Japan Current Account, 2024: Updated May 14, 2025.

Japan logs record 30 tril. yen current account surplus in FY 2024

Article source: https://mainichi.jp/english/articles/20250512/p2g/00m/0bu/020000c

Ideas

Japan's economy is 4th or 5th largest in the world now, and its current account is very important for Japan to ensure that it can keep its economy afloat and not go into bankruptcy as it has the highest GDP to debt ratio in the world.

Because its domestic economy is not that strong, Japan has to depend on foreign investments, foreign tourists to spend money in Japan, and on exports such as Japanese cars to the US.

It's seems Japan a long time ago, decided that exports and foreign investment were what was needed to keep the Japanese economy going.

It must be remembered that the weak Japanese yen has played a big part in increasing the current account as a weak Japanese yen increases the profits of Japanese export companies along with increasing foreign investments, and increasing the purchasing power of foreign tourists in Japan, which means they spend more in Japan.

International trade has become a major economic driver for the Japanese economy, as without international trade, the Japanese economy might not grow that much, as seen in recent years.

The Japanese economy seems to be relying a lot on the weak Japanese yen, to boost its economy but it might not be that way always, as Japan needs to improve and grow its domestic economy too in case international trade begins to decrease.

For example if the Japan delegation conducting negotiations with the US delegation related to the tariff situation, doesn't turn out in Japan's favor, demand for Japanese products such as Japanese cars could decrease in the US, as US consumer demand will decrease with the high tariffs being added to the costs of Japanese cars in the US.

Yes, it must be remembered that the weak Japanese yen, increases the value of products not necessarily the volume of products, which in itself is good but its important to know that demand for Japanese products is also important and again not just the weak Japanese yen.

The Bank of Japan, which manages the Japanese economy knows that what is happening is a balancing act, meaning it has to look at the weak Japanese domestic economy and the stronger export economy and try to find a balance between the two sides of the same coin.

Again, there is the volume affect and there is the value affect and because of the weak Japanese yen, the value for imports into Japan has been increasing as the weak Japanese yen increases the value of imports into Japan. 

The volume of imports might not have decreased that much but the value of imports might have increased a lot in recent months and years.

Assuming the stats being given are values and not volume the value of imports grew 110.29 trillion yen, while the value of exports grew 106.24 trillion yen, which means a deficit of 4 trillion yen. 

That might not seem like much but it could be significant for the Japanese economy and the growth of the economy.

Japan has a way to go to improve its travel balance but is making significant progress with 38.85 million foreign tourists visiting Japan in 2024.

The weak Japanese yen, gives foreign tourists more purchasing power, which means they can spend more in Japan compared to if the Japanese yen was a strong currency. Foreign tourists spending a lot of money in Japan might be one of the only bright spots at the moment for the Japanese economy.

Again, foreign tourists spending in the Japanese economy, at the present time, might be the only real bright spot for the Japanese economy, as Japanese domestic residents are challenged due to continued inflation which limits their disposable income, which means they spend less in the economy.

Most likely, the Japanese holiday period called Golden Week, usually the first week of May might have seen less travel and less spending the normal years about Japanese households might have cut back on travel and spending during the Golden Week period.

Have a nice day!

Japan. EU Reaffirm Global Free Trade: Updated May 13, 2025

Japan, EU reaffirm collaboration in maintaining global free trade

Article source: https://mainichi.jp/english/articles/20250509/p2g/00m/0bu/010000c

Ideas:

Japan and the EU have a free trade agreement and they are communicating that free trade is the main course of action for the global economy. 

The global economy, for the most part, has worked quite well since WW11, but the US administration wants to make it work in their favor, which is going to upset the entire free trade and global logistics system in place.

In recent days there have been news about the US/US trade agreement, but to be honest its not much of an agreement and only makes the US look good or make it look like it was landmark deal, which it wasn't.

And also in recent days the US lowered the tariffs on China and paused tariffs for 90 days, and it seemed the US admin. backtracked based on pressure from the markets.

Yes, its a very good idea to work with like-minded partners to achieve what is needed for economic security in the future, especially related to supply chains which are very vulnerable to all kind of mishaps which can affect all economies.

Unfortunately, at the present time, the US might not be a like-minded partner as it might take three or four years for the US to come to its senses again.

And maybe the same with China too, but China is a very different situation as its economy is having major challenges at the present time.

It's good that the EU and Japan are communicating their needs as they understand each side, which might not be the case with the US which only wants what it wants.

Its a little strange that the US and Japan don't have a free trade agreement with all the trade, both imports and exports between the two countries.

Hopefully Japan will stand its ground and not give in to pressure from the US on tariffs in the future. 

The America first banner is not going to work as the global trade system is too interconnected these days for any country to be its own island or isolated. 

The only thing that is going to happen is US consumers are going to pay the price with higher prices on everyday things, and its happening now.

Japan needs to plot its own course, but it might be a little too late as it's highly dependent on US consumer demand to buy Japanese products.

Unfortunately the EU economy is not the US economy in terms of economic growth or even consumer demand, and the Ukraine situation doesn't help much.

If the EU economy was robust or strong enough then maybe just maybe Japan could focus more on the EU and less on the US. 

And the same with China, but, again, the Chinese economy is very weak at this time and who knows exactly when its going to improve.

But only time will tell and negotiations between the US and many countries are still going on and hopefully each country will be able to hold its own and not given to the selfish demands of the US admin.

And yes, China sometimes doesn't play by the rules exactly, but again the US and Chinese economies are too interlinked for anything major to happen.

And the financial markets are the real moderators in this struggle and they will eventually decide what is good or not good.

Have a nice day!

Japan Household Spending: Updated May 10, 2025.

Japan FY 2024 household spending down for 2nd year amid rising prices

Article source:  https://mainichi.jp/english/articles/20250509/p2g/00m/0bu/020000c

Ideas:

A real 0.1 percent decrease for fiscal 2024 is not that much but it shows a trend that Japanese consumers are decreasing their spending as inflation continues in Japan.

A decrease of 0.1 percent might be an average so there might some who decreased their spending more and some consumers who didn't decrease their spending at all.

Food prices seem to always be in the news and for good reasons, as food expenses make up about 30 percent of all spending by households globally, not just in Japan.

The 304,178 yen might be an average again, as maybe there are some households that spent less due to the fact that they have less income to spend and they are watching every yen closely.

Yes private consumption or consumer spending might make up half of Japan's gross domestic product or GDP but the challenge has always been in Japan that its not enough as it should be much higher like in the EU or the US where is over 60 percent of GDP.

Consumer spending in Japan has challenges due to the shrinking of the Japanese population as there are less Japanese consumers to spend in the economy to keep it moving. 

So Japan depends a lot these days on foreign tourists to bridge that gap but it not enough, as Japan needs a steady influx of qualified workers that can stay and live in Japan and spend money like Japanese citizens.

Real wages while improving the last two years, haven't kept up with whats going on in Japan for many years, and real income just keeps falling behind, which means Japanese consumers/Japanese households just can't keep up with inflation even some of them might be getting wage increases.

And yes, companies keep passing on labor, raw materials costs, and energy costs to the next in the supply chain including the final retail customer.

Japan is in something kind of bubble that it can't seem to get out of no matter how hard it tries with continued inflation, companies passing on costs, and low wage growth that can't seem to get past the line where the economy can grow again.

Yes, as prices for food product continue to increase Japanese consumers will continue to cut back as much as possible which of course will hurt the Japanese economy, Japanese companies, and the Japanese labor force.

Japan is a resource-poor country which means it has to import much of what it needs and the weak Japanese yen doesn't help as it does push import prices up and makes it more challenging for Japanese consumers to buy what they need or want.

The only good idea about the weak Japanese yen is its good for foreign tourists as they now have more purchasing power and can spend more in Japan.

A weak Japanese yen is good for Japanese export companies too, as they can get more for the products overseas and it increases the Japanese current account too.

The Engel coefficient, while a very old economic idea is still very relevant today, as its a good indicator of the standard of living for a society or country.

Yes, it indicates that maybe the standard of living in Japan has decreased as Japanese households are spending more on food than ever before, but at the same time, 28.3 percent might just be an average as some households might spending more and some might be spending less. 

If we could separate inflation and spending on food it might be a different situation as maybe, as expected, if inflation were lower than there might be less spending on food. 

At the same time if wage increases in Japan were higher for all Japanese workers then spending on food might be even lower, but all of these are just ifs and not reality at the moment.

Japan used to be a somewhat smooth operating economy without all of the scandals and situations now taking place.

But now there are many different situations affecting the economy that was not there before or at least not before the bubble crash of 1989.

Inflation too, might be the reason there is less spending on transportation and communication as Japanese consumers are cutting back on everything they think they don't need.

Just because there was an increase in spending doesn't mean it was related to an increase in consume demand as the article suggests it was most likely related to higher electricity bills and rising admission and tuition fees.

Japanese families, like families everywhere spend on things they think are need and important as maybe tuition for their children to go to private universities is a major priority.

Nominal wages really don't matter and real wages is what is important and nominal wages contain inflation while real wages are wages without inflation.

Real wages indicates how much spending power a worker has and able to spend while nominal wages hide that fact.

Both 4.2 and 4.3 indicate prices are too high in Japan and the average Japanese households will continue to see their disposable income decrease as they have to pay for higher food prices and don't have much left over for other spending in the Japanese economy.

Rice is a major problem and major challenge now as rice prices continue to remain high since the so-called rice shortage of the summer of 2024, even though the Japanese government has been releasing stored-up rice supplies to try and bring rice prices down with almost now affect on prices.

Have a nice day!

Japan Uniqlo CEO: Updated July 29, 2025.

'Japan-first isolationism' threatens to exacerbate economic decline: Uniqlo's Yanai

Article source: https://mainichi.jp/english/articles/20250505/p2a/00m/0bu/013000cated

Ideas

The "Japan-first isolationism" is not only related to people but also Japanese products that can no longer compete on the global stage. Products from South Korea and China have now moved way past Japanese products and many Japanese products that were global in the  80's and 90's are all gone and no where to be found, simply because they didn't innovate and change as needed.

Yes, there seems to be less energy in Japan these days as it seems some or many walk around like zombies or just existing in life because maybe they feel there are just too many barriers from them to move ahead in life.

And yes, Japanese companies seem to have lost their ambition to be a global company these days and they see the price needed to be successful on the global state just too much for them now.

Its much easier to exist in the Japanese economy only than to compete against US companies, Chinese companies or even South Korea companies these days.

Low-performing companies that need loans to survive have been doing so for many years, maybe the last 30 years. There are now thousands of zombie companies in Japan that should be closed or exit the market but because there are so many it would probably harm the economy even more to close them all.

The Japanese government has been using the same practice, related to infrastructure projects, for a very long time as a way to try and stimulate the economy with no real effect.

Increasing earning capacity mean companies changing their mindset from old-school Japanese style work to 21st century work which many Japanese companies are unwilling to do even today.

Also many companies really are not interested in real economic growth, they only want to survive and keep the status quo and not rock the boat, as even zombie companies that still stay in business these days.

The Japanese company mindset it to think in yen terms as that is probably what they trade in everyday while the rest of the world now trades in dollars.

Yes, using the yen is an illusion. For example the yen trades at 100 yen or increases to 120 yen, or increases to 140 yen. So what has happened the Japanese yen has weakened and the bigger the yen gets the weaker the yen becomes, while the dollar gets stronger.

Yes, there are some 21st century Japanese companies that are on the mark but there are few left these days that think globally.

No country is isolated or stands alone as logistical supply chains have connected every country around the world.

It might be easy for some Japanese companies to think they are just a Japanese company but they are part of a bigger picture and if they don't see it soon Japan will continue to slide further down the global importance index.

Yes, inflation is much higher than that as there a economic factor that makes it maybe two or three points higher than 3 percent and its the same globally in all countries.

There used to be a thought that as prices increased, then wages would increase and everything would be kept in a normal balance. But that balance has been shattered in recent years, as prices continue to increase and wages have not kept up with the increase in prices. 

So what has happened, frugality or austerity has set in which means there is now less spending in the Japanese economy instead of more spending which is needed to get the economy moving again.

The problem is not the increase in prices, which is normal and expected but again, in most countries, including Japan, wages have not kept pace with prices increases which is needed to grow economies these days.

Back in the 80's and 90's Japan had some of the best brands globally but as the lost-decades period set in, and wages began to decrease, deflation hit Japan and many companies started to focus on low prices and not on brand-value. 

But the tide as changed and prices are increasing again and companies know they need to again focus on branding as a way to offset the high prices mindset or the mindset that high prices are not good and will not buy but if companies like GU and Uniqlo again focus on improving the brand customers will again not think of prices but how good the products are.

Uniqlo needs to be very careful that it doesn't create a company that only looks at the best talent available or the best performing employees as some employees in a company are diamonds in the rough and some employees take time to grow in a company.

If you create a company that is inclusive for all types of talent and not just the 1 percent at the top a company can reap the benefits of all of the talent available to a company.

There was a recent article that said some younger employees in Japan like the seniority-based system instead of the more competitive merit based system. That might say a lot about some Japanese young workers as they don't want to compete in the market place and just want to exist in a company.

But both systems have positives and negatives depending on a person's preferred work style, as the more ambitious might prefer a merit based work system while the less ambitious might prefer the seniority-based work system.

Yes, the cost of living in Tokyo is high but it's not that Tokyo is that expensive it's that many companies just don't pay their workers good starting salaries.  

Japan, compared to other advanced nations has some of the lowest corporate salaries globally and its getting worse compared to the starting salaries for new workers in many countries.

Rural development is not so good in many countries and what Japan is experiencing might be very similar in other countries such as South Korea, where all young people want to go to university in Seoul or to work in Seoul instead in the rural areas.

That can be said for the US too in many states or regions that are rural and will continue to be rural with very little development.

Again, it's the same in South Korea and or the US. How can a company get 1,000 workers to leave Seoul and move to a rural area in South Korea as they might build a new factory in some small out of the way town.

It's the same in the US as a how can a car company that wants to build a new factory in rural Mississippi in the US and try to get 1,000 workers to leave a vibrant city area to work in the rural south in the US.

Yes, borders for the most part have vanished but not for all companies or everyone as some companies and individuals don't want to live an a world without borders.

Again, some companies are content to live only in the Japan and their Japanese only mindset, but to be fair that mindset exists in many countries and many companies too as they don't see the need to engage with the rest of the world.

Again, many companies or some companies don't want or feel they need to see themselves as part of the wider world as they are content being in their little niche in Japan which is comfortable for them at the moment.

And again to be fair, the mindset exists everywhere in the world too and its not just a Japanese problem, but a global problem for some companies.

But the challenge is once a companies tries to enter a global market now there are a multitude of challenges that they must now overcome to even be a player in that market and some companies might be reluctant to enter the global stage.

But at the same time, some Japanese companies might have become stagnant in Japan with a Japanese market mindset only and maybe the only way to get out of their stagnation is to take a leap of faith and enter the global stage where the rewards are much bigger but so are the risks need to survive.

Have a nice day!

Bank of Japan News: Updated May 7, 2025.

BOJ maintains rate hike path despite uncertainty around US tariffs

Article source:  https://mainichi.jp/english/articles/20250501/p2g/00m/0bu/031000c

Ideas:
Just because the Bank of Japan says it remains on track to pursue additional interest rates doesn't mean its going to do it anytime soon, with the uncertainty of the global economy facing all countries.

What the Bank of Japan might be trying to do is keep the Japanese stock market calm and not cause any more harm as there has been enough damage done already due to the US administrations actions.

No one is certain at this point as both Washington and Tokyo still haven't come to any solution to the proposed tariffs and it could take some time for everything to be sorted out.

There appears to be too much uncertainty in what is happening now and companies and stock markets don't like uncertainty. Japanese companies, like all companies, need certainty or near certainty to plan and invest correctly and when there is too much uncertainty like now, they put off investment plans or even trade plans.

At the same time it's even a challenge to try and estimate the effects of the tariffs as there is no real certainty about them other than the 10 percent tariff already implemented.

Even though there might be some certainty with the 10 percent tariffs no one knows how long they will be in effect as evidence related to the Mexico and Canada situation.

What this might suggest, related to the inflation situation in Japan, is central banks might not have that much control over inflation and how to really reduce it. For example even the US never completely reduce inflation and it was still a major challenge for the US economy for a very long time.

What Japan needs or maybe needs is some real and effective free trade agreements that can help to lower the cost of imports to Japan, as Japan is resource-poor country and has to import much of that it needs, and if the Japanese yen remains weak, that means imports will be that much more expensive. A free trade agreement might help to reduce the price of imports.

But unfortunately, what the US administration is trying to do it not a free trade agreement that helps both countries but rather is more one-sided and helps the US only.

But it really doesn't help the US, and that is the real problem as US consumers are going to be hit hard with prices of everyday goods are going to be more expensive. 

Just what does "back and forth" mean related to the next rate hike. Does it mean the rate could go either way. if so, that is not a good message for the markets or even businesses and how do they prepare for those kinds of actions in the future.

The Japanese economy growing 0.5 percent is neither good or not so good, but its better than no growth at all, as has been the norm for many years with the Japanese economy.

A growth of 1.1 percent might have been a little ambitious but maybe it's better to be optimistic instead of always estimating a near zero or negative growth projection.

Core consumer prices keep increasing in Japan, but do Japanese consumers or Japanese households really feel a 2.2 percent increase. As every consumer is not the same as all consumers don't buy the exact same food or products.

A supposed weak Japanese yen might mean import prices will be higher and the Japanese domestic consumer will have to pay for the whatever they buy in Japan, while for foreign tourists in Japan a weak Japanese yen means they have more purchasing power or can buy more for the same amount for yen.

The weak Japanese yen might not be the best time for the Bank of Japan to increase its key rate as maybe the effects or side-affects of the weak yen could cause more harm to the Japanese economy that needed.

Yes, September or October might be the best time to have a rate hike, but all depends on what the US is going to do, as the proposed tariffs could significantly curtail any economic growth desires in Japan in the future.

You would think the Bank of Japan needs or wants demand-driven inflation, which might mean, in one sense that consumer demand is strong but supplies are limited. So maybe it's not  a demand problem but a supply problem in Japan, as companies can't keep up with the demand of Japanese consumers.

The Bank of Japan for a long time said the Japanese economy was too weak to increase the key rate and the side-affects would be too much for most consumers or businesses in Japan.

A country's GDP is not the be all of all economic indicators and it doesn't explain or tell the full story of what's going on in an economy. 

Just ask the person on the street if they know anything about GDP or what it means and see  if they tell you that their lives have improved with a 0.7 percent increase in the GDP.

Core CPI, while an important economic indicator again doesn't tell the complete story as maybe some Japanese consumers really don't feel the increase in prices while some Japanese consumers might feel the increase a lot in what they buy.

It's important to know about economic indicators but each consumer is different and they all have different experiences related to costs and buying things or anything in an economy.

The global economy and the US economy and most likely the Japanese was doing relative well for each respective economy, but all economies have been hit what a major challenge now and most if not all businesses are not sure what to do and businesses don't like uncertainty and they need certainty to plan and invest correctly.

Unfortunately, most stock markets globally had significant losses due to the tariff situation and real people lost a lot in the stock market not to mention their savings and retirement savings.

This is a good example of what might happen in the future for Japan if demand of Japanese export products such as cars or other products decrease and imports surge, as again, Japan is a resource-poor country and needs to import much of what it needs.

Have a nice day!

Japan's Jobless Rate: Updated May 4, 2025.

Japan's jobless rate in FY 2024 falls to 2.5% amid labor shortage

Article source: https://mainichi.jp/english/articles/20250502/p2g/00m/0bu/016000c

Ideas:

No country or economy will ever get 0 percent unemployment as there are always people moving in and out of the workforce, but Japan 2.5 percent seems, on the surface to have good unemployment numbers.

But the 2.5 percent doesn't really tell  the real story as there might be many working contract jobs, many working part-time jobs which can skew the results. Contract jobs and part-time workers might not be getting any of the normal benefits that full-time workers get.

A labor shortage usually benefits workers but again, what kinds of jobs are being offered to those who need a job and or those looking to change jobs in Japan.

Again the numbers might look good with 370,00 more jobs being filled, but what kinds of jobs are being filled. Are they full-time jobs with good benefits that many Japanese households need or are they just contract jobs that pay less and even less in benefits.

The challenge. always is small and midsize companies that are always the last to fill jobs with good workers as many workers of course want to work for the large-name brand companies and or want to work in the major metro areas of Japan.

So the challenge is for the small and midsize companies to pay at or near the same as large Japanese companies to attract the best workers but they usually don't have the resources needed to match the wages of the large companies.

There could be many reasons why 220,000 thousand workers and not just for poor work performance such a company might have experienced low sales or profits for a long time and had no choice but to lay-off workers. 

Some companies maybe couldn't find the workers they needed to do the work the company has to do and so they had to lay-off their remaining workers. 

There could be many other unknown reasons why companies lay-off or fire workers, which is sometimes uncommon in Japan.

For a long time it was almost unheard of for Japanese workers to change jobs, and especially in large companies, but maybe those days are long gone, as the Japanese workforce has become more flexible and more mobile in recent decades.

For a long time there might have been a stigma against changing jobs in Japan, as maybe it was frowned upon as not being loyal to the company that originally hired you. But again, a lot has changed in Japan and workers today are, for the most part,  are looking for better opportunities and better work/life experiences instead of the traditional long work hours of the traditional Japanese company.

The Japanese government has known for a long time that a labor shortage was approaching but maybe hasn't been able to really do anything about it, as the Japanese population has been consistently shrinking with one of the lowest if not the lowest birthrates among advanced countries.

There is always the idea of immigration to help with the labor shortage but there just aren't enough qualified foreign workers yet with good Japanese language skills.

There are always enough workers willing to go to Japan to work but the Japanese immigration system is not set up to handle or allow all the foreign workers that want to work in Japan along with a reluctance to let everyone into Japan to work.

Again whether 2.5 or 2.4 Japan has one of the lowest unemployment rates in the world but again what kinds of jobs are available for workers. In many advanced economies these days contract work, not full-time jobs with good benefits, is becoming more common each year, as companies, globally, are trying to cut costs and please shareholders with better profit returns.

Even at 1.25 jobs for every job applicant is very good in Japan, and maybe, unfortunately, for some workers these might be for small and midsize companies that don't give the same wages as large Japanese companies do.

There seems to be many good jobs in Japan for Japanese workers, but these days maybe Japanese workers have become more picky as they don't want, if possible, the normal traditional job at a Japanese company of long hours and maybe even weekend work.

Of course it would be nice if everyone could get their ideal job but that is not how a market economy works so workers have to make compromises and take the best job they can that might meet their expectations.

The labor situation in Japan is probably not going to change much until there are significant changes in the Japanese workforce.

The birthrate in Japan is not going to change enough to improve the labor shortage, and its the same in many advanced economies these days.

Again the only real solution is to improve the Japanese immigration system that allows more foreign workers to work in Japan. And then there is the need that foreign workers have better Japanese language skills, as Japanese society and most if not all Japanese companies don't have sufficient English language skills.

Japan is not like the EU where you can probably get away with just using English, except for maybe France for everyday work or even surviving in society.

The information and communication sector is probably seeing increases in companies who need workers to handle AI tasks or skills and more companies being digitized for the workplace.

The accommodation and restaurant services sector might be still trying to make up for their huge losses during the pandemic including having to layoff many workers and at the same time having to increase staff due to the huge increase in foreign tourists entering Japan.

Both the retail and wholesale sector and even the lifestyle and entertainment services sector might be experiencing sales and profits decreases due to continued inflation in Japan as Japanese households have cutback on discretionary or extra income spending as inflation has eaten away whatever extra income they have or had, so the don't have or can't spend it on those areas listed that have seen job loses and or not hiring like they used to or need to.

Have a nice day!

Bank of Japan Unchanged: Updated May 5, 2025.

BOJ to leave policy rate unchanged amid US tariff uncertainty

Article source:  

https://mainichi.jp/english/articles/20250430/p2g/00m/0bu/012000cArticle:

Ideas:

The Bank of Japan, like most central banks, are very conservative and don't make moves unless they feel it's extremely important for their own economy.

There seems to be just too much uncertainty now with the China/US situation and of course the tariff situation which one knows exactly what is going to happen in the near future.

And then there is the tariff situation on car parts, which Japan is a major producer of car parts and demand for Japanese made car parts might see decreased demand in the future, which could cause real harm to some Japanese car parts makers.

Because the administration in the US has caused global havoc no one knows exactly what is going to happen and what even worse they have caused havoc among long-time US allies to make it even worse.

The chances of a Japan recession has maybe increased to maybe 50 percent of more now as Japan exports a lot to the US, and the demand for those exports could decrease significantly in the near future.

The Bank of Japan is not going to increase the key rate with the potential of a recession lurking more and more in the future as a recession and a higher rate increase could have huge consequences for the Japanese economy.

Even as wages have increased on April 1, the beginning of the new year, inflation might still be too high for most Japanese households to feel good about the wages increases.

The problem and always has been that over 70 percent of the Japanese workforce don't work for large Japanese companies but small and midsize companies that can't match the wage increases that the large companies give, which means most if not all of the workforce is not feeling good about the wage increases they have received.

And related to how companies and the stock market feel, they want certainty and not volatility and with the current situation now there is no certainty only uncertainty about the future.

The current administration has no idea about absolute and comparative advantage as products made in other countries besides the US are made there for the good of the global economy, as if made in the US they would be too expensive for most US consumers, who now have gotten used to products made in China, Vietnam and other countries that can make products more easily and cheaper which benefits everyone.

The global economy, like the US economy could be headed for a recession or maybe even worse unless smarter heads can figure out how to solve the current situation.

Even a 10 percent tariff might be too much as along most supply lines or supply chains the price of the product can be increased to make up for increased costs which then is passed onto the final customer.

It might take a year or two more before the BOJ's 2 percent target is reached if at all. The problem is Japan is a resource poor country and has to import most of what it needs and imports drain the current account which could potentially cause havoc with the weakening of the Japanese yen in the future, which make it even worse.

Wages might have increased by 5.1 percent but that might not have been again for all Japanese workers as most of the Japanese workers don't work for large Japanese companies but small and midsize companies which usually don't have the same resources as the large companies needed to increase wages that much.

Japanese consumers, this week are probably not traveling as much as last year or spending as much this time during the Golden Week period which is a major holiday period for Japanese households, due to the continued inflation situation in Japan.

Have a nice day!