatever possible to help those in need.

Ad 37.1 index reading clearly shows there is a large portion of workers that are not too happy about their future.

Article:

The previous state of emergency was declared in early April, when the economy watchers index plunged to 7.9, the lowest reading since comparable data became available in January 2002. It dealt a heavy blow to the Japanese economy until it was fully lifted in late May.

In the reporting month, an upscale-restaurant worker in the Tokai central Japan region was quoted as saying that demand for year-end parties "disappeared" due to a resurgence of virus infections since late November, and people became less willing to dine out with others.

The Cabinet Office polled 2,050 workers from Dec. 25 to 31, of whom 1,794, or 87.5 percent, responded.

Ideas:

Whether the index is 7.9 or 37.1 again clearly shows how unhappy workers in the customer service and services industries feel about the economy and their future.

If at all possible the government needs to provide monthly subsidies to workers in these vulnerable industries. 

And the subsidies need to be big enough that it will have an affect on the largest number of workers as possible so that enough of them feel good about their future and might even begin to not only save some of the subsidy but actually use spend some of it.

The subsidies should last at least three months past the end of the pandemic, and that might actually begin to get the economy somewhat back to pre-pandemic levels.

But it there are no monthly subsidies the service and customer service type workers may feel they have not future, but with the monthly subsidies they might have more confidence that they can survive the pandemic.

Have a nice day and be safe!

Japan Current Account Surplus:

 https://mainichi.jp/english/articles/20210112/p2g/00m/0bu/047000c

Article:

TOKYO (Kyodo) -- Japan's current account surplus for November rose 29.0 percent from a year earlier, up for the third straight month, on a sharp decline in imports with continued falls in energy resource prices, government data showed Tuesday.

The current account balance, one of the widest gauges of international trade, registered a surplus of 1.88 trillion yen ($18 billion), staying in the black for the 77th consecutive month, the Finance Ministry said in a preliminary report.

In the reporting month, the country's goods trade balance came to a surplus of 616.1 billion yen, up from a 20.0 billion yen deficit in the previous year, logging black ink for the fifth consecutive month.

Ideas:

An account surplus is when exports are greater than imports. Another way to say it is trade surplus.

When a country has a trade surplus it means more money is coming into the country that is going out of the country, as for imports, whomever, has to pay for products coming into the country and for those products going out of the country, someone somewhere has to pay to Japanese companies for those products.

The US for example is not a trade surplus economy because the size of the economy, as many foreign and international companies want to sell their products in the US market. 

As such the US never has a trade surplus but always a trade deficit.

Japan, like any country, especially those heavily involved in international trade and exporting always want to see a trade surplus. 

The fact that Japan has had a trade surplus for 77 months is a good for the Japanese economy and Japanese exporters.

Article:

Imports decreased 13.6 percent to 5.42 trillion yen due to falling prices of crude oil and liquefied natural gas, while exports slid 3.4 percent to 6.04 trillion yen as demand for mineral fuels and steel was dampened.

November saw a bigger growth of the current account surplus than the 15.7 percent increase in October and 3.6 percent climb in September, as economic activity resumed after the government in late May completely lifted its first state of emergency over the virus, declared in early April.

The figure had posted year-on-year decreases for six months in a row until August, including an 89.6 percent plunge in June.

Ideas:

Oil prices contributed to the fall in imports as prices play a role in trade. But maybe the idea of volume should also be considered, which I'm sure it is in another government measurement.

While prices might have limited one measurement it would be interesting if there was a fall into the total volume of imports, or the actual total volume of imports, or even exports and decreased but what was the actual volume.

The fact that there were six months of decreases it apparently wasn't enough to stop the 77 month streak of trade surpluses, indicating that Japan is an export focused country, despite having a large domestic market too.

Article:

Among other key components, the services trade balance in November marked a deficit of 181.6 billion yen compared with a surplus of 176.9 billion yen a year before, largely affected by the continued drop in the travel balance surplus as strict travel restrictions to curb the virus spread remained across the world.

The travel balance reflects the amount of money foreign visitors spend in Japan versus Japanese spending abroad. It saw a 27.6 billion yen surplus in November, down 87.9 percent from 228.0 billion yen a year earlier.

Ideas:

No the travel restrictions have reduced foreign travel into Japan, an as such money flowing into Japan. 

Its unimaginable just how much has been lost due to the fact that 1 million Chinese travelers were unable to go to Japan and spend all the money they spend in Tokyo and other places.

And all the businesses that were created just to cater to all the Chinese tourists and now, even if they survive. how long before the tourism industry gets back to normal in Japan.

Not including all of big departments stores, duty free stores and shops in the Ginza area of Tokyo that, came to depend on the Chinese tourists.

It only logical, with that much money flowing through Tokyo, that department stores and other businesses came to depend heavily on the tourism business from China.

And there no way, while still the third largest economy in the world and with a large domestic economy, that domestic spending can ever overcome the loss in the amount of spending by Chinese tourists in Tokyo and other areas.

Article:

Primary income, reflecting the net flow of profits, interest and dividends from investments in other countries, marked a surplus of 1.72 trillion yen, up 17.8 percent, helped by an increase in bond interest received by investors in Japan.

In November, Japan saw the start of a third wave of virus infections with daily numbers of cases continuing to rewrite record levels.

Prime Minister Yoshihide Suga on Thursday declared another state of emergency in the Tokyo metropolitan area effective from the following day to Feb. 7, raising uncertainty over the economic outlook.

Ideas:

There is no way any country can make up for the losses due to the pandemic. The best that can happen is that domestic spending an such, might pick up some, but it will never be enough to offset what has been lost.

The global economy has become too integrated, but the losses globally from the pandemic, most likely can't be made up.

Article:

The declaration requests residents to stay home and service providers such as restaurants, department stores and entertainment facilities to shorten their operating hours.

Japan is set to expand the declaration later this week to Osaka, Kyoto and Hyogo prefectures in the western part of the country, according to government and ruling party sources.

Ideas:

While its important to focus on safety there should be a balance somehow somewhere, where businesses are able to operate as naturally as possible.

One way of course, and its happening is for restaurants to move into more takeout and delivery services to offset the losses from the early closing times.

Perhaps, for example. after 9PM restaurants remain open but just for takeout and delivery services only. That way they might be able to not lose so much from the loss of customers eating in their restaurants.

Perhaps stay open to 12 midnight with takeout and delivery services.

And the same for smaller shops and stores, instead of having to close early, have a mandatory rule, where customers are required to wear masks, and if not they are not allowed into the stores.

Even supermarkets can use that rule later at night and even offer delivery services to say midnight for late night shoppers.

And of course use apps and e-commerce as much as possible to keep their businesses going.

Have a nice day and be safe!

Japan Economy News:

 https://mainichi.jp/english/articles/20210109/p2g/00m/0bu/015000c

Article:

TOKYO (Kyodo) -- A key index reflecting the current state of the Japanese economy fell in November for the first time in six months, due to sluggish retail sales affected by a surge in coronavirus infections, government data showed Friday.

The Cabinet Office's preliminary data for the coincident index of business conditions in the reporting month edged down 0.3 point from the previous month to 89.1 against the 2015 base of 100. It followed a 4.6 point rise marked in October.

But the office maintained its assessment that the Japanese economy is "bottoming out" after upgrading it in August from "worsening," the most pessimistic of its five evaluation levels.

Ideas:

A rise in October of course meant there was a little more people who were positive than negative.

But at the same time an index measurement of 89.1 from 89.4 is not much of a difference, which means there are those are more pessimistic than there are positive.

But what really does the index measure? Can it really read the minds of consumers as to what they want and or are going to do?

Indexes are important for understand general trends but can they really figure out the thinking of consumers or people?

Article:

A third wave of infections, by far the largest yet, has been observed across Japan, forcing Prime Minister Yoshihide Suga to declare another state of emergency on Thursday.

"The number of virus infection cases began to increase in November, and we believe that it more or less affected the index," a government official told reporters.

The official added warmer-than-usual temperatures in the reporting month also cut demand for winter clothes.

Ideas:

Yes, no doubt, it might have affected the index, and yes it can be a very good indicator of future trends and or what happened in the past.

But businesses and such should still use their data and intuitive sense to see what is happening.

Kenichi Ohmae, in the long time best seller, "The Mind of the Strategist" mentions that intuitive thinking in strategic thinking/planning was a lost art, that some businesses don't use today. Of course that was 30+ years ago.

I think its still relevant today. If we become too dependent on statistics only the decide what do to. Instead of using our business instincts we become too accustomed to all the statistics that come as a way decide new strategies to move forward

Of course all a business has to do is see in their stores, restaurants etc. that there are less customers and less sales.

while indexes and statistics are very good, there is still the need for basic intuition for a company, a business person, etc. 

Of course the best way is to use both tools. Use the statistics and see what they say then use your intuition to figure out what is really happening and use your intuition to figure out what really is the best strategy to move forward.

Article:

The reading had significantly recovered after posting 71.7 in May amid the government's first state of emergency declaration over the pandemic. But it has been still at a low level if compared to the 94.5 marked in February, when the virus began to spread across the country.

The figure for May was the worst since 71.1 logged in April 2009 in the aftermath of the global financial crisis. Japan completely lifted the declaration late that month, after declaring in early April.

The leading index of business conditions, forecasting the situation in the coming months, rose 2.3 points to 96.6 in the reporting month, up for the sixth straight month.

Ideas:

Again indexes are a good way to see what happened, is happening, and to see what might happen in the future

But indexes, just like other statistics, should not be the only way to think about what have happened and or what might happen.

Indexes, in this situation, try to measure, correctly, what people think or feel. While it is a fair estimate, you are dealing with people and people, for the most part of sometimes unpredictable and or can change their minds very quickly, and the same with businesses.

So all indexes, while they try to explain what might have happened, need to be seen as just a number, but use your tuition to help figure out what is really happening.

Reference: 

Ohmae, Kenichi. 1982. The Mind of the Strategist. New York: McGraw-Hill, Inc.

Have a nice day and be safe!

Japan Household Spending:

 https://mainichi.jp/english/articles/20210108/p2g/00m/0bu/040000c

Article:

TOKYO (Kyodo) -- Japan's household spending rose a real 1.1 percent in November from a year earlier, with a rebound from the previous year's drop due to a tax hike outweighing a decrease amid a resurgence of coronavirus infections, government data showed Friday.

Average spending by households with two or more people in real terms was 278,718 yen ($2,700), up for the second straight month, according to the Ministry of Internal Affairs and Communications. It increased 1.9 percent in October.

The figure had fallen for 12 straight months through September mainly due to a consumption tax hike from 8 percent to 10 percent implemented on Oct. 1, 2019, as well as the impact of the pandemic since last spring.

Ideas:

Its not surprising that consumer/household spending rose in November, as in November 2019 consumers were still thinking about or worried about the consumption tax hike from 8 percent to 10 percent.

The 8 percent to 10 percent was probably not that big a deal for many products but the media has made such a big deal of it that consumers were either confused and or worried about just a 2 percent increase.

And yes, there are some or many with lower incomes or even middle incomes that even a 2 percent increase might have caused concern or worry, especially with big ticket or even medium ticket items.

I was in Japan, Yokohama in the September of 2019, during the Rugby world cup, not there for that but for other reasons, and at Yokohama station and places, its seemed like everyone was in a spending frenzy with all of the stores sales etc. before the tax came into affect.

Article:

Meanwhile, seasonally adjusted spending in November fell 1.8 percent from the previous month for the first decline in four months. The month saw the start of a third wave of virus infections with daily numbers of cases continuing to rewrite record levels.

"Consumption of some items increased in reaction to (falls in the previous year triggered by the tax hike), but at the same time, declines in spending on components such as eating out widened as virus infections spread," a ministry official told reporters.

The virus resurgence has gathered strength, forcing Prime Minister Yoshihide Suga to declare another state of emergency in the Tokyo metropolitan area on Thursday.

Ideas:

So in November you had  different forces in play; You had consumers by now accepting the 2 percent tax increase and compared to November 2019 were beginning to spend again.

You had consumers, who might have not spent as much in the Spring but were no beginning to spend a little more.

And then you had the possible third wave of the pandemic which might have caused some consumers to not spend as much.

So which factor had the most affect? Obviously the pandemic factor most likely has had the greatest affect as consumer spending has reduced consumer spending.

Before the third wave, as usual, consumers maybe can only wait so long before they want to get out and about and visit stores, restaurants, and other places.

And or they want to spend online etc. instead of going out.

Article:

Effective through Feb. 7, the emergency entails requests for residents to stay home, and for service providers such as restaurants, bars, department stores and entertainment facilities to shorten their operating hours.

"It is inevitable that some negative effects will occur," the official said.

By category, the official said so-called nest-dweller consumption grew in November, as utility costs and outlays for furniture and household utensils soared 10.6 percent and 10.8 percent, respectively. Expenditures on foodstuffs such as meat and vegetables for cooking at home were also up 1.7 percent.

Spending on drinking dived 57.4 percent, a sharper decline than the 36.3 percent drop in October.

Ideas:

Yes, unfortunately, there will/has been some negatives related to the new emergency measure and or the old/new emergency measures.

And it inevitable that some product sales grew such as those needed for the home and or products that needed to be replaced etc.

Foodstuffs no doubt would have risen during the same time.

However, this is the perfect time for restaurants and other places to innovate and provide either takeout services and or delivery services and maybe some consumers would be more than willing to get takeout and or get a delivery from restaurants if the services were available.

Spending on drinking no doubt decreased as workers/employees were not working their offices but working from home, and as such didn't meet other workers for drinks when their long workday ended.

Article:

Outlays for domestic and overseas package tours plunged 55.1 percent, compared to the previous month's 27.0 percent fall, despite the state-subsidized "Go To Travel" campaign launched last July to boost the virus-hit domestic tourism sector.

The average monthly income of salaried households with at least two people rose a real 0.6 percent to 473,294 yen, up for the 11th month in a row.

Japan's first virus emergency was declared in Tokyo and six prefectures in early April last year and was expanded nationwide later that month. The measure dealt a major blow to the world's third-largest economy until it was completely lifted in late May.

Spending sank 16.2 percent in May last year, the sharpest decline since comparable data became available in January 2001, and 11.1 percent in April 2020.

Household spending is a key gauge of private consumption and accounts for over half of Japan's gross domestic product.

Ideas:

The travel industry and all those related businesses and industries were most likely the hardest hit areas in Japan related to the virus situation.

When foreign tourism drops over 90 percent it has to a major problem for many businesses and industries related to the tourism industry,.

The Japanese government should step in and help as many of these businesses as possible.

And of course all of those businesses who focus on domestic tourists, the government should also step to help them survive during the pandemic.

This is not the time for the phrase "Let the Market Decide" who should survive and who should not.

Japan Consumer Confidence:

 https://mainichi.jp/english/articles/20210106/p2g/00m/0bu/105000c

Article:

TOKYO (Kyodo) -- Japan's consumer confidence in December saw the first decline in four months, dented by the resurgence of novel coronavirus infections across the country, government data showed Wednesday.

The seasonally adjusted index of sentiment among households made up of two or more people fell to 31.8 from 33.7 in November, according to the Cabinet Office.

The index gives an indication of consumers' economic expectations for the coming six months, with a reading below 50 suggesting pessimists outnumber optimists.

Ideas:

While the index is a good indicator of consumer confidence, it is never 100% perfect in predicting what consumers might do.

The reason is because consumes are people, and sometime consumers/people are not 100% predictable what they might do.

One week they might not want to spend and the next week they completely change their mind on what they want to do.

Yes the Index maybe is the best predictor but its still about human behavior which can always change.

But with that said, a reading of 31.7 is not exactly positive in that more consumers feel not so positive about the next six months

Article:

The result of the survey, conducted between Dec. 8 and 21, came as Prime Minister Yoshihide Suga is considering declaring another state of emergency on Thursday, as the country has faced a third wave of virus infections with record daily numbers of cases.

The first state of emergency was declared in April last year, which hit the world's third-largest economy hard.

The virus resurgence, which has become obvious since November, also forced Suga to suspend the government-subsidized "Go To Travel" domestic tourism promotion campaign nationwide since the year-end holidays.

Ideas:

Its important to understand just how much businesses, society, consumers etc. are affected by the media and such related to positive news and or negative news.

If the media is always talking about negative things, then naturally society and such is going to most likely feel negative about what is happening

But the opposite can be true too. If the media is providing some kind positive news or positive outlooks about the future then society might have a different point of view and maybe more positive outlook which could contribute to a more positive consumer confidence index.

That doesn't mean the media should not report the negative or the the government should not explain what is going on, but it just shows how much influence on society positive and negative news or information has.

Article:

"We believe that the recent spread of virus infections and events like suspension of the 'Go To' campaign have increased uncertainty over the outlook," a government official told reporters.

The official said that the expected emergency declaration could be a "negative contributor" to the sentiment. "On the other hand, if the number of new cases decreases through measures under the emergency, it would bring (sentiment) back on the recovery track," he added.

The office downgraded its basic assessment on consumer sentiment for the first time in four months as well, saying that consumer sentiment was "stalling." It said in the previous month that sentiment had "remained in a severe situation, but shown signs of recovery recently."

Ideas:

Exactly, negative information more than likely might influence the consumer confidence index while the reduction in virus cases in the news might influence the consumer confidence index i a positive way.

But its very important that the information is correct and factual and not fake or made up, either way, to unduly influence society.

So, in periods of not so good information or news, what can the government do try and minimize the negative aspects of the consumer confidence index? Obviously the government needs to truthful with what is going on but at the same time, find ways to boost confidence the best it and or at least keep consumer confidence from getting worse.

That might be the most logical solution. Don't try to completely boost confidence when there is not so good news everyday but find ways to help society and consumers in general to see "light at the end of the tunnel" so to speak.

Of course the best way is to provide more subsidies for families and workers, or even monthly subsidies as a way to keep society feeling like they are going "survive" the pandemic.

Article:

The index had improved from a record-low 21.6 logged in April, in the wake of the government's first state of emergency declaration over the virus in Tokyo and six other prefectures early in the month, which was expanded to other parts of Japan later in the month. Nonbinding requests for people to stay at home hit personal spending until they were completely lifted in late May.

All of the survey's four components worsened in the reporting month, with consumers' assessment of employment conditions showing the largest drop among them, falling 2.9 points to 23.6.

Willingness to buy durable goods dropped 1.9 points to 33.8 and the assessment of livelihoods was down 1.8 points to 34.9. That of income growth dipped 0.7 point to 35.0.

The survey covered 8,400 households, including 2,688 single-member households, with valid responses received from 7,415, or 88.3 percent.

Ideas:

The record low of 21.6 of course was maybe because the virus situation was a major shock to Japan and of course the world and everyone was trying to figure out what is going on.

To all of a sudden have your life, work life, income, etc. affected was a major shock to many people.

And as such consumers/people decided to cut back on spending as they were not sure of what was happening and not sure of their work future.

From the beginning I felt the way the Japanese government handled the virus situation back in April was the best choice as a way to balance reducing the virus situation and also protecting the economy, businesses, and jobs at the same time.

There might not have been a best practice way to do what was needed to be done at the time as even in the EU, where there were complete lockdowns, that didn't work perfectly either.

So maybe there was no perfect way to handle the situation.

Have a nice day and be safe!

Japan Auto Sales:

 https://mainichi.jp/english/articles/20210106/p2g/00m/0bu/024000c

Article:

TOKYO (Kyodo) -- New car sales in Japan slumped 11.5 percent in 2020 from a year earlier amid the coronavirus pandemic, marking the largest fall in nine years, data from industry bodies showed Tuesday.

Automakers sold 4,598,615 cars last year, including minivehicles with engines of up to 660 cc, according to the Japan Automobile Dealers Association and the Japan Mini Vehicles Association.

The 11.5 percent decline was the biggest since 2011, when auto sales tumbled 15.1 percent to about 4,210,000 vehicles, in the aftermath of the massive earthquake and tsunami that ravaged northeastern Japan and disrupted supply chains.

Ideas:

Buying  a car, for the most part, is a major purchase for most consumers. And as such, for many it might cause a major concern for their budget.

If you add in the uncertainty about jobs, future income, or extra income, then the stress about buying a car becomes larger.

So the idea that car sales were down because of the pandemic was no surprise, as many consumers may have decided to wait or postpone buying a new car.

Not to minimize the loss in car sales, but maybe its better than nothing as it could have been worse, as we have seen in many sectors and industries such as the services industry including hotels, travel agencies, the airline industry just to name a few.

Article:

The auto industry has seen a pickup in sales following a slump in the spring of 2020, when Japan was placed under a state of emergency over the novel coronavirus.

Excluding mini-vehicles, car sales fell 12.3 percent to 2,880,527 units. A total of 1,718,088 minicars were sold, down 10.1 percent, the data showed.

Car demand usually grows toward April, the start of a new business and school year in the country. Uncertainty remains over the outlook for 2021 as the government, struggling to cope with resurgent coronavirus infections, is moving toward declaring another state of emergency.

Ideas:

The surge in sales in min-vehicles is also no surprise as maybe there are cheaper, more fuel efficient and or more practical. So whatever it is consumers find them more attractive to buy during the pandemic situation.

So we will see as we get closer to April 2021 if car sales begin to increase.

At some point, consumers might get tired of waiting and just decide to buy a new car, if they are able to do.

But if there is a continued surge in the virus situation and the government can't get the vaccine program off the ground then car sales most likely will remain sluggish and not at their potential.

Article:

Toyota Motor Corp. saw a 5.8 percent drop in domestic sales in 2020 from a year earlier, while its competitors suffered double-digit declines.

Mitsubishi Motors Corp. registered a 41.3 percent slump and Nissan Motor Co., in the midst of restructuring since the departure of former Chairman Carlos Ghosn, saw a 27.5 percent fall.

The other automakers include Honda Motor Co. and Mazda Motor Corp., along with minicar-making Suzuki Motor Corp. and Daihatsu Motor Co., a Toyota subsidiary.

Ideas:

Sometimes consumers are brand conscious and sometimes they are just looking for the best deal, the most savings, or the most practical car they can find.

But sometimes they are very conservative in their buying. In this case, maybe or maybe not they are being conservative and choosing a brand they feel comfortable with despite maybe better options related to other variables.

And or Toyota, because of their resources and market power, are/were able to give better deals during the pandemic, and maybe even some deals below cost as a way to move their inventory, even though in the short term they might have lost some profits.