Japan Economy Sentiment:

 https://mainichi.jp/english/articles/20201208/p2g/00m/0bu/122000c

Japan economy watcher sentiment worsens for 1st time since April

Article:

TOKYO (Kyodo) -- Business confidence among workers with jobs sensitive to economic trends worsened for the first time in seven months, affected by a resurgence in the number of coronavirus infections, government data showed Tuesday.

The diffusion index of sentiment among "economy watchers" such as taxi drivers and restaurant staff came to 45.6, down 8.9 points from October, according to a survey by the Cabinet Office.

The office downgraded its assessment also for the first time since April, saying that "the economy has shown some weakness in its recovery" as the impact of the pandemic remains severe.

Ideas:

Economy watchers of course are most likely all in service type business that are heavily dependent on consumers. As such their business, or those working in service businesses are always sensitive to what is going on in the economy, as a downturn in consumer sentiment or even business sentiment can have a direct affect on their jobs or companies.

As has been written in other posts, an economy never grows or even decrease at the same rate in all areas. An economy is very complex meaning there are always some positives and always some negatives in a market economy.

Of course now with the pandemic there are going to be more negatives than positives.

In this case regarding a recovery, or an implied recovery all industries, sectors, or business don't recover at the same rate. Some are going to recover faster than others and unfortunately some might take a long time to get back to pre-pandemic levels.

Article:

In the previous month, it said the economy is "steadily rebounding" although difficulties remain due to the global health crisis.

The diffusion index of November compared with a rise of 5.2 points in October, when it first topped the boom-or-bust line of 50 in nearly three years as Japan was gradually recovering from the fallout of the pandemic.

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

A government official, who briefed reporters on the latest results, said concerns grew due to the new wave of infections ahead of the year-end and New Year season.

Ideas:

The diffusion index for October inferred that there were more indicators trending upward compared to downward. 

So even in early November the indicators were showing a general trend of a "recovering economy. 

But of course economic conditions and the virus situation began to change quickly.

One of the biggest problems for "economy watchers" and all service type businesses is the news cycle and the 24/7 news about the virus situation. Citizens/consumers are deluged with news every hour of the day and as such become more and more pessimistic, worrisome, and pessimistic and as such begin to re-think the need to go out and frequent places that they used to before the pandemic situation.

Article:

An upscale-restaurant worker was quoted as saying there were fewer customers due to the resurgence and an increasing number of reservations for year-end parties have also been canceled.

Looking forward, the economy watchers remain worried about the spread of the virus, with the diffusion index gauging business sentiment in the coming months falling to 36.5, down 12.6 points from the previous month.

A worker in the service industry said the virus spike has heightened worries the economy may be hit again as authorities could ask more people to refrain from nonessential outings.

The office polled 2,050 workers from Nov. 25 to 30, of whom 1,834, or 89.5 percent, responded.

Ideas:

No doubt again as the virus situation picks up and there is more and more news about it, good that consumers are being kept up to date but not so good as consumers begin to become more and more worrisome about what is going on.

Which of course translates into less activity related to service type companies.

And as this post is being written, the Japanese government has not implemented emergency measures for the Tokyo area.

While the measures are no doubt needed but service businesses most likely are going feel the affect of they measures with having to either close earlier and or less customers because of the new emergency measures and or fear of the pandemic.

Just yesterday Jan. 9 2021 watching the Shibuya crossing on You Tube there again like last spring less people out and about compared to the summer, fall, or even a few weeks ago.

Japan Oct. household spending up 1.9% after 2019 tax hike:

 https://mainichi.jp/english/articles/20201208/p2g/00m/0bu/056000c

Japan Oct. household spending up 1.9% after 2019 tax hike

Article:

TOKYO (Kyodo) -- Japan's household spending in October rose 1.9 percent from a year earlier for the first increase in 13 months, as consumption rebounded from a fall triggered by a tax hike last year and was also supported by a domestic travel subsidy program, government data showed Tuesday.

Average spending by households with two or more people in real terms was 283,508 yen ($2,700), according to the Ministry of Internal Affairs and Communications.

A ministry official said outlays for durable goods such as television sets, personal computers and refrigerators rebounded sharply after the consumption tax increase from 8 percent to 10 percent on Oct. 1 last year dented demand for such goods.

Ideas:

Consumers, either because of need or because of getting used to a higher price related to the tax, always start to spend again as is seen. 

Sometimes it takes a while for consumers to come to idea that the new price is not going down and or I need this product and there is no other choice.

Of course the travel subsidy might helped some, as an incentive to spend again.

I was in Japan a year ago last September and it felt like a spending frenzy as there were sales, promotion, and a lot of campaigns to get consumers to spend before the October 1 tax increase.

All three items; computer, refrigerators, and television sets could all be related to the virus situation as they are all used in the home.

Refrigerators for storing more food as families don't go out to eat as much. Television sets of course as families/individuals stay home more, and of course computers for working at home and or online classes.

Article:

Spending on furniture and household appliances rose 39.7 percent from the previous year, while health care expenditures climbed 15.9 percent as people bought more face masks to prevent the spread of the novel coronavirus and received their flu shots earlier than usual.

The government's "Go To Travel" subsidy program launched in late July to boost the virus-hit domestic tourism sector and "Go To Eat" campaign introduced in October to encourage dining out are also believed to have contributed to the improvement, he said.

The latest figures indicate consumption "is getting closer to pre-coronavirus levels," the official added.

Ideas:

Again household appliances and furniture might have been related to families spending more time at home and or as the tax increase was in October they finally got used to the higher prices related to the tax increase and decided to buy what they've needed for a while.

Of course the virus situation might have increased health care spending on items such as masks and flu shot.

Not to forget last spring there were shortages on some products as consumers were in a spending spree for items such paper towels, tissue paper, and other household daily need products, not to forget masks.

The idea to encourage consumers to go back to restaurants might have been a logical idea at the time, but could it have increased the virus spread in November and December.

Consumer spending might have gotten close to pre-virus levels at the time, but the increase in late November and December might actually decrease consumer spending again.

Article:

Despite signs the world's third largest economy was gradually emerging from the fallout caused by the initial wave of virus infections, a recent resurgence of new cases from November has clouded the outlook.

"As the impact of the coronavirus persists, we will continue to watch developments carefully," the official said.

Virus infections in Japan had somewhat subsided in the reporting month but November saw an expansion of the pandemic with daily new cases topping 2,500 later in the month, increasing concern over the strain on health care systems.

Ideas:

As news about an new increase in the virus situation hits the news cycle everyday it can only decrease consumer feeling or confidence which will eventually decrease consumer spending again.

And as this post is written later than the date published there are now new emergency measures in place that might decrease consumer spending even more.

As I check the YouTube channel of the Shibuya crossing there seems to be less people out and about, at least around the Shibuya crossing area.

Article:

Among other components, spending on transportation and communications slipped 3.0 percent, as people continued to refrain from using airlines and railways.

The average monthly income of salaried households with at least two people rose a real 2.5 percent to 546,786 yen, up for the 10th month in a row.

Household spending is a key gauge of private consumption and accounts for over half of Japan's gross domestic product, which grew an annualized real 22.9 percent in the July-September period from the previous quarter.

Ideas:

Because of the virus situation possibly more people are working from home and not traveling, by train/subway to their company offices as much.

And the same with domestic travel on airlines. Possibly instead of traveling by airline to Sapporo, Osaka, Fukuoka etc. business people are not using Zoom etc. for business meetings.

The increase in household income is always a good thing, as in most cases, some of the increase will be save and some will be used to spend in the economy.

For many years the Bank of Japan had been encouraging companies to increase the salaries of their employees, as companies had been sitting on a lot of extra money since the 2008 global financial crisis.

The fact that consumer spending is over half of the Japan's GPD indicates it is an important factor in the country's economic growth and can't be ignored.

As such the Bank of Japan, and for good reason, is always focused on consumer spending to increase the inflation rate in the economy.

Consumer spending for the size of the Japanese economy most likely is not at fullest potential level.

And there might be some good reasons. First is the idea that a larger part of the Japanese population is now 65+ in age. Those in that age group tend to spend less. 

Those in the 20-65 age groups are actually spending as much or more than those in other OECD countries. 

But because the 65+ age group is getting larger every year in Japan, it might indicated consumer spending in Japan could decrease every year unless the other age groups spend more.

As a result BOJ is always concerned about consumer spending decreasing.

The BOJ has focused on trying to get inflation to 2.0 percent but has failed to do so since about 2014 when it began a campaign strategy to get it to 2.0 percent.

A 2.0 percent inflation level might indicate a balanced and good level of economic activity in the economy. 

An economy always needs a good level of economic activity to grow.

Inflation might be an indication of rising producer prices being "passed on" to consumers and or an increase in demand and spending in an economy.

Whenever there is an increase in demand in a market economy, in most cases, companies will raise prices as more and more consumers want to buy their products.

Japan Economy News:

 https://mainichi.jp/english/articles/20201208/p2g/00m/0bu/046000c

Japan's July-Sept. GDP growth upgraded to 22.9% as economy restarts

Article:

TOKYO (Kyodo) -- Japan's economy in the July-September period grew an annualized real 22.9 percent from the previous quarter, the government said Tuesday, upgrading the preliminary figure of 21.4 percent as the restart of economic activity following the coronavirus pandemic helped support consumption and investment.

The stronger-than-expected figure marked the fastest growth since comparable data became available in the April-June quarter of 1980, also affected by regular changes in the calculation method, according to the Cabinet Office.

Private-sector analysts had forecast that the preliminary data would remain almost unchanged.

Ideas:

The idea of 22.9 percent growth is good but it doesn't indicate the real story of the economy. Even in regular market economy, in normal times, GDP growth never shows the real story.

In a normal/regular market economy there are always positives and negatives even when there is positive economic growth, as some companies and industries are doing better than other companies and industries.

I don't like the use the words winners and losers but in a normal economy there those doing better than others.

So the idea of 22.9 percent growth sounds good, it doesn't tell the real story as the GDP doesn't show who is doing well and those who are not. It can only show the aggregate of the entire economy and not the overall positives and negatives in the economy.

Article:

Real GDP, the total value of goods and services produced in the country adjusted for inflation, rose for the first time in four quarters. The latest figure corresponds to a 5.3 percent expansion on a quarterly basis.

Private consumption, which accounts for more than half of Japan's GDP, soared 5.1 percent, revised upward from the 4.7 percent drop in the preliminary report released Nov. 16.

Capital expenditure dropped 2.4 percent, a tamer decrease than the earlier reported 3.4 percent fall.

Private housing investment was upgraded to a 5.8 percent decrease from a 7.9 percent drop, with an official citing the change in GDP calculation method, which comes about every five years.

Ideas:

Now we can see what different sectors are doing; These numbers/stats are not surprising considering how much the economy decreased the 2nd quarter.

But again while we can see some areas again we can't see all areas.

While consumer spending increase, which is good, again it never show exactly what the real number is. Not to be negative etc. but just thinking how much would consumer spending have increased if all consumers were OK. But we know there are many small businesses and consumers who were not OK in the 2nd and even 3rd quarter.

But any increase is very good. 

With capital spending we see businesses most likely were taking a wait and see approach and only spending/investing on old or outdated equipment, buildings etc. and not spending/investing on new equipment and projects.

Private housing investments like business investment most likely is a sign those who wanted to buy a new home were also taking and wait and see approach and also most likely worried about their jobs and the future and putting off buying a new home at this time.

Article:

GDP now reflects more accurately the value added by such activities as house renovations and vacation rentals, as well as the creation of films, books and music, according to the government.

The change also affected GDP figures in preceding years. For fiscal 2019, which ended in March, the economy shrank 0.3 percent, marking the first negative growth in five years on the consumption tax hike in October last year as well as fallouts from the U.S.-China trade conflict.

The government earlier said the economy slightly expanded last fiscal year.

Tuesday's data also showed that exports of goods and services leaped 7.0 percent in the July-September period, unchanged from the initial report. Imports fell 8.8 percent, upwardly revised from a 9.8 percent decrease.

Ideas:

GDP data and what is used in the calculation is always being re-tooled as different technologies and new kinds of products are being created and at the same time, always being re-tooled to provide a more accurate picture of an economy.

The idea that the economy expanded the previous year is an example of date always being revised and new data appears and again new ways of calculating the data.

Export growth of course was good, as consumers and businesses globally got back to the idea of spending as the 2nd quarter everyone was in period of shock as too what was going on related to the virus situation.

The idea of imports decreasing can be attributed to less consumer spending and or logistics challenges related to shipping imports to Japan, due to the virus situation disrupting all the logistics, shipping, and airline businesses.

Article:

"Some latest basic statistics showed that private consumption in September, especially in the entertainment and service industries, had better performances than expected, which affected the revision positively," the government official told reporters.

On prospects, analysts remain cautious amid the recent resurgence of coronavirus infections in Japan and abroad.

Atsushi Takeda, chief economist of the Itochu Research Institute, said the economy will level off in the current quarter and may shrink in the January-March period.

Ideas:

Perhaps in September, as in many places globally consumers were beginning to think that the virus situation was subsiding, and as such began to venture out to places they had shunned in the 2nd and somewhat in the 3rd quarters.

But at the same time there were the beginning signs of a new surge in the virus situation. And or consumers were just tired of waiting and wanted to get back to their normal activities even more so on September.

The idea of economy leveling off of course means it has regained some momentum but might not be able to grow in the 4th quarter like it did in the 3rd quarter at 22.9 percent.

The economy shrinking in the 1st quarter of 2021 is now is very realistic as this week, the first week in January, the Japanese government just introduced emergency measures which could reduce economic growth.

Article:

"Consumption has been stagnant since late November due to the spread of infections, and I believe it is in a downturn in December," he said.

The economy rebounded from the initial impact of the coronavirus pandemic, which forced Japan to declare a state of emergency in April and caused it to shrink an annualized 29.2 percent in the April-June period, possibly the worst contraction on record since 1955, the earliest point at which the government can track reference values.

The declaration was fully lifted in May.

Ideas:

Yes consumer spending most likely is back to being stagnant or not growing as before. Consumers become cautious when they see and hear all the negative news about the increase in the virus situation and also the continued worry about their jobs and the future.

With the new emergency measures announced on Jan. 8, consumer spending might continue to be stagnant, no growth, and actually begin to decrease like the 2nd quarter of 2020

Of course the Japanese government needs to step in again with even more stimulus packages and help those businesses and families are that are going to be hit even more by the emergency measures as business closer earlier and as consumer again decide not to go out and spend.

Article:

Japan's annualized real GDP totaled 527.14 trillion yen ($5 trillion), recovering from the previous quarter's 500.63 trillion yen but well below 545.72 trillion yen marked in the January-March period when fallouts from the pandemic had yet to materialize.

Nominal GDP, not adjusted for inflation, grew an annualized 23.9 percent, upgraded from a 22.7 percent expansion.

Ideas:

As usual we need to see things in the proper context. The Japanese economy is the 3rd largest economy in the world. Yes there was a large decrease from 545 trillion yen to 500 and even 527 trillion yen. 

But at the same time, both the 500 and 527 trillion yen is still relatively speaking a lot of economic/business activity. 

But we need to temper that with the idea, the drop in economic activity means there might have been a lot of lost economic activity that affected a lot of lives and a lot of businesses especially in the services and tourism industries.

So yes, we can say 500 and 527 trillion yen is a substantial amount of economic activity but at the same time there was a lot of lost economic activity and or the Japanese economy didn't operate at its true potential because of the virus situation.

But the bottom line is always people and businesses where people work. A loss of 45 trillion yen or 18 trillion yen is still huge because of the affect it might have had on businesses. workers, and families.

Have a nice day and be safe!

New Japan Stimulus:

 https://mainichi.jp/english/articles/20201207/p2g/00m/0na/113000c

Japan to compile $700 billion new stimulus package to fight pandemic

Article:

TOKYO (Kyodo) -- The Japanese government's additional stimulus package will be worth 73 trillion yen ($700 billion), government sources said Monday, as the country continues to grapple with the economic fallout from the novel coronavirus pandemic.

Fiscal spending to implement the package, which the Cabinet is expected to approve on Tuesday, will total about 30 trillion yen to be financed by the government's third supplementary budget for the 2020 fiscal year through March and the initial budget for fiscal 2021, according to the sources.

The package will include 5.9 trillion yen for measures related to curbing the spread of the coronavirus, the sources said.

Ideas:

Its very possible there might be the need for a few more stimulus packages in the future. As the virus situation continues the government needs to add as many stimulus packages as needed and not worry too much about the national debt at this time.

Provide as many new packages as possible to help all the businesses and families that have been hit by the virus situation.

And of course as much as needed to curb the virus situation. 

Article:

Prime Minister Yoshihide Suga told a press conference last week that the stimulus will include the extension of subsidy programs aimed at promoting domestic travel and helping companies maintain employment to underpin the virus-hit economy.

The first policy package under the administration of Suga, who assumed office in September, comes as Japan has seen a resurgence of coronavirus infections, with new cases topping 2,500 in late November, increasing concern over the strain on medical systems.

As part of the stimulus package, Suga has also pledged to establish a 2 trillion yen fund for firms working on the development of green technologies, as the country seeks to achieve carbon neutrality by 2050 and spur economic growth.

Ideas:

The idea of promoting domestic travel may sound like a good way to help the economy but with the surge in the virus, there might not be that many tourist related travelers willing to travel. Most likely just business travelers only willing and able to travel, if they aren't using Zoom for meetings etc. 

And any kind of package is going to help but again the Japanese government needs to continue to help those in need especially those business that are on the verge of going under now and in the future.

This is not the time to "let the market decide" like in a regular economy, this is not a regular economy situation. This is the time for government to step in a help over and over as needed.

Article:

The prime minister has also said the government will spend 1.5 trillion yen on subsidies for prefectures and municipalities to financially support restaurants that are forced to cut operating hours.

More than 1 trillion yen will be allocated for expenses related to digitalization, including for research and development of post-5G wireless communications technologies to support cellular data networks, according to Suga.

So far in the current fiscal year, parliament has already passed two extra budgets totaling 57.60 trillion yen to finance economic stimulus steps amid the pandemic.

Ideas:

And also help all of the other service type companies that are suffering now because of the virus situation. Airlines, hotels, restaurants, tourist type service businesses and any other service companies as needed to keep them to survive this situation.

Also a very good idea to bring the Japanese economy more into the 21st century and also help as many companies to move into digitalization and not continue to be rooted in 20th century business practices.

Of course not every small business is going to be able to digitalize and more into 5G technologies and some businesses are not focused on that those type of activities.

And again the more stimulus packages as needed to get through the virus situation.

Have a nice day and be safe!

Japan Economic News:

 https://mainichi.jp/english/articles/20201207/p2g/00m/0bu/083000c

Japan Oct. key economic index up for 5th month in row, pace quickens

Article:

TOKYO (Kyodo) -- A key index reflecting the current state of the Japanese economy rose at a faster pace in October, climbing for the fifth straight month in yet another sign that the economy is emerging from the initial hit of the coronavirus pandemic, government data showed Monday.

The Cabinet Office's preliminary data for the coincident index of business conditions in the reporting month rose 4.9 points from the previous month to 89.7 against the 2015 base of 100, marking the second-largest increase since comparable figures became available in January 1985. It was up 6.0 points in July.

The improvement was helped by strong year-on-year growth of sales and shipments of cars and home appliances, partially reflecting a consumption tax hike in Oct. 1 last year, a government official told reporters. The reading climbed 1.4 points in August and 2.4 points in September.

Ideas and Analysis:

Any economic news that appears positive is always good. But at the same time we always need to be aware of the big picture and not just what one index might illustrate. Its very good that cars and home appliances are showing signs of growth but its only a small part of the 3rd largest economy in the world.

A coincident index is a measurement that looks at several important variables in an economy that usually move together either positively or negatively, or no changes.

Its easy to see why there was a 6.0 point in increase in July when the economy was almost at a standstill  in the spring. So any change of increased economic or business activity would have helped to push the index in the positive range.

Last year in October, when the sales tax increased from 8 percent to 10 percent, consumer spending was of course down as consumer were still trying to figure out just how much the extra 2 percent would affect their lives.

And for Japanese businesses, even though the Japanese government had put into affect different rates of the sales tax for different services and products, such on cars and no increase in the sales tax, they have to find way to be innovative and creative to offset weary consumers who were adjusting to the increase in the sales tax.

Article:

Although the index remained below the reading of 94.5 logged in February, it topped 89.3 in March when the economy had yet to see the impact of the government's state of emergency declaration over the pandemic in April.

The index has continued to improve since it dropped to 71.7 in May. The state of emergency declaration was fully lifted late that month.

The May figure was the worst since 71.1 logged in April 2009 in the aftermath of the global financial crisis.

The office maintained its assessment that the economy is "bottoming out" after an upward revision in August from the view that the economy was "worsening," the most pessimistic of its five assessment levels.

The leading index of business conditions, forecasting the situation in the coming months, also rose 0.5 point to 93.8 in the reporting month, up for the fifth consecutive month.

Ideas and Analysis:

The idea that the Japanese economy is "bottoming out" is a positive way to say that things maybe are not so good but we have reached the bottom and now the economy will be headed back in the right direction.

Governments like to use phrases that try to show something positive or signal something positive and not be dark and pessimistic about the true state of things. 

But the to be fair and honest after the May figure hit 71.1 its only natural for any government or organization to see improvements as more economic and business activity began to improve in the summer months and into the fall despite the fall beginning to large increases in the virus infections.

It has now been somewhat concluded, while the "Go To" campaign was a idea to try and get the economy somewhat moving again, it might have actually made things worse.

Even thought the Japanese government, including Tokyo, are implementing measures to reduce some economic activity with suggestions for some places to close early, the Japanese economy is in a catch 22 situation, as is many economies and businesses globally.

How much economic and business activity can be closed down or reduced without affecting the lives of workers in those businesses?

And will be the new measures actually reduce increase in the virus remains to be seen.

Japan Prices: Classic Example of Supply and Demand Challenges:

 https://the-japan-news.com/news/article/0006978131 

Veggie prices plunge in Japan as restaurant industry slumps amid pandemic

Article:

Vegetable prices have dropped significantly, making consumers happy but vexing farmers and retailers.

The price falls are attributable to favorable weather conditions leading to good harvests and a slump in the restaurant industry amid the novel coronavirus pandemic.

At the beginning of December, lettuce was selling for ¥58 per head and Chinese cabbage was going for ¥138 a head at Shinjuku Yaoya fruit and vegetable shop in Shinjuku Ward, Tokyo. Both prices are more than 40% lower than normal rates.

“The vegetables I buy on a daily basis have gotten cheaper,” a homemaker in her 60s said. “It helps.”

However, vegetable sales are sluggish. Due to the spread of the coronavirus, sales to restaurants and other businesses, which account for 10% to 20% of total sales, have stagnated while households have become more frugal.

Ideas and Analysis:

This is a classic example of supply and demand. Its not just an economics idea but a very common situation in business. 

An economy is very complex as are different kinds of markets within an economy. While one part of a market, such as consumer buying of vegetables might be good for consumers, but not so good for restaurants who buy fruit and vegetables because less people are going to restaurants.

Whenever there is a surplus due to favorable or good weather there is usually more products than maybe the market can handle or sell. As such producers want to get something so they lower their prices to try and sell as much as they can.

The opposite of course is true if there was a not so a good growing season and there is a shortage of products. So in this case producers will increase their prices in order to try and maintain an certain amount of profit they might have received in a normal year of production.

Of course consumers for the most part always want lower prices and producers always want higher prices. So that is the struggle that always takes place in a market economy. 

Consumers of course don't always get what they want and producers of course don't always get what they want. So a market, in many cases, is always in compromise between what the consumer wants and the producer wants. 

The virus situation of course has exaggerated normal market situations. 

Consumers, because of fear of job losses and income challenges, have become even more frugal than usual. Consumers of course are always looking for sales or bargains but now more than ever.

And then add in the challenges related to restaurants which then exaggerates the agriculture market even more.

If you then add in a surplus growing season the challenges for producers become even more difficult.  

Article:

“No matter how much we discount them, vegetables aren’t selling well,” said Hidetoshi Aramaki, senior managing director of Shinjuku Yaoya’s operator.

Leafy greens, in particular, do not last long. Stores are forced to sell them at a discount all at once if there is excessive stock. On Wednesday, Shinjuku Yaoya even gave away about 500 heads of lettuce for free.

The wholesale median price of lettuce fell 61% during the Nov. 20-26 period compared with the same time frame a year ago, according to Ota Market in Tokyo. Prices have fallen across the board, with a 58% decrease for Chinese cabbage, 35% for cabbage and 16% for daikon radishes.

According to an Agriculture, Forestry and Fisheries Ministry analysis, the price falls have been brought about by oversupply as no typhoons made landfall for the first time in 12 years and the food services sector has been hit by declining demand.

Ideas and Analysis:

Agriculture producers in a market economy are usually "price-takers" meaning they take the price or prices that is offered to them at auctions etc where they sell their products or in a similar cases.

If the buyers at auctions and similar market situations know there is a surplus of produce the know they can offer a price that is lower than a normal market situation and the producers have no choice but to accept it. 

In a normal market situation you might think a surplus might be a good thing meaning there is now more to sell and more potential sales and profits.

But in any situation, no matter the product; cars, clothes, of whatever is being sold usually the producers have estimated how much of a product they can sell so they only produce what they think they can sell and or produce what they can make a profit on.

Toyota and Nissan are not going to over produce but only produce what they think the market can handle. 

The same for Uniqlo and so on. They, for the most part, only produce what they think the market can handle.

Of course we know markets are not perfect and consumers/buyers can easily change their ideas and opinions on what they want to buy, and as such sometimes producers can over produce because their projections or estimates were more than the market wanted. Of course then we all the sales of products from time to time.

But the agriculture market usually is not able to as easily predict what is going to happen in a market in the future, or not as easily.

Did any producers of vegetables really know exactly what would happen related to the summer growing season or the virus situation? Most likely very few did and even if they accurate weather predictions, how many producers can adjust their harvest to really meet exact demands in the market? Probably not many.

Article:

Vegetable-producing areas have been plagued by the price falls.

“If prices get any lower, we can’t make a profit,” said an official of JA Hainan in Makinohara, Shizuoka Prefecture, an area of lettuce production. “There’s the risk that some farmers will stop farming if prices continue to drop.”

■ Meat prices on the rise

On the other hand, prices for domestically produced chicken and pork are likely to remain high. According to the agriculture ministry, the wholesale price of chicken thigh was ¥654 per kilogram in Tokyo in November, about 12% higher than in the same month last year. The wholesale pork price was 16% higher at ¥531.

Poultry is a relatively differentiated item, with domestic products for home use and imports for business use. Decreased demand from the food services sector is unlikely to push down the price of domestic meat products.

In addition, poultry is usually frozen in summertime when demand drops, in order to stock up for use in the winter. This year, however, poultry sales for home use have been upbeat even in the summer as more consumers did their own cooking amid the pandemic. Already low inventories are believed to be a factor in prices remaining high, according to a meat wholesaler.

Japan is also experiencing a spike in cases of highly pathogenic avian influenza. The impact of the bird flu is limited for now, but there are concerns that prices could rise further if shipments are delayed.

Ideas and Analysis:

And then there there are those products that maybe are not influenced very much by changes in market conditions. 

Especially if there is not a lot of competition and especially if there is not a lot of competition from imports. So domestic products can remain high because there is not enough competition to force down prices.

In this case the consumers become "price-takers" meaning they accept the higher prices and or the seek out "substitute" products that might be at a lower price. 

But then market condition can cause an increase in demand even though prices are higher than consumers want but the accept the higher prices as a given and just buy as usual.