JAPAN Q2:

 https://mainichi.jp/english/articles/20210816/p2g/00m/0bu/012000c

Article:

TOKYO (Kyodo) -- Japan's economy in the April-June period grew a real 0.3 percent from the previous quarter, or an annualized 1.3 percent, as robust exports were overshadowed by sluggish consumption under a state of emergency over the coronavirus pandemic, government data showed Monday.

It was the country's first increase in real gross domestic product, the total value of goods and services produced in the country adjusted for inflation, in two quarters, according to the preliminary data released by the Cabinet Office.

Although the growth figure was better than the average projection of 0.7 percent annualized growth by private-sector economists, the GDP rise was too slow to make up for the January-March quarter's 3.7 percent contraction.

Ideas:

The Japanese economy has a long way to go before there will be any real sustained growth. Growth that will be consistent from quarter to quarter and not just one somewhat good quarter or economic growth and then another quarter of negative growth.

But unfortunately even before the pandemic it seemed like that was the pattern of growth of the Japanese economy.

For whatever reason, the Japanese economy has not been able to really maintain any real quarter to quarter growth for very long.

The Japanese economy seems to take one or two steps forward and then the next quarter one or two steps back. 

So no wonder the Bank of Japan can't seem to figure out how to get inflation to the two percent level when the economy doesn't grow consistently from quarter to quarter.

Article:

With Japan lagging behind other major economies in its vaccine rollout, the latest data highlighted the lack of momentum in the country's economic recovery after its worst slump on record last year caused by the pandemic.

In the same three-month period, the U.S economy grew an annualized 6.5 percent and the euro area logged an 8.3 percent expansion.

"It is vital for us to support businesses and employment while giving the highest priority to curbing the spread of virus infections," economic revitalization minister Yasutoshi Nishimura told a press conference after the GDP data release.

Ideas:

Yes, the vaccine rollout has not been where it should be, but at the same time, even as more and more people become vaccinated, the virus variants seem to be spreading. 

But even with that the more people vaccinated should help in the economic recovery, but it remains to be seen just how much it can help if the virus variants keep growing.

And with the US and its supposed 6.5 percent annualized growth, the latest jobs reports in the US was less than expected. Many are blaming the growth of the new virus variants which might be affecting supply chains and domestic demand.

Even some large related chains such as Walmart are now beginning to put limit restrictions on purchases as a way to limit shortages on some products as was the case in the Spring of 2020.

And the latest news is/was there are over 8 million people who lost their jobs during the pandemic who have not found a new job and are about to lose their unemployment benefits.

So even a 6.5 percent growth has its problems and challenges as that doesn't mean all businesses are growing or doing good.

Yes, maybe more should be done to help any Japanese business that is still having problems during the pandemic.

Even when most people get vaccinated it seems the pandemic is far from over which has the potential to limit consumer spending, maybe limit capital spending, and many other areas of economic growth.

Article:

Amid a resurgence of virus infections, the government declared a third virus emergency in late April for Tokyo and three western Japan prefectures, and later expanded it to 10 out of the country's 47 prefectures. It was lifted in late June, except for the southern island prefecture of Okinawa.

Consumer spending rose 0.8 percent from the previous quarter, the first increase in two quarters. In the January-March period, spending fell 1.0 percent as parts of the country were under the second virus emergency.

Exports rose 2.9 percent, up for the fourth consecutive quarter.

The third virus emergency weighed heavily on private consumption, with eateries serving alcohol asked to suspend their operations and dining establishments not serving liquor to close early. People were requested to stay home.

Ideas:

Its seems apparent at this point, while good intentions, the Japanese emergency measures are not exactly working.

But to be fair, even as more people become vaccinated, which of course is meant to deter or reduce the virus situation, its not working, as it seems Tokyo and the Kanto area seems to hit now with even more infections.

And as the news media presents the number of cases each day over and over, the public will continue to refrain from going out and about and as such the consumer spending, while up some, might continue to not be where it should be.

The growth of exports is always a good thing, but the Japanese economy can't rely on exports only for its growth. The Japanese economy is now just too big to rely on exports to the US, the EU, or China to sustain any real growth in the economy overall.

Article:

Affected by a global semiconductor shortage, car-related exports were not in full swing, but demand for chip-making equipment and other industrial machinery was solid on the back of strong recovery of the global economy, a government official told reporters.

Meanwhile, imports grew 5.1 percent, partly due to the government's procurement of COVID-19 vaccines.

Business investment, another key pillar of domestic demand, grew 1.7 percent, and private residential investment rose 2.1 percent, both contributing to the reporting quarter's GDP growth.

Ideas:

The challenge, again, is these areas in the Japanese economy that are showing signs of growth have to keep increasing or keep growing. But except for exports, many areas of the economy don't show sustained growth from quarter to quarter.

And the biggest challenge, as its always been, even before the pandemic is consumer spending from quarter to quarter. 

Its not so much that there isn't growth in consumer spending its that consumer spending, for many reasons, never reaches its potential.

For example maybe because of the ageing population, which tends to spend less that those below the age of 65.

It could be the number of people who only have part-time jobs, or temporary jobs, or contract only jobs and as such the don't have a lot of extra or disposable income to spend on things other than their daily needs.

And then those who do have regular jobs, maybe they haven't received much of a raise in years, and they don't feel good about their income enough to spend extra in the economy.

And then the working women in the Japanese economy who are underemployed and not working in jobs up to their skill level, and as such don't feel good about their salaries and as such are not spending a lot in the economy.

And then you add in the pandemic factors and it makes it even worse for consumer spending to reach its potential in the Japanese economy.

Article:

"Postponed capital expenditure that many firms had initially planned in fiscal 2020 (through March) apparently began emerging this fiscal year," the official said, adding that digitalization and decarbonization-related investments are on the upward trend.

Government spending increased 0.5 percent, partly underpinned by purchase of vaccines, while public investment fell 1.5 percent as costs to build infrastructure declined.

Takayuki Miyajima, a senior economist at Sony Financial Holdings Inc., said consumption was better than analysts' forecast "partly because many people are believed to have gone out more frequently and spent more, especially in June when the emergency was lifted" in most of Japan. But he added that the level of personal consumption is still low.

Ideas:

If we look at what is called Keynesian economics, supposedly whenever the private sector is not where it should be then the government will step in to help the economy, wherever needed. 

So despite some increases in some areas of the private sector maybe the Japanese government should continue to help the economy as it doesn't look like the pandemic is going to end anytime soon.

But at the same time, some might say, the Japanese economy is now beginning to show enough signs of growth, that the Japanese government doesn't need to prop up the economy any more.

That might be true in some areas, but there might be many areas of the Japanese economy that is not doing very good.

Yes, consumer spending is picking up here or there, but not enough to really help the economy grow. Real consumer spending growth might not come until all of vaccinated and then that is no guarantee as the virus variants just keep coming, which might continue to limit consumer spending.

Article:

Since mid-July, Tokyo has been under a fourth state of emergency with recent record-breaking spikes in the number of daily new infections as the highly contagious Delta virus variant takes hold.

In addition to Okinawa and Tokyo, Osaka and three prefectures near the capital have been added to virus emergency, clouding the outlook for the world's third-largest economy achieving high growth in the current July-September quarter.

Miyajima said his firm had expected the economy to grow an annualized 2.8 percent in the July-September period and 5.6 percent in the following quarter, but the projection for the current quarter will be slightly downgraded following the latest GDP data and situation of the virus spread.

Ideas:

Even if the Japanese economy reaches an annualized 2.8 percent, again that doesn't mean every company and every industry in the Japanese economy grew 2.8 percent.

An economy is very complex with many different kinds of industries and companies, and even before the pandemic, in a market economy, not sector or industries grow the same. 

That is the nature of any economy, and as such some will grow or increase a lot and some will not.

And not you add in the pandemic and lot more variables affecting the economy overall.

Whenever, whomever, gives some kind of estimate, for the most part, they are just guesses, as no one can predict 100 percent what is going to happen in the future. 

Even before the pandemic it seems many different groups would always give different estimates for what might happen as they are just trying to take a guess as to what the economic growth will be.

Even with all of the big data analysis and all of the latest modeling software no prediction or guess is 100 percent. As you are dealing with people, and people are not always consistent as to what they will do in the future.

Article:

"Anyway, there is great uncertainty," he said, indicating that the estimated figures are subject to change depending on infection situations.

In nominal terms, or unadjusted for price changes, the economy grew 0.1 percent, or an annualized 0.2 percent, in the reporting quarter.

Revised GDP data is scheduled to be released on Sept. 8.

Ideas:

Exactly! Even the person admits the supposed estimates are just guesses as there is just too much uncertainty about the future.

So even if the Japanese economy grew 0.1 percent or an annualized 0.2 percent, did every citizen in Japan feel the growth? 

Maybe yes and maybe no, as again an economy is so complex, you might have some businesses see increases in sales and profits but then might see some businesses with losses and no profits, which is the norm in any economy.

So should anyone get excited about a 0.2 growth? Of course not because its not local, and might not show what or how it affected them.

Did keep their job, did they get a raise, did the company they work for do good or did the company they work for not do so good?

So that is the real economy. How companies do and how it affects people, not so much about about 0.2 growth. 

But any growth hopefully is a good sign.

Have a nice day and be safe!

Japan Wholesale Prices:

 https://mainichi.jp/english/articles/20210812/p2g/00m/0bu/016000c

Article:

TOKYO (Kyodo) -- Wholesale prices in Japan jumped 5.6 percent in July from a year earlier, the fastest pace of increase in nearly 13 years, amid rising energy and commodity prices as economic activity picks up, Bank of Japan data showed Thursday.

The prices of goods traded between companies rose for the fifth straight month and steep year-on-year gains have been seen in recent months -- 5.0 percent in June and 5.1 percent in May. The latest figure represents the steepest rise since September 2008, according to the central bank.

Ideas:

Rising wholesales prices might not mean a rise on prices for consumers and some companies and wholesalers have said they are hesitant to "pass on" the increase in costs to those next in the supply chain and or regular consumers because demand in the Japanese economy is still not where it should be.

Rising energy prices are always a volatile situation, as some energy commodities are subject to fluctuations in global supply.

The prices of good trade between companies are probably easier to "pass on" than to end of user regular retail consumers, as again as demand is not where it should be at the moment, and whomever, knows they might be stuck with the increase in costs for the time being.

Article:

A weaker yen also led to higher raw material costs for companies, the data showed. Import prices surged 27.9 percent while those of exports gained 11.2 percent, both in yen terms.

Wholesale prices normally have a delayed effect on consumer prices. The BOJ is struggling to hit its 2 percent inflation target, measured in consumer prices, even as its U.S. and European peers are carefully monitoring rapid inflation.

Ideas:

Importers prefer a strong yen, which means they have to pay less for the imports from the EU or the US for example.

While exporters prefer a weak yen, as they can get more for their exports to the US or EU for example.

Wholesale prices might have a delayed effect as not all wholesalers will or can "pass on" the increased cost the next level especially if they know there is low consumer demand in the economy for their products.

The reason Japan is not reaching is inflation goal and or the reason for less consumer demand in Japan could be related, at the present, to the delayed virus vaccination process.

And or because the Bank of Japan since around 2014 has been trying to increase inflation to the 2 percent rate, the Japan economy, in its present structure, is unable to reach 2 percent. 

Most likely, even if there was not a pandemic, inflation would probably only reach 1 percent, if even that.

Japan, for example related to its structure, as has just been reported or mentioned in other reports, has a major challenge with working women who are working in jobs that are not at the level of their skills, and as such they are underemployed.

Unleash this group, give them jobs that match their career aspirations or their jobs skills and Japan just might reach that 2 percent inflation level.

But when you have a large part of society that is underemployed its can only have a negative affect on consumer demand as they are not making the salaries that they are trained for, and as such are not going to spend to their potential like they might do if they had higher salaries.

Abe, I think, tried to address this issue when he was Prime Minister.

Article:

The latest survey showed that petroleum and coal product prices soared 38.8 percent from a year earlier, tracking higher crude oil prices. The pace of rise slowed from a 42.0 percent gain in June.

Prices for wood and lumber products surged 33.1 percent on supply shortages due to growing demand for house building and other uses.

Ideas:

Higher or lower prices sometimes can attributed to basic supply and demand issues.

For example such as the wood and lumber prices and there being a supply shortage, a supply shortage usually puts pressure on prices to rise, as producers now have less to offer but still want the same about of sales or profits from the shortage supply and they would with a regular supply.

So with wood and lumber there can always be both a shortage and increase in demand at the same time. If the demand becomes unusually high it can have an affect on suppliers who are unable to keep up with a sudden increase in demand. 

And for oil and petroleum the prices are very much always related to global supplies so if the OPEC nations have reduced output or supplies on the world market that can cause a surge in prices globally.

Supply chains challenges could still be a factor during the pandemic as most likely transporting by oil tankers might not be operating at full capacity which could result in some shortages.

Article

Nonferrous metal prices gained 32.3 percent while those for scrap and waste jumped 81.2 percent. Prices of textile products, which often indicate the strength of domestic demand, were up 0.5 percent.

"The global economic recovery continues in line with progress in vaccinations (against COVID-19) and wholesale prices are facing upward pressure," a BOJ official said. "But coronavirus cases have been resurging at home and abroad, and uncertainty is rather increasing."

Ideas:

As manufacturing sectors continue to improve the demand for more metals will increase which will force prices up. And or a shortage of the metals at the same time will force prices up.

While textile prices might be increasing, it does really mean consumer or even all producer/suppliers will feel the affect of the increase in prices. 

Even the textile sector is complex so even companies in the textile sector might be "passing on" the higher prices to the next customers in the supply chain.

Yes, wholesale prices might be facing some upward pressure but at the same time, the wholesalers might be reluctant to "pass on" their higher costs at the moment because the pandemic is still very much a problem in Japan.

The global economy may indeed be in a recovery phase but it has a long way to go due the the continued increase in new variants, the semiconductor shortage, and the vulnerability in global supply chains.

Have a nice day and be safe!

Japan Economy:

 https://mainichi.jp/english/articles/20210813/p2g/00m/0bu/026000c

Article:

TOKYO (Kyodo) -- Ninety percent of major Japanese companies expect the country's economy to expand in 2022 on hopes that the fallout from the coronavirus pandemic will subside, a Kyodo News survey showed Thursday.

The survey on 111 companies, including Toyota Motor Corp. and Sony Group Corp., also showed companies increasingly joining global efforts to curb greenhouse gases and striving to ensure economic security amid an intensifying U.S.-China rivalry, with a focus on supply chains for chips and energy resources.

The survey found 75 percent of the firms expect moderate economic growth next year, followed by 15 percent that said the world's third-largest economy will expand in 2022.

Ideas:

If the Japanese economy can grow, even a little this year and in 2022 would be good. The virus situation doesn't seem to be decreasing and maybe not even in the early and late fall.

Even with more and more people becoming vaccinated, new variants seem to be popping up everywhere.

The business community maybe has come to realize that greenhouse gases and global warming is real and its a real threat to society and business.

There was a very good article in the BBC talking about the shortage of semiconductors chips. Many industries and supply chains potentially will be affected in the coming months from the supply shortage.

Article:

Five percent said they expect economic conditions to remain unchanged, while no company projected a moderate decline or contraction.

With multiple answers allowed, 93 percent of the firms foreseeing economic expansion said they believe so due to the progress in coronavirus vaccinations, while 83 percent cited the recovery in private consumption and 72 percent pinned hopes on an easing of coronavirus restrictions on economic activities.

Despite the optimistic outlook by the companies, concerns remain over the pandemic going forward, with the government's inoculation campaign remaining slow and the highly contagious Delta variant driving up infection cases nationwide, analysts say.

Ideas:

Yes the progress of the vaccinations is good, but again, even with the increased vaccinations the virus situation doesn't seem to be weakening. If fact, it seems to increasing with the virus variants arriving almost every month.

A real recovery in private consumption or consumer spending might be a ways off, other than a little by little of its improvement each month during the fall. Consumers spending, which make up almost 50 percent of Japan's GPD, never seems to be a full strength.

Exports, has been on an upward slope for the past 6 months or slow, but its possible they could slow if the semiconductor shortage gets any worse.

There have been three recent times that Japanese consumer spending decreased a lot. In April of 2014 when the Japanese sales tax went from five to eight percent, Japanese consumer spending decreased in Q2 of that year. And of course in October 2019 when the sales tax was increased from eight to ten percent, again consumer spending decreased a lot. 

But both times consumer spending bounced back after consumers adapted to the idea of higher prices on products they needed or wanted to buy.

And maybe with the pandemic consumers eventually, will learn to adjust and live with the pandemic as it is and or will learn to be more safe and try to just go about their normal lives, as much as possible in the "new normal" of a pandemic world.

Article:

If the infection situation does not improve as hoped for, recovery of private consumption could be delayed, and supply chains could be disrupted, respondents in the survey said.

As for the current condition of Japan's economy, 56 percent of the companies said it is flat, and 40 percent said it is expanding moderately.

Twenty-six percent of the firms said they expect quarterly sales to return to pre-pandemic levels in 2022 and 16 percent expect any recovery to materialize in 2023 or later.

Ideas:

Most likely the pandemic, in Japan and globally, might not improve any time soon. But at the same time, its always possible that as more and more people become vaccinated, they will just try to, with caution, get back to their pre-pandemic lives as much as possible, which might include more consumer spending.

But at the same time, the pandemic has created major changes in how people live and work. It will be interesting to see how much people go back to what they were doing or how much, before they pandemic.

For example, how many people are going to venture back to eating and drinking out as much as they did before the pandemic. And what about shopping, how many people are going to venture back out to the stores and or buy online as some or many have done during the pandemic.

And how many companies are going to go back to only working in the office or will there continue to be some kind of combination of working from home and working in the office.

Yes, the economy might be flat, but an economy is very complex, and as such there might be some sectors or industries that are flat, some might actually be growing some or even more than some, and of course with the services sector some that are not growing at all.

Article:

But some companies fared well despite the global health crisis, with 16 percent saying sales have already recovered to pre-pandemic levels and 5 percent not seeing any declines in sales.

As the administration of Prime Minister Yoshihide Suga promotes efforts to combat climate change, with the target of achieving carbon neutrality by 2050, 94 percent of the companies said they are taking steps to reduce carbon dioxide emissions.

Companies polled said they believe it is important to promote energy-saving steps during business activities and set concrete targets on reducing greenhouse gas emissions.

Ideas:

Yes again, an economy is very complex and every company and every sector doesn't grow equally or in a linear fashion. 

The pandemic has created new opportunities for innovation and growth for some companies and sectors and unfortunately has hurt a lot companies in particular in the services sector.

In a market economy there are always going to be those companies that do better than other companies, its a given as there are always positives and negatives in a market economy.

But the pandemic has created new challenges for many sectors and companies. While as mentioned above, some might have had no decline in sales, while of course unfortunately some sectors might have had major losses in companies have to shutdown or close.

One can only see the images in the news on NHK or any other channel in Japan and see the implications of climate change with the heavy flooding in many places in Japan such as in Shizuoka and recently Fukuoka, and then in the winter the heavy white out or snow bombs that hit some major highway areas in wester Japan, and the Self Defense Forces had to be used to rescue the stranded cars and semis because of the heavy snow.

Energy saving steps are going to take some time and it might be expensive for some companies. But at the same time, innovations, new products, and services related to energy savings are being created quickly. But the real key is how fast can companies adapts and implement every saving features in their companies.

Article: 

Many companies also said they need to protect supply chains to ensure procurement of high-tech parts such as semiconductors as well as energy and mineral resources when the United States and China impose sanctions and export controls on each other.

The Japanese government has also been focusing on enhancing domestic development and production of cutting-edge semiconductors to reduce the country's dependence on foreign manufacturers amid a global chip crunch.

Kyodo News conducted the survey between early July and early August, targeting major companies in each sector.

Ideas:

Probably at this present time, there is no more vulnerable sector, globally, than the supply chains. Unfortunately the China/US trade situation has affected many countries and most likely will continue to do so.

Countries and companies are in a race now to secure as many rare earth minerals as they can, as they are needed for almost every high tech product in the world now, including semiconductor chips which are already suffering a global shortage

Of course the fire in the chip factory in the Tohoku area of Japan didn't help the Japanese chip making sectors or the suppliers of chips.

While the Japanese government is trying to develop the domestic semiconductor it might take a long time until Japan can fully manufacture enough domestic chips so that Japanese companies don't have to rely on chips or parts for chips from China and Taiwan. 

However, its seems these days, using the Apple I phone as an example, it might have parts from many different companies as almost everything and anything that is electronic probably has hundreds of small micro parts that might be from companies that might specialize in one small part that might go into a washing machine, a car, a smartphone, a TV and so on.

Have a nice day and be safe!

Japan Business Sentiment:

 https://mainichi.jp/english/articles/20210810/p2g/00m/0bu/068000c

Article:

TOKYO (Kyodo) -- Business sentiment among workers with jobs sensitive to economic trends in Japan edged up in July for the second straight month of increase after the government's coronavirus state of emergency on 10 prefectures was mostly lifted, official data showed Tuesday.

The diffusion index of confidence in their current conditions compared with three months earlier among "economy watchers," such as taxi drivers and restaurant staff, rose 0.8 point from June to 48.4, according to the Cabinet Office.

Ideas:

Instead of the phrase economic trends, maybe a better phrase might be economic situation. The economic situation, now, in Tokyo and the Kanto area is not so good. The virus situation basically has exploded, again, and of course unfortunately, any workers or companies related to services are not in a good situation.

The services sector of the Japanese economy has now had to endure 18 months of the pandemic. That means 18 months of ups and downs. Some months seem to get a little better and then a new wave hits.

Some months the emergency measures are lowered and economic conditions improve a little and the the pandemic comes back even stronger.

What ever the diffusion index might say, it can see or feel the mindset of the those in the service sector as they have to live through the pandemic everyday every week wondering if they are going to survive and or when is it going to end.

Article:

A reading below 50 indicates that more respondents reported worsening conditions than improving ones. The office polled 2,050 workers from July 25 to 31, of whom 1,841, or 89.8 percent, responded.

A resurgence in COVID-19 infections caused by the highly contagious Delta variant of the virus led to the fourth virus emergency for Tokyo in mid-July, three weeks after the third emergency was lifted for the capital.

Under the virus emergency, people were requested to stay home, and restaurants and bars were asked to stop serving alcohol.

Ideas:

How about the idea of "economy participants" again maybe as better phrase than economy watchers. These workers are not just watching what is happening they are living it everyday so the are economy participants, maybe even for some living from pay check to pay check in the services economy.

The service sector or services economy is now, the largest part of the Japanese economy. Some might consider manufacturing as the "backbone" of the Japanese economy, but its becoming less and less of the overall economy each decade, as is common in most advanced economies.

The 21st century is the not manufacturing century, that was the 20th century. The 21st century is technology and services and manufacturing while very important for any economy is not the major driver now on economic growth.

As has been reported, up to 40 percent of restaurants in the Tokyo entertainment areas have said they are not following the Japanese governments emergency measures of closing early as they say they can't survive as most if not all of their business in at night.

Article:

In July, "the areas under the full-scale virus emergency were limited, and a (less strict) quasi-state of emergency was lifted in some other areas," which led to some improvement in economic activities, a government official told reporters.

The official also said the Tokyo Olympics, which opened on July 23, helped increase spending on items consumed at home, while easing of emergency measures benefited the accommodation sector.

A worker at an amusement park in northeastern Japan was quoted as saying that relatively favorable weather brought many guests during the four-day weekend from July 22, and the park's monthly business performance "recovered to a pre-pandemic level."

Ideas:

Sources in the Tokyo area have said that maybe there is "pandemic fatigue" now, meaning some people are tired of the pandemic and tired of waiting and they want to be out and about. Sources have said they also see some people not even wearing masks now.

Yes, there might have been some improvement in economic activities but its nowhere near where it should be. And yes the Olympics might have spurred increased spending on food eaten at home, as people watched the Olympics and maybe even ordered, for example, pizzas, McDonalds, KFC etc. 

And maybe there might have been an increase in the purchases of large screen TV's and might have also been the case during the 2019 World Rugby Cup in Japan.

I was in Japan during the Rugby World Cup, not for Rugby but for other things, and I watched the Japanese matches, as I was in Japan in both September and October two different times and the atmosphere in Japan was electric meaning you could feel the anticipation and excitement all around you.

Today that time in Japan and the atmosphere seems a world away now.

Article: 

A worker at a restaurant in western Japan voiced expectations that business conditions would become more severe until progress in the government's vaccine program reduces the number of COVID-19 cases.

In addition to Tokyo and Okinawa, emergency measures were reinstated for some prefectures in early August, clouding the economic outlook.

The diffusion index gauging business sentiment for the coming months fell 4.0 points from the previous month to 48.4, down for the first time in three months.

Ideas:

Unfortunately business conditions might not improve for a while. Even as more and more people get vaccinated its seems unfortunately, as seen in other countries those are are vaccinated are still at risk.

Well in the Tokyo area, the Kanto area, the cases don't seem to be decreasing but increasing. As such Japan has a long way to go before the pandemic is under control.

But its same same globally, as many countries, even with their higher vaccination rates, the new virus variants are increasing. 

Again the index can only show an estimate about what people are thinking and not what people are actually going to do. 

Workers and with anyone else can only hope economic conditions will improve. But before that time workers in the services sectors, the hardest hit sector can just try and hang on as with all the businesses in the services sector.

But not to diminish the dangers of the pandemic in any way, again, as sources in Tokyo have said, more and more people are either learning to live with the pandemic situation and or again pandemic fatigue and have just given up worrying about it, and just want to get out and do things like before the pandemic.

Have a nice day and be safe!

Japan's Current Account:

 https://mainichi.jp/english/articles/20210810/p2g/00m/0bu/031000c

Article:

TOKYO (Kyodo) -- Japan's current account surplus grew 50.3 percent in the first half of 2021 from a year earlier to 10.5 trillion yen ($95 billion), boosted by a remarkable improvement in exports from a slump caused by the coronavirus pandemic, government data showed Tuesday.

Among key components, the goods trade balance marked a 2.3 trillion yen surplus, a turnaround from the previous year's 973.5 billion yen deficit, as exports of cars, auto parts and other items rebounded in line with a strong recovery of the global economy from a pandemic-induced slump in early 2020.

Also lifted by brisk shipments of semiconductor producing equipment amid a global chip crunch, exports soared 22.2 percent to 39.2 trillion yen.

Ideas:

A country's or economy's current account is like the country's bank account. Exports put money into the current account and imports take money out of the account.

Car and auto parts no doubt are the main exports drivers for Japan. Semiconductor equipment can also be seen as an important export, as more and more need semiconductor equipment to offset the global chip shortage.

So there are always positives and negatives in any situation. While the global chip shortage is not good on the other side of the coin it provides an opportunity for others to find ways to benefit from the shortage as the producing and selling of more semiconductor equipment.

And that's how a market economy works. Unfortunately the pandemic has brought too much pain and suffering globally. But at the same time, it has brought new innovations in lifestyles, innovations in new jobs and industries and has forced or motivated some companies to change how they do business to survive.

Article:

Imports expanded 11.6 percent to 36.9 trillion yen on the back of higher materials prices such as nonferrous metals and iron ore, the Finance Ministry said.

The year-on-year rise of 50.3 percent, or 3.5 trillion yen, in the current account surplus for the six-month period was the sharpest increase on a value basis since a 4.8 percent trillion yen jump in the second half of 2015, the ministry said.

The surplus of 10.5 trillion yen in the current account balance, one of the widest gauges of international trade, surpassed the pre-pandemic level of a 10.3 trillion yen surplus in the first half of 2019, the ministry said.

Ideas:

An increase in imports should always be taken with a grain of salt, meaning if the prices or value of imports go up, meaning Japan companies and others have to pay more for something overseas, the actual quantity of imports might not be anymore than before. 

So there is always the value of the imports and the quantity of the imports to be considered.

Whenever a company's costs increase the is the possibility that the company, if they can, will "pass on the costs" to the next company or whomever in the supply chain.

But as has been reported recently companies in Japan are reluctant to pass on the increase in costs because of not so good demand in the economy, whether that is companies buying for companies and or the final consumers buying from companies.

Article:

Meanwhile, the services trade balance, which includes cargo shipping and passenger transportation, registered a 2.1 trillion yen deficit, deteriorating from a 1.9 trillion yen deficit a year ago.

The latest services trade deficit was the worst since 2.3 trillion yen red ink in the latter half of 2012.

The travel surplus of 105.5 billion yen was far below the 1.4 trillion yen and 420.7 billion yen logged in the first-six-month periods of 2019 and 2020, respectively, as many countries kept tight international travel restrictions in place due to the pandemic.

Ideas:

The domestic service sector is not doing so good in Japan and then add in the service sector areas such as shipping and passenger transportation and it looks even worse.

The global travel industry is probably not going to improve that much before the spring of 2022 or even the summer of 2022.

The EU, UK, and the US might be improving their travel options but its a long from perfect, as the new variants everywhere will make travel challenging.

While many countries have higher vaccination rates than Japan, the new variants seem to causing many problems still.

It interesting that 2012 was the last year for a trade deficit. As former Prime Minster Abe right after that made international tourism, or bringing more international tourists to Japan a major part of his plan to grow the economy.

Article:

The travel balance reflects the amount of money foreign visitors spend in Japan versus how much Japanese spend abroad.

"Last year, the impact from the coronavirus on the number of overseas tourists (to Japan) was hardly felt in January before it began to emerge in February. But this year, there have been almost no visitors from the start," a ministry official said.

Primary income, which reflects returns on overseas investments, posted a surplus of 11.4 trillion yen, up 6.6 percent, to log the largest black ink since comparable data became available in 1985, due to an increase in returns on direct overseas investments.

Ideas:

Yes, Abe and the then Japanese government recognized the value of foreign or international tourists coming to Japan as they brought a lot of money into the Japanese economy.

And then, at the time and before the pandemic, all of the tourism related businesses that were created to cater to international tourists, especially those from China.

Before the pandemic, as I traveled to Haneda many times, the lines waiting at the immigration areas were really long. 

But the Japanese immigration waiting area was very smooth and fast, or relatively fast. And I said to myself that Japanese immigration is practicing for when the Tokyo Olympics arrive with the hundreds of thousands of visitors all coming at the same time.

But unfortunately now, all of the those businesses, including all of the hotels, resorts, restaurants, and those in department stores, for example in the Ginza area, who might have worked there because they spoke Chinese and helped the Chinese tourists who came in buses full with their credit cards and cash ready to buy anything, are now mostly likely not working or are assigned to doing something else at the company they are or even were working for.

Its interesting that overseas investments have grown. But one theory or idea is to invest in projects and other types of capital investments when economic conditions are down, and then when economic conditions improve a company is already ahead of the competition who might have waited until economic conditions were better

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In June alone, the current account surplus increased more than six-fold to 905.1 billion yen from a year earlier, staying in the black for 84 months.

The nation registered a goods trade surplus of 648.5 billion yen, and a services trade deficit of 346.4 billion yen. Primary income logged a surplus of 680.5 billion yen.

Ideas:

While exports alone can't drive an economy, they can, if large enough, can drive or really improve the current account.

But it must be remembered just how much exports and the current account decreased from a year earlier.

But at the same time a six-fold increase is an excellent comeback from the first half of 2020.

The fact that the current account stayed in the black for 84 months is a very good indication just how much in demand that Japan's exports have been.

Again, while exports are a very important part of the economy, they are not the whole economy. It has been estimated that exports only make up about 20 percent of Japan's GPD, while consumer spending makes up about 50 percent of Japan's GDP.

The problem is of course that consumer spending is not what is should be and might not be for the rest of 2021.

Have a nice day and be safe!