Japan Household Spending:

 https://mainichi.jp/english/articles/20210706/p2g/00m/0bu/033000c

Article:

TOKYO (Kyodo) -- Japan's household spending in May jumped 11.6 percent from a year earlier, following a sharp increase the previous month, as it continued to rebound from a slump last year caused by the coronavirus pandemic, government data showed Tuesday.

Average spending by households with two or more people in real terms stood at 281,063 yen ($2,500), the Ministry of Internal Affairs and Communications said. The year-on-year gain was the second-largest since comparable data became available in January 2001, following a 13.0 percent spike in April.

Spending expanded for the third month in a row, starting with a 6.2 percent rise in March.

Ideas:

it is estimated that consumer spending is 50 percent of Japan's GDP or gross domestic product. As such its a very important part of the economy.

In most advanced economies consume spending it the largest part of GPD, and as such the services sector could be considered very important in Japan.

But the Bank of Japan is always concerned that consumer spending is not at its potential or not what spending should be in Japan.

But of that might be the fact that Japan has an ageing population and or the population is ageing at a faster rate than births as Japan also has a low birth rate.

But some other reports have shown that the age group between the ages of 20 and 65 in Japan, spend as much or more than the same age groups in other advanced countries. 

The problem is those in the 65+ age groups are becoming larger and larger every year and those age groups tend to spend less than the younger age groups.

Consumer spending might be increasing but its not where it should be.

Article:

In May 2020, household spending plunged a record 16.2 percent due to the government's first state of emergency over the pandemic, declared the previous month for Tokyo and six other prefectures and later expanded nationwide.

Requesting people to stay at home and nonessential businesses to suspend operations, the measure dealt a heavy blow to consumption until it was fully lifted in late May last year.

On a seasonally-adjusted month-to-month basis, however, spending in the reporting month fell 2.1 percent from April for the first decline in four months.

Ideas:

Because the virus situation is not going away but is actually getting worse the potential for consumer spending to increase or get back to the pre-pandemic levels might not happen anytime soon.

However, consumers might be thinking several things; they are tired of the pandemic and have pandemic fatigue and will eventually decide to just get out and spend. Or they feel the vaccinations are increasing and the feel safer to get out and spend. And they've waited long enough and they just to be out and about.

The only problem is the virus situation has exploded again so consumer will need to re-think their plans to get out and about.

And of course now is the Obon season, which usually means vacations and travel. So time will tell as to what people are going to do this Obon season.

Article:

A ministry official told reporters the nation's third virus emergency, effective from late April through mid-June for Tokyo, is believed to have weighed on private consumption.

In addition, when compared with a pre-pandemic level of May 2019, the latest average spending figure dropped a real 6.5 percent, the official said, expressing the view that the pandemic continues to affect consumption.

By component, outlays on transportation and communication surged 23.5 percent from a year ago, the biggest contributor to the overall outcome, supported by brisk purchases of cars and mobile phones. Spending on culture and recreation soared 24.0 percent as more people took trips and went to entertainment facilities than last year.

Ideas:

Its important to remember that Japan is the 3rd largest economy in the world. Yes a decrease of 6.5 percent in consumer spending is not good, but that 6.5 percent is not a complete drop in consumer spending. So there was still a lot of consumer spending. 

Was the purchase of cars a delayed purchase because of the pandemic in the spring of 2020 or was it Japanese consumers just felt it was time to buy a new car. And the same with mobile phones. Were delayed purchases or consumer just deciding its the right time to buy.

The spending on entertainment and trips, for the most part, can only be put off so long, all things being equal, meaning if consumers have a chance they will travel, even if it only domestically.

Article:

Expenditure on housing rose 28.9 percent and that on clothing and shoes increased 13.0 percent, also in reaction to the previous year's plummets.

Meanwhile, utility costs dipped 2.4 percent due to the previous year's high temperatures that increased power demand, the official said. Spending on furniture and household items, which include sanitizers and wet wipes, shrank 2.6 percent.

The average monthly income of salaried households with at least two people in May was down a real 2.6 percent from a year ago to 489,019 yen, as last year's income was boosted by 100,000 yen per person cash handouts by the government to help households cope with the pandemic. It followed a 2.8 percent rise the previous month.

Household spending is a key indicator of private consumption, which accounts for more than half of Japan's gross domestic product.

Ideas:

Maybe again housing purchases or spending on housing might be a delayed purchase or consumer just thinking its now the right time to buy.

But clothing and shoes might be a little different. As consumers are spending more and more online, maybe they feel don't want to buy some clothes and shoes online and they need or want to see the products in person before they buy.

As such as they now feel more comfortable going back to the brick and mortar stores purchases or those products increased. 

Its not surprising that household salaries might have been down slightly, as many companies were reluctant to give any kind of golden week bonus if that is calculated in the salaries.

And maybe this year the Japanese government didn't give households a 100.000 yen per person cash handout.

So a key question is what about the households that are part of the services sector. How are they able to survive if the business they are involved in is not doing so good still.

Consumer spending is a large part of the Japanese economy. But if many households are part of the services sector, and if they are related to a business that is not doing too good in the services sector, then they might be reluctant to spend or they might delay their spending and or only spend on the very basic needed to survive.

So the Japanese government maybe needs to find ways to help the businesses and the families in the services sector, such as restaurants, hotels. etc. because if they don't then consumer spending in the economy is going to remain low or very stagnant and will not reach the level needed for the economy to grow.

But of course there might still be subsidies given to restaurants or other places, but because the pandemic has been going on for so long is it enough after 18 months.

Have a nice day and be safe!

Bank of Japan Estimates:

 https://mainichi.jp/english/articles/20210705/p2g/00m/0bu/045000c

Article:

TOKYO (Kyodo) -- The Bank of Japan on Monday downgraded its economic assessments of two of the country's nine regions -- Chugoku and Shikoku -- as the pace of recovery from the coronavirus pandemic is slowing.

In its quarterly Sakura report for July, the BOJ raised its outlooks for two regions while maintaining its assessments of the remaining five, underscoring the uneven nature of economic recovery.

The Japanese central bank said the economy remains in a "severe situation" due to the impact of the pandemic but many reported that the economy has "picked up as a trend" or "started to pick up."

Ideas:

No economy grows at a linear rate, or equally, and certainly different areas of an economy don't rate at the same rate. 

As an economy is very complex, with many different sectors and many different types of businesses, an economy never see the exact growth in all sectors, all  areas, or all business.

And now you add in the pandemic situation and it creates even more imbalances in the economy.

Some areas might be some economic growth and some might see decreasing economic growth.

Before the latest pandemic surge there might have been some areas that were beginning to pick up, but now that the pandemic as exploded again, its not going to be easy for any area to see significant economic growth.

Article:

The two regions that saw upgrades were Kinki, which includes the western prefecture of Osaka, and Hokuriku in central Japan. The Kanto-Koshinetsu region centering on Tokyo was among the five regions for which assessments were maintained.

"For the time being, economic activity is expected to stay at lower levels than before the coronavirus pandemic," Governor Haruhiko Kuroda told a videoconference of BOJ branch managers before the release of the report.

Japan is battling to rein in rising coronavirus cases in urban areas amid worries about a further spread of the Delta variant, less than three weeks before the opening of the Tokyo Olympics.

Ideas:

The new virus strains will keep economic growth down for the time being. Most likely real economic growth might not be seen until the 3rd or 4th quarter as it seems the current virus situation is now even worse than the original situation last spring.

The problem is that people either are complacent now, have been vaccinated, and or are have pandemic fatigue meaning they are tired of waiting and or tired of not being able to do what they did before the pandemic.

But as I check some YouTube videos related to the Tokyo entertainment areas, is seem like normal as many people are out and about and even some not wearing masks.

This writing is actually during the Olympics and the virus situation is even worse now.

Article:

Economists and BOJ policymakers expect further progress in vaccinations in Japan will lead to more economic activity, helping the services sector that has lagged behind manufacturers in the pace of recovery.

The BOJ report said downward pressure on consumption of services remained in areas under a COVID-19 quasi-state of emergency such as Kanto-Koshinetsu, Tokai and Kinki.

Manufacturers such as automakers have seen a recovery from the pandemic much sooner than service providers, buoyed by strong demand in the United States and China.

Ideas:

Yes, the progress in vaccines should be good for increased economic activity, as some consumers will feel more confident getting out and doing things.

And yes, it should help the services sector some, but it is going to take some time before the services sector fully recovers.

But again, as of this writing, which several weeks after the publication date of this post, the virus situation has re-emerged as a major problem, and again might be a major factors on the services sector.

Manufacturing has recovered much faster, but not the problem of course, as reported in many article is the global semiconductor chip shortage, which again has been reported that some manufacturing factories are reducing their operations because of the shortage.

Article:

Chugoku was the only region in which the pace of a pickup in production was slowing down.

"We have been adjusting production of auto parts as automakers have cut output amid the shortage of chips since May," a company in the auto sector in Chugoku was quoted as saying in the report. "The impact of the shortage will likely ease gradually from August so we plan to ramp up production to catch up from this fall."

The Sakura report, named after its cherry blossom-colored cover, will be among the materials used at the BOJ's policy-setting meeting next week.

Ideas:

The slowdown the manufacturing sector related to the chip shortage comes as the Obon season, the traditional summer vacation season, begins in Japan. So there might be some slowdowns and or delays as the summer vacation season also interacts with the chip shortage and or course the virus situation all at the same time.

The fall most likely will be time when production will be back to normal, as more companies maybe by then have solved or found ways to overcome the chip shortage, and as more people become vaccinated full operations mostly will be taking place.

But the virus situation has not slowed down but has gotten worse. But the manufacturing sector seems to be able to keep going despite the virus situation.

Have a nice day and be safe!

Japan New Car Sales:

 https://mainichi.jp/english/articles/20210702/p2g/00m/0bu/014000c

Article:

TOKYO (Kyodo) -- New car sales in Japan increased 11.6 percent in the first half of 2021 from a year earlier, but fell short of a rebound from the pre-coronavirus pandemic level in 2019 due to a global shortage of semiconductors, industry body data showed Thursday.

Automakers sold a total of 2,464,586 units including minivehicles from the January to June period, rising for the first time in two years following the steep pandemic-induced fall in 2020, according to the Japan Automobile Dealers Association and the Japan Mini Vehicles Association.

Ideas:

New cars sales, not just in Japan, but globally, had been on the increase. An 11.6 increase from a year earlier, the not so good spring 2020, seems about right.

But of course it wasn't near the 2019 level. But that could've been expected as the global shortage of semiconductors has been a major challenge globally

And to make matters worse, Taiwan, a major semiconductor manufacturer, has recently been it with the new virus variants.

Taiwan, for a long time was able to handle the virus situation much better than many other places but now the variants have not reached there.

Article:

However, compared to the same period in 2019, sales fell 10.5 percent as the supply of chips was disrupted by the pandemic. Semiconductors are used in everything from smartphones and laptops to cars.

Excluding minivehicles, powered by engines no larger than 660 cc, sales rose 8.7 percent to 1,521,878 vehicles.

Ideas:

Yes, the semiconductor situation has made things not so good for any company making cars, smartphones, and laptops.

At the same time, was any company, aware of the coming shortage, or was there any news out there among the suppliers that this situation was beginning to take place.

And if they knew or when they knew were they able to unable to do anything about the semiconductor shortage.

And did they have any back up plans or strategies just in case a situation like this was going to happen.

It seems logical, especially in Japan, that smaller engines would have the most in sales.

But consumers, being consumers, often choose want they want regardless of logic or trends.

Article:

By brand, Toyota Motor Corp. saw sales up 14.1 percent due to high demand for its Yaris Cross SUV, which rolled out in August 2020, while those of Honda Motor Co. declined 10.7 percent, partially because the automaker had to temporarily halt some of its factories as it struggled to procure enough chips.

Sales of minicars grew 16.7 percent to 942,708 vehicles.

Ideas:

But then here, we see sales of minicars did increase.

 It again seems logical that smaller cars would be the preferred model for most buyers in Japan as gas might be somewhat more expensive than other countries and or fees for parking, including fees for parking spaces near where families live.

So it seems that Honda might not have a sufficient supply of chips as it didn't know or anticipate that there would be a shortage

And or because of the pandemic the number of cars produced each month was less than normal, so its supply waiting to be sold was less than needed just in case situations such as the chip shortage caused delays in production.

Toyota on the other hand, might have just been lucky in that is made enough of the Yaris Cross SUV before the chip situation began to happen, so its sales were not as afffected.

Article:

Daihatsu Motor Co.'s TAFT Mini Crossover newly launched in June 2020 lifted the automaker's sales up 23.3 percent, while sales of Suzuki Motor Corp. rose 19.3 percent.

In June alone, new car sales increased 5.3 percent to 365,631, according to the data.

An official from the Japan Automobile Dealers Association said sales will "continue to be affected," with some automakers possibly halting factory operations this month due to the lack of semiconductors.

Ideas:

Its still interesting, that Japan has a lot of car manufacturers, eight if correct? Of course some of these might be in some kind of partnership with the larger companies such as Toyota, Honda, and Nissan. 

As Toyota, Honda, and Nissan might be providing needed resources to help the smaller companies.

Its kind of like the Japanese airline industry, or even the airline industry in the US. There is JAL and there is ANA but then there are the smaller commuter, regional, or discount airlines relate to JAL such as J Air and some related to ANA.

So the same with the car industry in Japan.

Most likely, as the pandemic, unfortunately, as regained its momentum, it could affect the chip industry during Q3 and maybe into Q4 and car manufacturers, smartphone companies, and laptops makers wait for the chips industry to recover from the pandemic and the chip shortage.

Have a nice day and be safe!

Japanese Manufacturer Sentiment:

 https://mainichi.jp/english/articles/20210701/p2g/00m/0bu/024000c

Article:

TOKYO (Kyodo) -- Sentiment among major Japanese manufacturers in June improved to its highest level since December 2018, lifted by a recovery in demand in the U.S. and other overseas economies despite a blow from a global chip crunch, the Bank of Japan said Thursday.

The key index measuring confidence among companies such as automobile and electronics makers rose to 14 from 5 in March, marking the fourth straight quarter of improvement, according to the central bank's quarterly Tankan survey.

Confidence was at its highest since it stood at 19 in the December 2018 survey. Still, it undershot the average market forecast of 17 in a Kyodo News survey.

Ideas:

Business and or manufacturer sentiment, or feelings about the Japanese economy and global economy is improving, after a not so good spring 2020. 

And yes, despite the Q2 being a few quarters past, it was so bad much of the economy is still trying find its way out of it. 

Yes, it appears to be high, with the highest since December of 2018, but it always important to remember how fast it can decrease. So in a way the index has the potential to be very volatile.

The market may have estimated a value of 17 but the index was only 14, which indicates that maybe not everyone is optimistic, as there are many areas of the Japanese and global economy that are not doing so good.

Article:

The index for large nonmanufacturers, including the coronavirus pandemic-battered service sector, rose to 1 from minus 1 in the March survey, turning positive for the first time in five quarters.

The Tankan index represents the percentage of companies reporting favorable conditions minus the percentage reporting unfavorable ones.

The survey reinforced the view that while a recovery from the coronavirus pandemic fallout is being observed, it is still uneven, with nonmanufacturers lagging behind manufacturers.

Ideas:

The large nonmanufacturer index increase from minus 1 to 1 is really not that big of a jump and the service industry has been hit the hardest during the pandemic. But a positive is positive no matter how small it is.

The recovery will continue to be uneven for a very long time, as of this posting, the virus situation is spiraling out of control again, which means consumer spending might be less than expected or less than needed for a full or even partial recovery in the services sector.

The manufacturing industry appears to be headed in the right direction, minus the semiconductor chip challenges while the services sector has a long way to go to even begin to feel any kind of recovery.

Article:

"The chip shortage hurt confidence among automakers but it is expected to improve going forward, so the recovery trend in the manufacturing sector remains unchanged," said Yoshimasa Maruyama, chief economist at SMBC Nikko Securities Inc.

Automakers, the backbone of Japan's export-driven economy, have benefited from a pickup in demand in key U.S. and Chinese markets, helping boost confidence in the overall manufacturing sector.

Automakers' sentiment was positive at 3, though down 7 points from the previous survey, weighed on by a global shortage of semiconductors that has forced some automakers to curb production.

Ideas:

The chip shortage doesn't appear to be a serious a challenge as expected, even though there have been shutdowns related to the shortage. If the automakers sentiment, feeling, is still in the positive range it means they might not feel its really that bad or is not going to delay production or shipping too much.

But it must be understood that while manufacturing and car exports are an important part of the Japanese economy even saying export-driven economy, its not the entire economy as the Japanese economy is very complex.

It might be correct to say these days in the 21st century that manufacturing drives the economy. Yes it is an important part of the economy, but its not everything. 

The Japanese economy has grown into a diverse complex economy that actually now is a services oriented economy as are all advanced economies.

Article:

Such tight chip supply conditions have instead raised demand for equipment to make semiconductors, improving sentiment among production machinery makers, the BOJ data showed.

In the United States and some European countries where economic activity has been gaining momentum with the rollout of vaccines, inflation worries have grown.

Economists say such concerns have not materialized in Japan as inflation remains stubbornly low. But some in sectors such as food and beverage as well as metals voiced concern that rising materials costs would hurt profitability, a BOJ official said.

Ideas:

Whenever there is a challenge in one area, such as a chip shortage, it can be an incentive for new innovation such as new ways to produce chips.

And for example as restaurants were required to close early and as customers decided to stay home, many service sectors or companies were created to meet the new demand for home delivery by Uber Eats type companies or other companies, and even 7/11 started delivery services to meet the demands of consumers.

Inflation, if its related to consumer demand will continue to remain low in the short term and possibly long term, as the pandemic again as picked up steam.

As far as food sector is concerned that might be a different story and increasing material costs food companies eventually might have to "pass on" the rising costs to the next group in the logistics chain, whomever they might be, such wholesalers, restaurants, supermarkets, retail customers and so on.

Article:

With the impact of the COVID-19 crisis persisting, the speed at which people in Japan get vaccinated is expected to determine the pace of a recovery in the services sector.

Japan is accelerating its vaccination drive, providing shots in workplaces and universities in addition to local municipalities with about three weeks to go until the Tokyo Olympics starting on July 23.

Confidence among operators of hotels and restaurants remained deep in the negative, at minus 74, though it is expected to improve to minus 47 in the coming months.

Ideas:

Yes, the speed of people getting vaccinated is going to help the services sector. However, no one could see or have thought that the new virus situation was going to be this bad, and most likely will slow down the recovery of the services sector.

Confidence among hotel operators is going to remain negative for a long time. When the hotels lose the majority of its domestic visitors and then add in the million plus Chinese tourists, maybe for a monthly total, the hotels are not going to come back quickly.

Restaurants are in a similar situation. They most likely are not in as bad a situation as the hotels but for some, when the majority of you business is at night and or even late night and you add in the profits they get from the sale of alcohol, they most likely are not going to come back very quickly, if at all, as long as the virus situation continues to spiral out of control.

Article:

"The gap between manufacturers and nonmanufacturers (in recovery) will become narrower as vaccinations progress," Maruyama said.

Major cities such as Tokyo and Osaka emerged from the country's third state of emergency in late June, shifting to less severe anti-virus measures. But a recent rebound in coronavirus cases casts a pall over the outlook.

Large companies, defined as those with 1 billion yen ($9 million) or more in capital, expect a 9.6 percent increase in capital spending for fiscal 2021 from April.

Ideas:

Yes the gap will become narrower, but its now going to take much longer than expected as the virus situation is now out of control again, meaning many of the services sector businesses are not going to see much of a recovery just yet.

Capital spending may increase for the large companies, as some of the large companies might not be too affected by the virus situation.

At the same time, if companies expect a significant recovery in the near future or enough of a recovery in the near future, they might think now is the best time to capital spending to prepare for when the Japanese economy gets moving again.

Article:

Looking ahead, the index for manufacturers is projected to worsen slightly from 14 in the latest survey to 13 and that for nonmanufacturers to rise from 1 to 3.

Companies expect the U.S. dollar to trade at 106.71 yen in fiscal 2021, up from 106.07 yen in the March survey.

The BOJ surveyed 9,407 companies between May 27 and Wednesday, of which 99.2 percent responded.

Ideas:

With the latest virus situation getting worse in Japan and now globally too, some manufacturers are probably not to happy if it affect the demand for their products.

Nonmanufacturers who are most likely in the services sector might see some daylight but not much as the virus situation as now exploded again.

Regrading the currency exchange rate, exporters prefer a weak rate compared to a stronger rate. With a weaker rate exporters can get more from the sales of their products overseas. With a stronger currency rate, they lose more.

Importers are the opposite from what exporter need or want. They prefer a stronger rate, which means they have to pay less to import products, for example from the US.

Have a nice day and be safe! 

Japan Industrial Output:

 https://mainichi.jp/english/articles/20210630/p2g/00m/0bu/035000c

Article:

TOKYO (Kyodo) -- Japan's industrial output in May fell 5.9 percent from the previous month, down for the first time in three months, as carmakers and other manufacturers cut back on production due to a global chip shortage, government data showed Wednesday.

The seasonally adjusted index of production at factories and mines stood at 94.1 against the 2015 base of 100, the Ministry of Economy, Trade and Industry said in a preliminary report. The result followed an upwardly revised 2.9 percent rise in April.

Ideas:

Manufacturers might have cut back on production because of the chip shortage, but is it possible that they might have been able in the previous months to increase inventory so that if a cutback occurred they wouldn't lost orders or customers. 

In other words are the manufactures able to produce more than they want, expect, or need in case situations occur that they have to cut back.

And or was the shortage something that has been happening for a while, and the best they could do each month was to meet their estimated output and nothing more.

Article:

The 5.9 percent fall was the sharpest drop since a 10.5 percent dive was marked in May last year when the world's third-largest economy was hit hard by the government's first state of emergency over the coronavirus pandemic, declared the previous month.

By industry, the auto sector plunged 19.4 percent from the previous month following a 1.0 percent fall in April. The global shortage of semiconductors used in new cars forced automakers to cut production, a ministry official told reporters.

Ideas:

A resource such as semiconductors, of such great importance, you would think, manufacturers, if possible, would have multiple sources and not just rely on one supplier.

But the next question is how did the semiconductor chip market get into this situation. Was it preventable, weren't they able to produce enough chips to have a backlog of supply in case any scenario like this happened. 

Is this a logistics problem, a supply problem, a pandemic related problem, or suppliers not being able to find the resources needed to produce the chips.

While exports are very important for the Japan economy, they are not the entire economy. So yes, its not good but Japan no longer is just a manufacturing only economy like decades before. 

The Japanese economy is now a fully advanced services economy, so a 19.4 decrease in the auto sector, while an important part of the economy, is not everything in the Japanese economy.

Article:

Output in the electrical machinery and the information and communication electronics equipment sector sank 4.5 percent, as manufacturing of lights for cars and air conditioners was also affected by the semiconductor shortage, according to the official.

Makers of machinery used in production, including chip-making equipment, slid 5.9 percent after a 7.7 percent boost in output in the previous month.

Meanwhile, the overall decline was cushioned partly by a 7.2 percent gain in transportation machinery except for cars, as well as a 2.2 percent increase in chemical products.

Ideas:

Again despite the decrease in output in the above sectors, they are not the entire Japanese economy. Yes its not good but the Japanese economy should be able to maintain some kind of modest growth during the pandemic.

As the above results show, the Japanese economy, like any economy is very complex and made up of a lot of different areas or sectors. While some might be down, some are going to be up. That's just how an economy works, in the pandemics or in normal times.

As with any resource, such as semiconductor chips, do companies have agreements lets say globally, to find other sources of supply. Meaning if a company is running low of a resource can they find ways to get the resource globally.

But the chip shortage being global maybe many companies are having the same challenges and all companies are in the same situation, and unable to find chips sources from other companies.

Article:

The ministry maintained its assessment of industrial output, saying it is "picking up."

Based on a poll of manufacturers, the ministry expects output to rise 9.1 percent in June and decline 1.4 percent in July.

"Recovery in demand for domestic and overseas capital investment is expected to continue," the official said, while warning of further fallout from the chip crunch and the economic impact of the spread of coronavirus variants.

The index of industrial shipments decreased 4.7 percent to 93.1 while that of inventories dropped 1.7 percent to 93.1.

Ideas:

Output may rise in June but why a decrease in July other than the beginning of the Obon season which is the major summer holiday period in Japan, as maybe some companies will take a holiday during this time and some production might be shut down.

Capital investment is always dependent on the sentiment of companies, as do they see the economy improving in the future, or globally. 

And yes, the new virus variants are going to slow down the economy some, again, as the Japanese economy is in a roller coaster situation, meaning up and down as the pandemic continues on with no end in site.

The increase or decrease of inventories can usually mean two things. If there is a continued increase in inventories that might mean demand is not as good as expected and or a company overestimated what demand would be and now they have a lot of inventory just sitting and they overproduced.

The other side of the equation meaning if inventories are low, again they might have underestimated future demand and they can't meet demand. And then the situation now might be there is a shortage of resources to produce something, such as with the semiconductor chips.

Have a nice day and be safe!

Japan's Jobless Rate:

 https://mainichi.jp/english/articles/20210629/p2g/00m/0bu/020000c

Article:

TOKYO (Kyodo) -- Japan's unemployment rate worsened to 3.0 percent in May, hitting the highest level in five months, as a government state of emergency over the coronavirus pandemic was extended to more of the country, government data showed Tuesday.

The seasonally adjusted jobless rate rose from 2.8 percent in April, up for the second straight month, according to the Ministry of Internal Affairs and Communications. It had stayed in the upper half of the 2 percent range since logging 3.0 percent in December.

Ideas:

Japan has had and still has one of the lowest unemployment rates among advanced economies. While 3.0 percent might not be good for Japan, its still very good among many countries.

But even though the unemployment rate is only 3.0 it still doesn't tell the entire story about employment. Such as how many jobs in the economy now are part-time, temporary, and or contract jobs with little or no benefits.

After the 2008 financial crisis, many companies in Japan and globally started to shift their work force to more contract or temporary workers instead of the so-called full-time or even the so-called life-time jobs in Japan.

So is it possible that during the pandemic Japanese companies are going to increase the number of employees who are part-time, contract, or temporary workers.

An economy can't survive or grow correctly if there are too many temporary contract workers. Workers are consumers or spenders in the economy. If they don't have enough disposable income, or extra income, the are not going to use their money in the economy, except for their daily basic needs.

Article:

Separate data from the Ministry of Health, Labor and Welfare showed that the job availability ratio in May was unchanged from a month earlier at 1.09, meaning that there were 109 job openings for every 100 job seekers. It fell 0.01 point in April.

In the final week of the reporting month, 10 out of the nation's 47 prefectures were under a third state of emergency over the virus that was initially declared in late April for Tokyo, Kyoto, Osaka and Hyogo but expanded later.

Ideas:

Again what kinds of jobs are available for workers. If they are good paying jobs then the economy will grow correctly and move forward correctly. If they are not or if there are a lot of contract type jobs, which usually have a lower pay, then the workers are not going to feel good spending any extra income they have because they don't think its enough.

As such the Japanese economy, or any economy is not going to reach it full growth potential. Workers again, are consumers, and they need to feel good about about their jobs and their salaries and how much disposable income, or extra income, they have before they fully participate in the economy as consumers.

The new emergency measure, while most likely needed, might need encouragement to consumers to get out and spend, and its not going to bring encouragement to those businesses that have to close early and lose sales and profits.

Article:

With requests for people to stay home, alcohol-serving establishments to close temporarily and other commercial facilities to cut operating hours, the measure was repeatedly extended beyond the initial end date of May 11, dealing a blow to the world's third-largest economy.

Except for the southern island prefecture of Okinawa, the virus emergency was lifted last week, but among the 10 prefectures, seven including Tokyo have shifted to a quasi-state of emergency, allowing targeted anti-virus measures for specific areas rather than entire prefectures.

Ideas:

The continued pandemic situation in some ways might be causing problems for companies and hiring, even though the job availability ratio appears quite high. 

For some companies, as with any economy, as an economy is very complex, the pandemic might not be affecting them that much. But of course with some companies the pandemic is having huge affects as a result of less customers, less sales, and less profits.

The longer the pandemic continues the more stress some companies are going to have if they can't get some support such as subsidies from the Japanese government.

Article: 

The latest outcome showed that the number of people in work fell 130,000 from the previous month to 66.45 million, down for the third consecutive month.

The number of unemployed increased 100,000 from April to 2.04 million. Among them, 810,000 people voluntarily left their jobs, up 70,000, while 630,000 were laid off, up 30,000, and 480,000 were new job seekers, down 10,000.

Ideas:

So it seems the pandemic is still causing many challenges in the Japanese economy has lost even more jobs.

The challenge with these numbers, people, is will they be able to go back to work in jobs that they had before the pandemic situation.

For example the those who voluntarily left their jobs, will they be able to return to the jobs they had before the pandemics. Those who were laid off will they be able to return to their previous jobs.

And then can these people find good meaningful well paying, if they had those kinds of jobs before the pandemic.

The pandemic or any major shift in an economy, if the pandemic has caused that, can bring major shifts or changes in the kind of jobs available once the situation ends.

Article:

The gender gap in the jobless rate narrowed, as that for men was flat at 3.2 percent while that for women was up 0.4 percentage point to 2.7 percent.

"The outcome seems to reflect the fact that more female workers continued to look for new jobs," a government official told reporters, saying such women included those laid off as companies struggled due to the pandemic and those who voluntarily quit their jobs.

Ideas:

Globally women seemed to have the biggest challenges related to the pandemic and jobs. Most likely because, unfortunately, many women work in service type jobs, which at the present time is the sector that is most affected by the pandemic.

If you add in child-care costs and if they have children in school, and the children have or have to study online at home, it adds extra stress on women who for the most part take care of children.

Have a nice day and be safe!