Japan Minimum Wage increase: Update Sept. 11, 2025.

Japan's minimum hourly wage hits record 1,121 yen amid rising prices

Article source: https://mainichi.jp/english/articles/20250905/p2g/00m/0bu/055000c

Ideas

The increase in the minimum wage is both a positive and negative depending on which side of the coin you are on.

For many companies it's a negative as an increase in the minimum wage is an increased cost that many companies can't afford as it increases their profits margins and puts more pressure on companies.

For wage earners and especially part-time or even contract workers it's a needed wage increase as many of them rely on the minimum wage as their only source of income.

Some would say, and rightly so, the minimum wage should be a living wage meaning it should be high enough for workers to pay their bills, pay their rent, and other expenses in life.

Wage hikes are good and needed but again its depends on which side of the coin you are on, as wage hikes are a major cost for companies, and especially small and mid-size companies which some really can't afford as there profit margins are already stretched thin with increases in labor, raw materials, and energy costs.

Maybe the large companies can easily handle the wage increases but again its a major stress for many companies that can't afford them.

It must be remembered that up to 70 percent of workers in Japan don't work for the large name-brand companies but work for small and midsize companies which most likely can't match the wage increases of the large Japanese companies, which might mean if they do get an wage increase inflation might still be a major challenge for them.

South Korea back around 2015 or so tried to increase the minimum wage with mixed success and they provided subsidies for small companies that were having challenges with it. 

South Korea increased the wage a little over several years but many companies had to reduce the hours of some workers, reduce hiring, even laid of some workers and they claimed it was too much too soon for them.

South Korea has even started to experiment with many forms of automation as a way to reduce labor costs with robots at restaurants, self-check out convience stores, and self kiosks at fast food places.

The 7.3 percent increase might be too much for many companies as they are again struggling with raw material costs, increased labor costs, and high energy costs now. 

It's good that different prefectures were able to see difference in wage increases as the cost of living in Tokyo is much higher than the cost of living in some more rural prefecture, which are like states in the US.

But again, is a minimum wage of 1,226 enough for some to live on as maybe some workers who get the minimum wage might be single women with children, women how need to work part-time to help their families, and even university students who need to pay for their college expenses, and then there the fixed income group who need to continue to work and rely on the minimum wage to survive.

The major challenge or problem is not really with the minimum wage increase its the constant increase in raw materials and energy costs that just keep increasing each month in Japan which puts too much pressure on companies and then when there is minimum wage increase they have no room in their profit margin to to increase wages.

And then there is the possibility that some small companies are held hostage by the large name-brand companies as they don't want to accept the small companies strategies of pass-on their costs to the next in the supply chain which could be the large companies.

Many small companies in Japan are suppliers to the large companies as they make one or two products only for the large companies and some large companies refuse to accept the increase in prices that the small companies need to do to survive.

Unfortunately, it seems like each new Prime Minister makes the same pledge but nothing really gets done as the small Japanese companies are still struggling with high labor costs, high energy costs, and high raw material costs.

Again, in South Korea the government gave subsidies to help the small companies with the minimum wage increases but it didn't seem to really help much as they again had to lay off workers, reduce the hours of workers, and even stopped hiring new workers.

Again, its good that each prefecture can have a different wage as the standard of living in Tokyo is much different than the smaller rural prefectures in Japan, which of course many companies, if they had to use the same minimum wage as in Tokyo  might go out of business.

On the surface there appears to some real challenges for many small companies in Japan as they just don't have the same benefits as the large companies have. That might be just the nature of the market and large companies have more resources available while many small companies might just be living from month to month just trying to survive in Japan.

Small companies are the heart of any economy as there are more small companies than the so-called name brand companies which of course get all of the news and all the benefits while the small companies just get the scraps if any.

If Japan want to see its economy grow again, its needs to find a more balanced economy which not only favors the large companies but the small and mid-size companies too.

Germany has been able to find the right mix of small and mid-size companies and they all exist together as the large and the small are the in value. 

Japan needs to find that same mix values small companies just as much as large companies at this time is screwed toward the large companies only.

As a result, at this time, Japan has an economy of haves, the large name-brand companies and the have nots, the small and midi-size companies, which don't have the same resources as the large companies do.

Have a nice day!

Spending on Food on In Japan: Updated Sept. 15, 2025.

Proportion of spending on food hits record high in 80% of Japan cities

Article source: https://mainichi.jp/english/articles/20250902/p2g/00m/0bu/013000c

Ideas

Its not a surprise the food prices have increased in Japan, as inflation has increased almost every year since the pandemic.

What is interesting is, while there have been attempts to lower inflation nothing has really worked as prices are maybe at their highest ever in Japan.

Usually, such as in the US and the EU and other countries the central bank would increase the key rate as an incentive to get people to spend less and borrow less.

But in Japan the Bank of Japan never increased the key rate as they kept insisting that the Japanese economy was just too weak for a rate increase.

Japan, for the most part, for the last 20 years or so was driven by deflation so prices were lower than maybe they should have been in an economy the size of Japan, and when inflation did start to increase a lot Japanese consumers didn't know what to do.

The Engel coefficient is more like an average as yes, families are spending more on food but again it depends on each family.

Its been shown that low-income families and fixed income groups spend more on food than higher-income groups, which is logical as low-income group have less money to spend and use a larger share of their income on food.

All the coefficient is showing is the cost of food in a city and or the level of income in a city compared to other cities in Japan.

It might also indicate how much food prices have increased from city to city as maybe some cities or companies in those cities passed on their raw material costs more compared to other cities.

Also its important to think about the level of income of each city as some cities have more income and the also they type of worker in a city as wages and salaries might be much different in each city.

Japan, for a long time, had this stereotype of being this rich country but if you looked under the surface its been known not to be one of the richest countries in the world and has some of the lowest salaries for large company employees.

And then there is the idea of part-time workers and the minimum wage which again Japan might have some of the lowest minimum wage rates in the world too.

Unfortunately, many part-time workers in Japan, these days are women with families and children who need to work to help support their families and some might be single family workers.

Yes, around the time of the pandemic noticeable inflation hit Japan and has continued to increase ever since then and consumers, again, were unsure what do to as before that time, deflation was in Japan, which meant lower prices on most things.

The problem in Japan was/is consumer spending, which is about 50 percent of GDP in Japan was/is always a challenge and which means it never reached it full potential.

As a result, while other countries which experienced inflation also had increased consumer spending too, but Japan was the opposite as its consumers never spent like they did in the US which meant the Bank of Japan really couldn't use the key rate to reduce spending as it was always very low.

Again, each city in Japan is different as for example Osaka, which is Japan's second largest city or metro area, might not be that affluent as its coefficient was 31.2 which means that workers in Osaka might not have a much money as some other workers in other cities.

It also might mean Osaka has more workers who work for small and mid-size companies compared to large companies like in the Tokyo metro area.

And then there is the continued problem with rice prices as rice is a major food staple in Japan but has had problems ever since the summer of 2024 when there was a supposed rice shortage and prices have yet to decrease going on over one year.

Japan back in the 1960's had sustained inflation which at the time was due to the Japanese economy mostly overheating as it was growing very fast, maybe too fast, and prices were just too high at that time.

And at that time Japan was still coming out of the WW11 period and growth was increasing but not all of Japan had reached the level of a emerging country just yet as it took another decade for all of Japan to reach that level and then again, exploded into a major economy in the 1980's and it was thought of at that time it would over take the US and its economy, which of course it never happened. as some today say Japan back in the 1960 to 1980 period grew too fast and didn't really build as solid growth foundation for the future as might evidenced today.

Have a nice day!

Japan July Industrial Output: Updated Sept. 9, 2025.

Japan's July industrial output falls 1.6% on month

Article source:  https://mainichi.jp/english/articles/20250829/p2g/00m/0bu/018000c

Ideas

Japan thinks it's still a major manufacturing country and maybe it still is but manufacturing  can't sustain Japan's economic growth as the exporting of cars are not like it used to be and with the US tariff situation its going to be much different.

The future trend for industrial output in Japan is going to be less and less because of the tariff situation and not just with cars but with the thousands of small Japanese companies that make car parts potentially could be much less in the future due to less demand and the tariff situation.

Japan has been riding the export bandwagon for a long time without really creating any new economic drivers for the Japanese economy. 

But its seems Japan has run out of time and now needs desperately to find some new economic drivers to help the economy grow again, as its can't rely on  exporting for that much longer to be its sole economic force.

The Japanese domestic economy just doesn't seem that strong to be an real economic driver or there isn't anything in the domestic economy to improve economic growth that much.

Some might say or think that foreign tourism, which is at record levels might help or be like an economic driver but so far its not enough to really make a difference.

An economy is a complex organism made up of many sectors and those sectors usually never grow at the same time or even decrease at the same time, but Japan needs some sectors that can be sustainable and right now it doesn't have many.

It also, at the moment, depend on exporting to the US to help its economy and the tariff situation potentially could reduce demand for Japanese cars and Japanese car parts significantly in the future.

Again, it seems Japan is only focused on manufacturing as as source of economic growth but its needs new sectors to grow the Japanese economy and its doesn't look like Japan has anything new to show to help grow its economy.

If Japan can't find or create any new economic drivers to help grow the economy its going to be stuck in that same rut of only relying on manufacturing which is good sometimes but often times its not so good and its not going to get any better in the future.

Again, Japan has relied on industrial shipments for far too long and desperately needs to find some new growth engines which it hasn't been able to do yet. 

It seems Japan is stuck back in the 20th century and only focused on manufacturing and hasn't moved into the 21st century of technology leading an economy just yet.

Yes it might be using robots or robotic equipment in manufacturing but the rest of the economy seems stuck as the Japanese economy seems to be stuck in some time warp and hasn't moved forward like other advanced economies have.

Innovation seems seem to be lacking in much of the Japanese economy as companies seem a little resistant to innovate and become 21st century companies of the future.

Have a nice day!

Japan Jobless Rate: Updated Aug. 1, 2025.

Japan's July jobless rate falls to 5-year low at 2.3%

Article source:    https://mainichi.jp/english/articles/20250829/p2g/00m/0bu/016000c

Ideas 

As some Japanese companies begin to increase wages more would-be workers are going back to work, re-entering the workforce, and many even changing jobs

For a long time many workers in Japan didn't change jobs as they just stayed with the same job as changing jobs was either shunned or not easy to do in Japan for a very long time.

But times have changed in Japan and the workforce in Japan is no longer worried about what people think and if they have a chance or need to they try to change jobs like another other place now.

Japan has always had one of the lowest unemployment rates among advanced economies as there were always plenty of jobs for those who needed to work or wanted to work.

But ever since 2008, and the global financial crisis, more jobs related to contract work, part-time work, and less than full-time salary type jobs have been offered with less and less of the type of jobs needed to grow the Japanese economy.

The Japanese economy has become an economy of have's and have nots with good full-time jobs at major Japanese companies at about 30 percent of the workforce and then the have nots about 70 percent of the work force being employed by small and midsize companies along with those with contract work or part-time work.

If 680,000 people left their current job to find a new job it might be an indication finding a new job in Japan is now not as hard as it used to be.

But then again, the opposite might be true as finding a job is a full-time endeavor as job seekers need a lot of time to find and new job and having a job might prevent them for actually seeking a new job.

At the same time 1.64 million without jobs seems like a lot of people without jobs as some might not want to work, some might be looking for work but can't find the right job for them and or there might be other reasons they are not working such as illness or other factors.

For a long time it was almost unheard of that that workers in Japan were dismissed but the article doesn't indicate what the workers were dismissed for such companies re-structuring, companies having to reduce their workforce and or the normal business actions related to workers being dismissed.

For those new people seeking jobs it could be university graduates who still don't have a job, it could be young married women who need to work to help their family with paying the bills and or any number of new workers trying to enter the workforce in Japan.

The fact that there were 122 jobs available for every 100 job seekers needs to be taken with a grain of salt, meaning not all of the 122 jobs are good Japanese name-brand large company jobs as some jobs might be jobs that pay less and unfortunately small and mid-size company jobs don't pay the same as large company jobs.

Even though there were 9.8 percent more jobs in the education sector, just what kind of jobs were being offered. Were they jobs at after-school academies that offer lessons for those in middle school and high school. Were the jobs in academies related to teaching English or other subjects?

The information and technology sector should see a lot of growth in the future with more companies trying to innovate and upgrade as needed for 21st century tech skills.

Its very possible that the hotel and restaurant industry have been hit by increased labor costs, increased raw material costs not to mention energy cost increases, and they might even had to lay-off some workers due to higher costs.

But again, the article doesn't say where the job openings decreased in Japan as foreign tourists entering Japan is at a record high which might mean hotels, at least in the major metro areas of Japan, might actually increased their workers.

As far as the wholesale and retail sector is concerned, these are service type jobs which means they usually have very thin profit margins to work with and they can't afford large increases in energy costs, wage increases, or even raw-materials costs.

Some of these companies in the hotel and restaurant sector and in the wholesale and retail sector might actually be cutting back their normal staff and not hiring new workers and moving to more automated services to save on costs.

Have a nice day!

Japan Core Consumer Prices: Updated Sept. 7, 2025.

Japan core consumer prices in July rise 3.1% on persistent food inflation

Article source: https://mainichi.jp/english/articles/20250822/p2g/00m/0bu/019000c

Ideas

Core consumer prices in Japan have been extremely high since the pandemic and haven't decrease much since then.

The pace of increase might be slowing down but most likely Japanese consumers can't see it or feel it just yet.

Not to criticize but it seems the Japanese government doesn't seem to be doing much to help the average Japanese consumer other than subsidies on energy prices lately.

For example, in the US and it the EU the US Federal Reserve increased the key rate as a way to try and reduce inflation and the central bank in the EU followed suit by also increase its key rate to try and reduce inflation in the EU.

But the Japan central banks keeps saying or has said in the past that the Japanese economy might be too weak to increase the key rate as there are could be some significant side affects from the rate increase.

Most central banks like to keep inflation around 2 percent, like the Bank of Japan is hoping for, as they feel its a manageable level and also shows there is enough economic activity moving through an economy.

In recent years, many Japanese companies were reluctant to increase prices for fear or either losing customer or alienating too many customers so they often would absorb any prices increase related to energy, or raw materials costs.

But those days seems long gone as company after company are pass-on their increased costs to the next in the supply chain including the final retail customer.

Rice seem to be in a category all by itself as the normal supply and demand actions don't seem to apply to what has been happening to rice prices since the summer of 2024.

Japan is resource-poor country which means is has to import much of what it needs including gas and oil and if global market prices are too high and or the yen is weak import prices to Japan can be very high.

Rice, again, is a major food staple for the Japanese economy and ever since the summer of 2024 the price of rice hasn't seem to follow the normal actions of supply and demand as there seems to be some other actions that are controlling the price of rice in a country that considers rice a very important part of its food supply.

It could be mismanagement, it could be neglect, it could be cartel type actions but so far none of these actions have been given for the continuous high price of rice.

Most likely as the summer moves on most new air conditioners were probably bought in March or April which means that there weren't as many AC's bought later in the summer months, and as the summer moves close to the fall season most likely retail places are reducing prices to clear out the last inventory of AC's for the year.

Service type companies usually have very thin profits margins so if a company had wage increases for their workers they would have passed-on their costs to the next in the supply chain including the final retail customer.

The Bank of Japan, like most central banks are very conservative so they will take their time to see on what to do about curbing rising prices and what the affect of the US tariffs are going to have on the Japanese economy.

As far as the April-June period and the GDP the Japanese economy just doesn't grow that fast as its in a mature phase now for an economy and economic growth doesn't really happen that fast with mature economies unless there some kind of action that might spur some growth which just hasn't happened in Japan for a very long time.

For example the only real economic driver, lately, for the Japanese economy is exports but Japanese exports are going to be less than normal due to the US tariff situation which could reduce exports, maybe not significantly but enough to have an affect on the Japanese economy.

Unfortunately Japan just doesn't have any other economic drivers as its domestic economy just doesn't have to fuel needed to improve economic growth.

Some might say the record surge of foreign tourists into Japan might be the next economic driver for the Japanese economy, but so far, while very good. it hasn't really improved the economy that much yet, as Japan just doesn't see the amount of tourists that countries like Spain and France have at this time.

Have a nice day!

Japan US Exports: Updated Aug. 5, 2025.

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

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

Ideas

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Have a nice day!

Japan Bankruptcies: Updated Aug. 25, 2025.

Japan bankruptcies in July hit highest for month in 2025

Article source: https://mainichi.jp/english/articles/20250808/p2g/00m/0bu/048000c

Ideas

Bankruptcies are never a good thing as people and their families are always affected. However, in economic terms it might be a leveling out of some of the markets where might be too many companies for the market. That still doesn't take away all of the pain and suffering  of a bankruptcy. 

Any time in a market which has a lot companies due to growth in the market and more companies enter the market eventually the market might become saturated with too many companies and some companies begin to see decreased sales and profits.

With that said, increased prices are not good thing and maybe the Japanese government could have found ways to help some of the companies stay in business if possible.

But then again, some might think too much interference in the governments interfering in the mechanisms of the market it being too much.

Debt involving 10 million yen or $68,000 doesn't seem like that much for a company but we don't know the exact circumstances of each case.

Perhaps the banks related to the companies were not able or unwilling to extend anymore credit and or suppliers were unable or unwilling to give them more materials as needed to stay in business.

As Japan is in a labor shortage perhaps some companies just couldn't afford to pay the wages needed to get some workers as they knew they could get better wage at other companies.

For many years many Japanese companies absorbed the increase in energy and materials costs but over time they came to a breaking point and had to eventually pass-on the higher costs to the consumer.

But some companies even after passing-on their costs their costs continued to increase and then the  labor shortage hit in Japan and they had to start paying higher wages to keep good workers and that became even more of a problem for some companies.

And yes, there could be even more bankruptcies and more and more companies are unable handle both increased costs and increase labor challenges.

Some of these companies might be considered zombie companies or the walking-dead companies that are barely existing and some might think the government might just be letting them die off but that is never the case in Japan.

Both the retail sector and the service sector have very thin profit margins and maybe they just can't handle the increased in energy and materials costs along with not being able hire more workers and their profits margins just can't handle any more costs as their profits just keep decreasing.

Again, its quite possible, and it usually is, where a market becomes very popular and more companies enter the market, such as the restaurant and food service market and then eventually there are too many in that market and some restaurants begin to see a decrease in sales and eventually a decrease in profits and then some of the companies in that market have to exit the market.

And its the same with retail stores too where too many retail stores enter the market and then there are too many and the same thing happens and the market adjusts itself by profits decreasing with some retail places and some exit the market and then the market eventually gets back to some kind of equilibrium. 

Have a nice day!