Toyota Production: Updated Feb. 9

 Article Source:  https://mainichi.jp/english/articles/20220121/p2g/00m/0bu/031000c 

Article:

TOKYO (AP) -- The shortage of parts caused by the coronavirus pandemic is further denting production at Toyota, Japan's top automaker.

Production at 11 plants in Japan will be halted Friday, Saturday and next Monday, Toyota Motor Corp. said.

That comes on top of reductions planned for February that were announced earlier. Those reduction will be on various days at eight of its 14 plants in Japan, including assembly lines making the Prius hybrid and Lexus luxury models.

Ideas:

Toyota over the past several months has been consistently saying we are Ok one week and then later saying we have to delay production again.

What this might show, for Toyota and other companies, is they need to expand their supply sources and the idea of Toyota's keeping a very small supply days are over if the logistics and supply challenges continue.

To make sure that they have a sufficient supply of parts and materials, Toyota and other companies might have to carry more than they need for the current production cycle, just in case there are going to be supply and logistics challenges in the future.

So Toyota and other companies are going to have to re-configure their supply strategies and production strategies for whatever logistics and supply challenges that come up again.

Whether using data science, business intelligence or whatever works for them they need to come up with new scenarios to fit the potential challenges they might face.

Article:

Supplies are running short because of a lack of computer chips, which are crucial in auto parts. Plants in and out of Japan have undergone lockdowns and stoppages related to COVID-19 measures. Toyota has not given details.

Production in January will be reduced by 47,000 vehicles, when accounting for the latest changes, according to Toyota. For the fiscal year through March, production will now fall short of the 9 million vehicles the automaker had targeted, despite healthy demand for Toyota offerings. All manufacturers are scrambling to secure the tight chips supply, worsening the crunch, Toyota said.

"We are doing our utmost to deliver our vehicles to our customers as soon as possible," it said in a statement. "We deeply apologize."

Ideas:

Its been almost a year now since the global chip shortage was first identified and companies by now should have had strategies in place for future potential challenges.

Not just Toyota and Japanease companies but all companies globally that use chips in their products, which is going to make procuring chip even harder.

Unfortunately companies are slow to respond to external shocks or challenges such as the chip shortage. 

Sometimes they don't have or haven't developed any contingency plans for challenges that they haven't expected such as the chip shortage. Perhaps a chip shortage was never considered or something that they haven't experienced before.

And also with the challenge of securing rare-earth metals which are now very important for chips the challenges of manufacturing plants having enough raw materials is going to be even greater challenge in the future.

And add in that not just cars, but almost any and all electric products are competing for chips supplies is going to make the challenge even greaters.

Article:

Toyota has periodically released information about COVID-19 among its workers. Toyota said four workers at a line at Tsutsumi plant in Toyota city, Aichi prefecture, became sick, so it was shut down. Earlier in the week, 14 workers tested positive at another line at the same factory, shutting down daytime operations for four days.

The pandemic has disrupted not only the auto sector but various areas, including shipping, the oil supply and meat packing, serving as a reminder of the connectivity of the world and the importance of the humblest worker.

Matteo Fini, vice president, who analyzes auto supply chains and technology for IHS Markit, said supply problems aren't expected to go away for some time, and they are serious, costing manufacturers as much as $50 million a week.

Ideas:

All of this is somewhat old news or more precise what is going on globally and not just in Japan. 

What this might mean is it might force manufacturers to do is to move even more into robotics for their manufacturing needs with even less workers on their manufacturing lines.

While Japan has been, for the most part a people reliant business or businesses the pandemic might get Japanese manufacturers to re-think the idea of less workers and more robots in their plants.

Yes, the world now is very connected an no part is separate from any other part related to how the pandemic has affected supply chains related to many industries.

Early in the pandemic,for example, meat-packing plants in the US and probably still were hit very hard by the pandemic, and for a while, maybe now, there were periods of specific meat shortages in the US, as many of the workers contacted the virus.

Supply challenges are probably going to continue as the world is now experiencing the omicron virus situaton. As there hasn't been a lot of news related to South-East Asia yet, as it didn't really affect the manufacturing plants in that area until the summer of 2021.

So if manufacturers are losing money, most likely whomever is next and then next in the supply chain is going to see an increase in prices as manufacturers are going to try and re-coup their shutdown losses in the future.

Article:

That means the cost-savings from the famous "Toyota Way" of lean manufacturing, based on having as little inventory as possible for "just-in-time" production, may no longer pay off, said Fini.

"The recent experience of these input shortages is forcing automakers to go against everything they have done in the past 30 years when it comes to supply chain management," he said.

"Carmakers are now considering taking on inventory for certain parts because, in relative terms, it costs peanuts to have that inventory compared with having a line stoppage."

Ideas:

Yes, the pademic and supply chain challenges are going to force companies like Toyota and the previous way the managed their supply chain with maybe having to completely re-do or partly re-do how they control their supply parts, especially those that are critical or those that are consistently in short supply.

Most likely not all companies are going to be able to do what Toyota can and will do because of market power or because of supeior resources but companies are going to have to come up with new supply chain management strategies for the future.

Now might be the best time to re-tool their supply chain management strategies before the situation gets any worse in the future and or to be as learn how to be as flexible as possible to be able to repsond as quickly as possible to any future logistics challenges.

Companies that can't or won't change to meet the present and future needs are going to be left behind as the global landscape is changing rapidly because of the virus pandemic.

Have a nice day and be safe!

BOJ and Households: Updated Feb. 7

 Article Source:   https://the-japan-news.com/news/article/0008198141 

Article:

TOKYO (Jiji Press) — The Bank of Japan’s prolonged ultralow interest rate policy is beginning to affect households in the country.

Although gasoline and food prices continue to rise in Japan, the central bank plans to continue its massive monetary-relaxation measures as its 2% inflation target is still far from being attained.

“There’s no need at all to correct the current monetary easing,” BOJ Gov. Haruhiko Kuroda told a news conference on Tuesday, denying speculation of an early interest rate hike by the central bank.

Ideas:

The BOJ doesn't say exactly how the ultralow interest rate policy is affecing households unless they are talking about how banks are now collecting commission fees as a way to stay profitable during the pandemic.

Energy and food prices are usually measured separately as they are very volatile meaning the prices fluctuate or change a lot and can skew the other items being measured in the conusmer price index, ans as such are measured separately.

But its a good idea to maintain the monetary easing policy as the Japanese economy is no where near the pre-pandemic level with many industries and many companies still not doing very well.

And now with the omicron cases at an all time time, its too early to tell what the affect will be on society and companies.

Are consumers going to cut back on spending in stores or are they to continue to go out as normal.

An interest rate hike at this time or any time soon might cause some serious challenges for the economy, as many businesses and households are nowhere near where they should be as before the pandemic.

Article:

According to the BOJ’s latest outlook, announced the same day, the country’s consumer prices are expected to grow only 1.1% in fiscal 2022 and the same rate in fiscal 2023.

“It’s too early to discuss an exit” from the easing policy, Kuroda said, indicating that the central bank will maintain the policy until it achieves the 2% inflation goal.

Meanwhile, a number of financial institutions are starting to collect commission fees from customers as the BOJ policy is weighing on their profitability.

Ideas:

Something is better than nothing at 1.1 percent increase in consumer prices. But it needs to be understood are the prices increasing because of consumer demand or are they increasing because of cost being passed onto the consumers.

If the 1.1 percent is related to consumer demand that might be a good thing, but if the 1.1 percent is more related to the passing on of costs to consumers, potentially that might be challenge as Japanesae consumers are very price sensitive and might try to find subsitutes at a lower price and or not buy the product as the price as risen too much for them.

At this time, it might not be the best strategy for the BOJ to focus on the 2.0 percent goal as they have been trying to reach it since about 2014. 

So the idea of maitaining the easing policy until the 2.0 goal is reached might be a very long time as consumer spending is always a challenge in Japan.

Its suprising that Japanese financial institutions didn't add a commission fee earlier as even banks need to maintain a certain profit margin. As the key interest rate related to the BOJ was reduced banks, like any other business will find ways to maintain their profit margins.

Its like the Japanease mobile carriers have had to reduce the fees they charge customers mostly based on the Japanese government's ideas or suggestions, mainly from the Suga period, and to maintain their profit margins they will find ways to increase prices on other products or services to maintain their profit margins.

Article:

The BOJ’s negative interest rate, a pillar of its monetary-easing scheme, is imposed on excess funds in financial institutions’ current account deposits at the central bank.

In December last year, MUFG Bank, one of the country’s three megabanks, joined Japan Post Bank, some trust banks and others facing the negative interest rate.

MUFG, as well as other major banks, had avoided the negative rate by actively managing funds. However, a rise in customer deposits due partly to the government’s coronavirus relief measures has forced the bank to hold excess funds.

With no exit in sight from the low interest environment, financial institutions are desperate to secure profits. Among them, moves to pass on costs to customers may grow further, such as introducing account maintenance fees and charging fees for the handling of coins.

Ideas:

The idea of excesss funds was/has always been a subtle strategy of the Bank of Japan and the Japanese government during the Abe era to penalize large companies to try and get them to use some of the excess funds they have to increase the salaries of their employees.

Something like "use your money" or "lose your money" strategy over time. Meaning use your excess funds to increase the salaries of your employees.

The idea was/is as employees/consumers see an increase in their salaries, they will feel better about the extra income they have and maybe save some of it but also use it or spend some of it in the economy meaning consumer spending will increase and the BOJ might begin to reach its 2.0 percent consumer inflation rate.

As banks are businesses too maybe the easy money strategy has left their profit margins too thin and now they have to find ways to increase them with extra fees on customers.

So even banks now are attempting to pass on their cost to many different types of customers.

But it can easily become a trend, as banks and other businesses start to charge fees on anything and all things, which could backfire meaning customers don't like to have to pay a fee for every business transaction, and they might eventually begin to reduce their use of the business and try to find substitutes if possible.

Have a nice day and be safe!

Speech

Japan's Core Consumer Prices: Updated Feb. 5

 Article Source:    https://mainichi.jp/english/articles/20220121/p2g/00m/0bu/020000c 

Article:

TOKYO (Kyodo) -- Japan's core consumer prices rose 0.5 percent in December from a year earlier, driven by higher fuel costs and a weak yen that have threatened to cool consumer sentiment, government data showed Friday.

The nationwide core consumer price index has been in a tug-of-war between higher energy prices, including for crude oil, and sharply lower mobile data fees, which fell 53.6 percent in December following reductions by major carriers amid government pressure.

The headline figure marked the fourth straight month of year-on-year increase, according to the Ministry of Internal Affairs and Communications.

Ideas:

Consumer prices seem to be on the increase in Japan but not compared to other countries. But for Japanese consumers who are very price sensitive it might seem like prices for some things are now becoming too high. 

Maybe the price increases are not affecting some in the population but for the lower middle class, the middle class, those on fixed incomes it might be a lot for some of them.

And yes the consumer price index might be in tug-of-war between various products or commodities as some are increasing and some are decreasing., its in a state of flux or in a state of confusion now as to whether it will continue to increase or decrease and then add in in the weak yen, which is increasing importers which most likely will be passed on the next in line.

Article:

Stripping the drag from mobile communication fees, the core CPI rose close to 2 percent, a target set by the Bank of Japan.

Some economists say the core CPI is expected to rise toward 2 percent in coming months as the year-on-year mobile fee impact that began in the spring of 2021 is expected to dissipate while energy costs remain high.

That prospect puts the BOJ in a complex situation as it needs to maintain its ultraloose monetary policy for an extended period, while rising wholesale prices would cut into profitability and higher goods prices could prompt consumers to curb spending without strong wage growth.

Ideas:

Just what does "stripping the drag" mean exactly. Why not just say "take away the decrease in lower mobile communication fees" etc. 

The effects of the lower mobile fees by now have probably waned on consumers, meaning most if not all consumers have taken advantage of the lower fees and its not going to bring any more consumers for the mobile carriers.

There is a phrase called...." be careful what you wish for".... meaning if the CPI does get to the 2.0 percent level, which has been the BOJ's goal for many years, the Bank of Japan now has to be concerned with what consumers are going to do if consumer prices begin to get too high for them or some groups.

Energy prices seem to be affecting all parts of the economy and society as businesses need energy, oil, gas, coal for manufacturings, business and whomever need energy for their large buildings and so on, and households too have to contend with higher engery prices in their homes, not to mention higher gasoline prices for their cars.

And as the CPI increases consumers are not having to pay higher prices for many things in the stories and supermarkets. But of course many businesses might still be reluctant to pass on some of their costs, meaning they have lower profit margins which means less room for salary in increases in April 2022 and less for future investments among other things.

The BOJ should maintain is ultraloose monetary policy until the economy getsa complete all clear sign and even after from the pandemic because many businesses are not all going to recover that the same rate, meaning its going to take time for full and complete recovery of the Japanese economy.

Article:

In December, energy prices rose 16.4 percent from a year earlier, the fastest gain in over 13 years, also boosted by a weaker yen that inflates import costs. Kerosene prices jumped 36.0 percent and gasoline prices climbed 22.4 percent, according to the ministry data. Electricity bills increased 13.4 percent, the steepest rise since March 1981, reflecting higher crude oil prices.

The so-called core-core CPI, which excludes both fresh food and energy items, fell 0.7 percent, down for the ninth month in a row.

In 2021, core consumer prices dipped 0.2 percent, marking the second straight year of decline, dragged down by the impact of cheaper mobile fees.

Ideas:

All of these numbers being mentioned might sound interesting to some but for consumers and businesses all it means is prices are increasing around them. 

Some might not see anything but for some increases in energy costs or increases in food costs might have a major affect on them if they fixed income, low income or even middle income which means they now have less disposable income to spend on other things in the economy.

But there seems to be two viewpoints here. One viewpoint seems to be that whomever keeps talking about how lower mobile fees are hurting the CPI, as if lower fees for consumers is a bad thing. Of course there are always positives and negatives in any economic situation.

So while lower mobile fees might be good for consumers, they of course might not be good for mobile carriers. But mobile carriers will find ways to maintain profit margins by increase prices on other product or services.

But the main idea is some seem to think its not so good a thing for the CPI. 

But the other idea is all the talk about the BOJ and getting the CPI to the 2.0 level, and not that it might be happening or might be headed in that direction, now the debate seems to be consumers are going to weary of price increase.

But at the same time, that is an economy, meaning there are many different economic actions, both positive and negative taking place at the same time. An economy is very complex and as such there are always going to be multlple factors interaciting within an economy at the same time.

But only real variable that matters is what affects each of the actions have on businesses and consumers now and in the future, and how to they respond to all of the economic actions taking place.

Have a nice day and be safe!

Japan Dec. Exports: Ideas Later: Updated on Feb. 2 and 3.

 Article Source:  https://mainichi.jp/english/articles/20220120/p2g/00m/0bu/016000c

Article:

TOKYO (Kyodo) -- Japan's merchandise exports and imports both hit record highs in December on the back of stronger demand for cars and higher energy prices, government data showed Thursday.

Exports jumped 17.5 percent from a year earlier to 7.9 trillion yen ($69 billion), up for the 10th straight month, while imports surged 41.1 percent to 8.5 trillion yen, up for the 11th consecutive month, according to preliminary data released by the Finance Ministry.

As a result, Japan marked a goods trade deficit of 582.4 billion yen in December, for the fifth straight month of red ink.

Ideas:

Even though there was a trade deficit meaning more imports than exports, most likely the only reason for the deficit was the weak yen, which causes an increase of imports prices.

If we were to go to JETRO or any other statistical area we would most likely find the actual quantity of imports and exports and not just the value of the each.

Japan, before the pandemic has always been known as an export powerhouse, even though it imports a lot as a resource poor country. Because of its unique ability to maintain a competitive advantage in certain kinds of products its been an export power for many years.

The idea of a trade deficit also mean there is less going into Japan's current account. When exports are greater than imports then there is a trade surplus, which can increase the current account, kind of like a country's bank account. 

A 41.1 percent increase can only be attributed to the weak yen and a surge in energy prices over the past half year. Its not like all of a sudden there was a surge in demand for imported products in Japan, as the weak yen and the higher energy prices pushed the value of imports higher than the value of exports.

Article:

While the Omicron variant of the coronavirus spread rapidly in Europe and the United States in the reporting month, the impact on Japan's exports to such countries was limited, economists said.

"Amid the pandemic, demand has decreased for services but increased for goods" such as for home appliances due to more people staying at home, said Takeshi Minami, chief economist at the Norinchukin Research Institute.

"As Japan, Europe and the United States trade final goods, rather than parts, the spread of the Omicron variant had little effect on exports," he said.

Ideas:

By this time, after two years of the pandemic, global trade might be back to normal or almost back to normal or at least related to demand for merchandise products.

There might still be some be some limitations here or there related to shipping etc. but its seems not as much as before such as the LA and Long Beach problem last summer when up to a hundred container ships were sitting off the coast of California waiting to be unloaded.

Yes, the services sector in Japan has taken a big hit meaning not as many customers were out and about and were staying more at home which might have resulted in the buying of home appliances, air conditioners, new TV's and so on. 

So places like Yodobashi Camera or Big Camera and major department stores might have seen a surge in the sales of home specific products.

There might have even been a surge in takeout meals as some restaurants, more shopping at supermarkets for food to eat at home, along with maybe some delivery services increased to such as Uber Eats, alhough its been reported some of the food delivery places were on the expensive side. So there might have an increase of bento type meals to take home and eat too.

Article:

The depreciation of the yen also helped to lift exports, Minami said, boosting repatriated profits from products sold overseas.

The Japanese currency weakened 9.5 percent against the U.S. dollar from a year earlier, trading at an average of 113.95 yen in December, according to the ministry.

By item, exports of automobiles rose 17.5 percent from a year earlier, while iron exports swelled 75.1 percent, as supply chain disruptions caused by the coronavirus pandemic gradually eased.

Ideas:

A weak yen always help exporters as they can get more for the products they sell overseas. And the fact that the US is the second largest trade partner with Japan, maybe after China, a 9.5 percent decrease in the yen is a huge surplus for Japanese exporters.

But it must be considered that 2020, even in the fall of 2020. global trade was not even near the pre-pandemic level of 2019, so a result, the 17.5 percent increase in the exports of autos, might have been a result of delayed demand or delayed shipping and 2021 was somewhat of  a catch-up year for exports.

Supply chain disruptions might have eased but there is still the possibility that they can return as manufacturers globally and especially in South-East Asia might still be hit with the omicron situation which could slow down production and the supply chains globally.

An increase of iron ore exports at 75.1 just shows maybe there is a lot of delayed demand and not a actual increase in new demand as delayed iron ore orders were being completed at the same time as current exports orders.

Article:

Japan's exports previously posted a record 7.7 trillion yen in March 2008.

In December, exports to China, Japan's biggest trading partner, climbed 10.8 percent to a record 1.7 trillion yen, rising for the 18th consecutive month, backed by robust demand for semiconductor-related parts and cars.

Shipments to the United States grew 22.1 percent to 1.5 trillion yen, increasing for the third straight month.

The weaker yen resulted in higher import prices for Japan, with crude oil and liquefied natural gas prices more than doubling, up 116.6 percent and 100.5 percent, respectively. The value of coal imports soared 178.4 percent.

Ideas:

The semiconductor industry is a growing industry and will get even bigger in the future as more and more products use semiconductors. So Japan might be on both sides of the semiconductor industry, both as a consumer of semiconductor products and as a producer of semiconductor products.

Despite the pandemic it seems global trade has come back strong, as economies, businesses, and consumers continue to need and use products from everywhere in the world.

But as the omicron situation increases will there still be strong global demand or will there be a pause in there somewhere.

It was reported earlier that the Japanese government, to help the economy and society, was going to give Japan energy suppliers subsidies as a way to help them not pass on their increased costs to the next in the supply chain.

Whether the subsidies are going to be enough remains to be seen. As the weak yen put pressure on importers including energy importers, their profits margins get smaller and smaller and then many have no choice but to pass on some or all of the increase in costs because of the continued increase in global energy costs and because of the weak yen.

Article:

In the whole of 2021, exports rose 21.5 percent to 83.1 trillion yen, advancing for the first time in three years. Iron shipments contributed the most, increasing 48.1 percent.

Imports rose 24.3 percent, up for the first time in three years, to 84.6 trillion yen, with crude oil prices jumping 49.1 percent.

Trade with China saw record highs in value terms, with exports to the country rising 19.2 percent to 18.0 trillion yen, up for the second consecutive year, and imports from the country increasing 16.2 percent to 20.4 trillion yen for the first advance in three years.

Ideas:

Again it must be remembered that trade in 2020 was well below where it should have been which makes 2021 look better than what it should be, as trade between countries was catching up from a lag in 2020.

But an 48.1 percent in iron shipments is interesting as to why there was surge in iron shipments. Of course iron ore is used for many different products including infrastructure project, so most likely is more a making up for less demand in 2020 as many projects and manufacturing activities were slowed or delated due to the pandemic in 2020.

Unfortunately, the only real consensus for the increase in imports as to be an weakening of the Japanese yen and the global surge in energy prices making Japanese imports look more in value than what the quantity really is.

Its good for both Japan and China that trade is robust as trade benefits both countries and is not a zero game, meaning only one wins or gains all of the benefits. World trade is about everyone gaining benefits and not just one country.

Article:

Both the overall export and import figures were the second highest on record, translating into a goods trade deficit of 1.5 trillion yen, following a 388.3 billion yen surplus in 2020.

Looking ahead, economists said the spread of the Omicron variant in Southeast Asia should be carefully watched, amid concern over a repeat of the summer of 2021 when auto parts factories were closed for anti-virus measures.

"Government responses in countries such as Vietnam, Malaysia and Thailand that are key car parts suppliers are especially in focus," said Atsushi Takeda, chief economist of the Itochu Research Institute.

"But since countries have been implementing milder restrictions compared with those against the Delta variant infection surge, there are expectations that the impact on auto output will be limited," he said.

Ideas:

But again it must be remembered that 2020 overall might not have been that good because of the pandemic and because of supply disruptions, supply shipment disruptions, along with demand disruptions, 2021 again might have been just have had a catching up effect, meaning overall trade was just getting back to normal after all of the disruptions of 2020.

However, the fact that there was a trade deficit again might be attributed to an surge in energy prices and a weak Japanease yen which increases the prices or value of the import products coming into Japan.

And the surplus in 2020 can also be attributed to logistics challenges that might have reduced the amount of imports coming into Japan along with the second half of 2020 and a surge in demand for Japanese cars which would have shifted Japan's trade to a suplus and not a deficit.

Its too early to tell what the omicron situation might have on South-East Asian suppliers. But it seems that maybe the omicron situation is not a severe as the delta situation was in the summer of 2021, and or companies in South-Asian countries are now better prepared to the omicron situation compared to the delta situation.

So most likely from here on out,  there will very limited disruptions if any and globally it seems to be milder but more cases.

Time will tell exactly what is going to happen.

Have a nice day and be safe!

Japan Govt. Economic Vew: Updated Feb. 1

 Source Article:  https://mainichi.jp/english/articles/20220118/p2g/00m/0bu/059000c

Article:

TOKYO (Kyodo) -- The Japanese government on Tuesday retained its view that the domestic economy remains on a recovery track but warns of downside risks from a recent surge in infections with the Omicron variant of the coronavirus.

The Japanese economy "shows movements of picking up recently as the severe situation (of economic activities) due to the novel coronavirus is gradually easing," the Cabinet Office said in its monthly assessment report for January. In December the outlook was upgraded for the first time in 17 months.

But the report said close attention should be paid to a potential "further increase in downside risks" from a resurgence of new coronavirus cases, supply-side constraints and higher raw material prices.

Ideas:

The Japanese economy may have been picking at the time of this article but the virus situation has gotten worse over the past few weeks.

How exactly is the omicron situation going to affect the overall economy much less specific sectors such as the services sector which has been under constant stress the the spring of 2020.

As of last report, hospitals are now nearing the dangerous 50 percent occupancy rate. And last report there might be up to 400,000 people recovering at home. 

But reported yesterday or today Prime Minister Kishida is not yet ready to declare emergency measures for Tokyo depiste Tokyo having record numbers too.

Part of it is course is to keep the econony moving as smoothly as possible,without too many disruptions. Another reason might be not to cause too much panic as there are different reports on just how serious or severe the omicron virus is compared to the delta virus seen last August.

Supply side contraints and higher raw material prices are weighing heavily on some sectors and companies and they decide what to do about higher prices and maybe supply shortages at the same time.

Article:

The office had also cautioned about a supply crunch and rising prices in the previous report but the warning of the downside risks from the virus situation was the first since September, when the previous state of emergency over the pandemic was still in effect in some prefectures including Tokyo. It was completely lifted nationwide on Oct. 1 following a decline in virus cases.

The office maintained its evaluation for private consumption, saying it is "picking up recently," after upgrading it for the second straight month in December.

A government official said at a press briefing that the recent virus spread has not had a major impact yet on consumer spending.

Ideas:

Supply side contraints again are causing some challenges for some companies. For example Toyota, every month, seems to change what is says, saying all is OK now, to we have to reduce production in some plants because of chip shortages.

So if Toyota is seeing supply side shortage, most likely other manufacturing firms are feeling the same pressure.

And then add in increasing energy prices for most if not all companies and no doubt the once stabel manufacturing industry is feeling a lot of challenges at this time.

Consumer spending might have seen a spike in December and early January from the holiday season and the New Year week long annual holiday but as the omicron situation is getting worse it will be interesting to see if concumers spending remains positive or decreases as less consumers spend due to the explosion of the omicron cases.

But just maybe as most have been vaccinated they don't feel as worred about the omicron situation and continue to go about spending as usual.

Article:

"But we need to keep monitoring its possible impact on the economy," the official said.

The latest economic assessment comes as the nation has been seeing a rapid increase in daily virus cases close to the highest level since the year-end and New Year holidays on the back of the spread of the highly contagious Omicron variant.

The government has yet to issue a fresh state of emergency but three prefectures were placed under a quasi-state of emergency earlier this month and more are expected to be added soon.

The measure in expanded areas could dampen consumption harder, with more dining establishments becoming subject to restrictions such as shorter business hours and a ban on serving alcohol.

Ideas:

As Japan hit a record of 80,000+ cases the Japanese government might be under pressure to place more prefectures under some kind of emergency measures. But again, Prime Minister Kishida has not made a decision or is delaying placing Tokyo under any emergency measures.

Most likely the Prime Minister and the Japanese government is trying to find ways to maybe just ride out the omicron situation if its percieved as being weaker than the delta virus and as most citizens in Japan have already been vaccinated.

But at the same time, as of this writing, SDF which operated  some vaccination sites in Tokyo and again is going to operate the vaccination booster sites are beginning to get up and running as the pressure for booster shots in growing.

Hopefully there won't be any restrictive measures which might decrease any economic activity in Tokyo or any other places, and the services sectors has now had to deal with 2 years of on an off restrictions.

But as was reported last fall and early winter, some or many restuarants, for example, were ignoring the emergency measure suggestions as they said they can't survive any longer with the emergency measures.

So most likely if Prime Minister Kishida does put Tokyo under some kind of emergency measures, maybe many or some restaurants are going to ignore the suggestions and try to operate as normal, because if they do they won't survive the pandemic.

Article:

By component, the January report revised upward its view on industrial production for the first time in 14 months, saying that it "shows movements of picking up." The previous assessment said that it "appears to be pausing for picking up."

The official said that the revision reflects a rebound in auto output from a slump caused by a global semiconductor shortage and a disruption in parts supplies from Southeast Asian countries due to restrictions on economic activities there.

Assessments of other major components were unchanged. The office said that exports are "almost flat," and business investment "appears to be pausing for picking up."

Ideas:

Industrial production has been on some kind of roller coaster series of ups and downs during the pandemic because of the chip shortage, other supply shortages and other challenges.

Exports might appear to be flat for several reasons. One reason might be that auto exports makeup for about 20 percent of Japan's exports. So as car companies have had to reduce their production in some of their plants it might have reduced Japan's overall exports.

At the same time, as with any economic activity there might be some seasonal lags or periods of strong growth, periods of just normal growth, some periods of flat or almost no growth, and even periods of negative growth such as in the spring of 2020.

But its important to remember that the Japanese economy is more than exports even though exports seems to get a lot of the news.

Most likely exports overall in the Japanese economy might be no more than 20 percent of Japan's GDP which means the domestic economy makes up 80 percent of Japan's GDP.

For example in South Korea, exports are estimated to be 50 percent of its GDP. The reason for as much as 50 percent is Japan has a relatively small population for the size of its major companies which can't compete or survive just selling domestically.

And basically because in the 50's, 60's and 70's the South Korean economy was so weak with very little domestic consumer spending, South Korean companies had no choice but to produce and sell their products globally.

But its both a positive and a negative. When the global economy or world trade is growing South Korean companies do very well of course, which means the economy is growing. But if world trade and or global demand slows down, just as in the spring of 2020, the economy doesn't do so good.

The South Korean government knows its got a problem related to too much reliance on exports at the expense of the domestic economy, but it doesn't know how to balance out the economy yet between exports and the domestic economy.

Unfortunately sometimes large companies have too much market power which might show up in forcing smaller suppliers to give the prices on supplies that the big companies want which of course means smaller supplier companies can barely survive.

Japan doesn't have the same challenges as its economy, like Germany for example, is a more balanced economy and doesn't need to rely only on exports for its economic growth.

But like South Korea, there have been reports suggesting that large Japanese companies and smaller supplies sometimes have the same challenges.

And compared to South Korea, which has an unbalanced economy, which is tilted toward big companies, Japan has  more balance between large, medium and small sized companies.

Yes like anywhere else, South Korea has more small and medium sized companies but as far as economic output is concerned most of the output is with the large companies, but in Japan it seems to more balanced between large, medium, and smaller companies.

And finally the idea of pausing for a pickup in investments, again its not always a linear or straight line progression of growth, as there are periods of srong investments, periods of low growth, and periods of no growth.

For example companies might be waiting for the new fiscal year to begin in April 2022 to begin a new round of fresh investments.

Have a nice day and be safe!