Japan Households Spending: Updated September 9, 2024.

 

Japan household spending in July edges up 0.1% amid wage increases

 Article Source: https://mainichi.jp/english/articles/20240906/p2g/00m/0bu/005000c

Ideas:

Possibly the wage increases are just beginning to have an affect on Japan household spending, but to be fair, there is not a super surge in spending as maybe inflation is sill part of the picture in the Japanese economy.

Yes, again, the inflation situation is having a real affect on the Japanese economy, as consumer spending in Japan, is maybe 50 percent of GDP, but it can't be seen because of the inflation situation and the weak Japanese yen, which increases import prices too much.

Even at 0.1 percent that is with the margin of error, so it  quite possible there wasn't much of an increase related to Japanese household spending.

Average spending is just an average and really doesn't give a good spread or variance to see what was the highest amount and the lowest amount. 

Most likely unfortunately, the lower income groups might have spend much less and they have less income to use for everything.

An economy is not just made up of the middle class or even upper middle class, but the lower classes too, and unfortunately, the lower class income group is getting larger in Japan each year.

Housing outlays usually are not an everyday thing so some months might be more than other months depending on the mood of the households.

Of course TV's would be bought to watch the Paris Olympics, just like during the Rugby World Cup or the World Cup, when Japan is involved, new TV's are bought, even though they might not need a new one.

Package tours surged which indicates, the pandemic has finally been put to rest and people are moving around Japan and even going on overseas trips despite the weak yen, which decreases the purchasing power of Japanese travelers in overseas markets.

Perhaps the wage increases in April are finally being felt by Japanese households and they are seeing the affects and finally beginning to spend some again, despite the inflation situation and the weak yen situation.

Of course, as inflation continues Japanese households have been cutting back on food that is expensive for them. Most likely some food is elastic meaning as the prices rise too much, consumers decide they don't want to buy it and of course choose chicken instead of beef and pork.

And as the Japanese government reduced or eliminated the energy subsidies, Japanese households cut back, when they can, to reduce expenses.

It might be worse for the lower-income groups, as they spend more on food for the amount of money they have, which means they are looking for substitutes as they can't afford the normal prices on food.

Its natural that consumers are becoming more selective as inflation continues in Japan, and yes, consumer spending might be recovering, but its never been that strong in Japan compared to the EU or the US.

Perhaps, due to inflation Japanese households are still holding back on spending, and, again, are being very selective and not just going out and spending all of their wage increase.

Household spending or consumer spending,, again, has never been that strong in Japan, and with the pandemic and now inflation, and the weak Japanese yen, Japanese consumers just not spending like US consumers do.

Have a nice day!

Japan Convenience Stores: Update Sepember 11, 2024.

 

Japan redefining convenience store experience from snacks to style

Article Source:  https://mainichi.jp/english/articles/20240902/p2g/00m/0bu/031000c 

Ideas:

Whenever I travel to Japan, which is two or three times a year, I always go to Japanese convenience stores, as the quality of the food is excellent and the selections are excellent too.

The convenience stores in other countries, mainly the US and South Korea, just can't compare and the quality of everything is very different.

Japan has taken the convenience  store to an art form, as no country can compare with what Japan has done in the convenience store industry.

The latest fashion trend related to Japanese convenience stores is the latest innovation that keep getting better and better.

You can almost do everything in a Japanese convenience store such as postal matters, sending mail, faxes, banking, picking up orders from Amazon that you bought online, including ATM also.

What is significant too, is there are many foreign students working at Japanese convenience stores, as for some reason young Japanese university students don't want to work there or it doesn't fit their schedule or  its not the pay they want.

Most likely the convenience store fashion items are going to cut into the sales of Muji, Uniqlo, and Loft, which have fashion items too of course.

It seems Japanese customers like convenience stores for canned/bottled drinks too, as for the most part, the number of coffee shops are not as many as in other countries, 

There are also a lot of places to buy canned/bottled drink at machines in and around Japan, and or course in convenience stores too, which means Japanese customers go there a lot instead of maybe a coffee shop. 

That shows that networks are important as a convenience store can use a manufacturing company to produce the fashion products it needs for it stores.

Of course convenience stores can't really turn into a fashion store like Uniqlo, but it shows how innovation can drive sales and also help when convenience stores see new trends and they can easily move into whatever is the latest trend in the retail market.

Back to the idea of foreign students working at convenience stores in Japan, as I never see any foreign students working at convenience stores in South Korea, as there could be many reasons such as immigration laws might prevent them from working there and or Korean companies don't want to hire foreign workers.

Of course, again, convenience stores are not going to be the next Uniqlo, as its just not their mission, but small things like towels and socks might be in convenience more and more in the future.

Who knows whats next for convenience stores, as how much longer can they innovate without moving  too away from their core strengths. 

Maybe, unfortunately, the future is going to be AI and robotic innovations, as there is a so-called labor shortage in Japan, such as most Japanese convience stores have foreign workers and not many Japanese university students working in them. 

But that might actually cost more money that its worth to set up, and for the most part, Japanese cant to see a real person and not a robot serving them are helping them when they pay for their drinks or food.

The Muji brand is almost like a no-brand product, so selling in Lawson makes perfect sense and Muji is a name brand but its a basic name brand so even a no-brand type product.

Its good that Muji and Lawson has hooked up to sell Muji products in convenience stores, as again finding ways to reach the customer and providing what customers want and need.

Most likely Seven -Eleven will eventually begin to so what the others have done, as they don't want to lose market share to the other convenience stores. Of course sock alone is not going to change the market, but if one convenience stores is making significant sales in some product the other stores are going to find a way to do it too.

The contrast between the US convenience stores and Japanese convenience stores is not like day and night as US stores are not even on the same planet as that is how different they are.

US stores are just a small place for maybe travelers to stop at while Japanese convenience stores are more like for anything and everything you want or need.

Of course most Japanese convenience stores are in big Japanese cities, for the most part, while many US convenience stores are road stops and gas stations, with just some food and drinks only and not a great selection of anything.

Even if there are convenience stores in big cities in the US, they still can't compare with the large selection of products like in a Japanese convenience store.

Maybe its just a difference in culture, maybe its a difference in marketing, or maybe its a difference in priorities, as Japanese convenience stores have evolved into more than just a place to stop at in the mornings before going to work or before returning home at night.

Of course you really can't just live on Japanese convenience store products, but it quite possible to do it, but who really wants to do it.

Japanese convenience stores always seem to be changing or innovating, as maybe because of the competition among Japanese stores as they need to keep as step a head or at least keep up with others in the market.

As I often visit convenience stores in Japan, usually in Yokohama, which is just west of Tokyo in the same metro area, I see many foreign workers at Japanese convenience stores with name tags in katakana, which is what is used for foreign names in Japan.

Again, what I don't see a lot of is Japanese university age students working at Japanese convenience stores, as for whatever reason, they don't want to work there or the hours don't fit their schedule, and or they don't want to work for minimum wage, and or just don't like the work.

I first noticed Japanese convenience stores way back around 1999 when I would stay at a Japanese hotel, and go to the Japanese convenience store in the morning for some Japanese food, which at that time was good then too. 

So I've been visiting Japanese convenience stores for over 25 years and every time I go there the offerings are high quality, and even the food offerings are a lot and they always restock several times a day.

Many companies are now jumping on the Japanese convenience store bandwagon and trying to capitalize on the popularity of convenience stores, especially with foreign visitors to Japan.

But Japanese convenience stores, again, need to be very careful that they don't forget their original mission, and or maybe they've moved way past the original ideas many years ago.

Just an observation, there are not many coffee shops in Tokyo or Yokohama, compared to Seoul South Korea, which seems to have a a coffee shop on every corner, and more than one.

Its seems, maybe true or not true, there are a lot of vending machines in Japan, along with many convenience stores that sell canned and bottled drinks, but in South Korea, there are almost no vending machines, or not a lot.

Maybe trying to normalize buying clothes at convenience will become or is now popular, but Japanese convenience stores will never replace Muji and or Uniqlo or GU for clothes in Japan. 

But of course that is not the goal of Japanese convenience stores as they found something that is popular and trying to capitalize on the current trend.

Most likely other Japanese convenience stores will do the same thing in the future, with small fashion items and maybe customers will like them too.

FamilyMart is trying to break the mold of what a traditional convenience stores should do or be, but that seems to be the trend for a long time, of trying to look and feel different than the other convenience stores.

But just how much can they change or innovate and keep with their original mission of what they do best. 

That is the challenge of all Japanese convenience stores, now, to change as needed but staying within the scope of what a convenience in Japan should be.

Japanese convenience stores can better be full-service type department stores, as they are just too small space-wise to be anything but a small store.

Have a nice day!

Japan and 4 Day Work Week: Updated September 9, 2024.

 

Japan wants its hardworking citizens to try a 4-day workweek

Article Source:  https://mainichi.jp/english/articles/20240831/p2g/00m/0na/025000c

Ideas:

Globally, the trend seems to be moving toward a 4 day work week for better work life balance.For example, in South Korea, like Japan. the country has the longest working hours but the South Korean government is trying to get companies to move to a 4 day work week too.

Some might say the 4 day day work week started during the pandemic, but it started much earlier and companies were beginning to experiment with ways to improve work life balance without sacrificing productivity.

Japan, like South Korea, is a unique situation, as Japanese workers, some or many think the company is their family compared to the US or the EU, so they put in very long hours at the office.

That all sounds good but, many workers in Japan and many Japanese companies are still too traditional and not really tuned into 21st century ideas about work life balance.

Many Japanese workers might be concerned if they work only four days they might loose pay and or they might loose a chance for advancement in the company.

At the same time, maybe some companies might not pay for the extra day off and they would only pay for 4 days of work not the usual 5 days.

The 4 day work week sounds perfect or working women with children but they too are concerned they have a chance for advancement in the company if they choose the 4 days work week.

Panasonic is a good example of what workers think and feel, either they don't want to be seen as slackers, only working 4 day a week, and they want to miss a chance for advancement if only working 4 days.

Then there is still the ideas of the group concept in Japan, meaning if they only work 4 days a week and not 5 they are letting down the other workers in the company.

Its going to take a lot effort to change the mindset of the Japanese workers or the Japanese companies, as the loyalty to the company can sometimes be stronger than wanting a better work life balance.

What its going to take is the younger workers are going to have to drive the changes needed in the Japanese economy and Japanese culture, but as long as the senior member of a company have power there is nothing the younger workers can do, at this time.

The conformist mindset is very strong in Japan, so strong some workers are afraid to do anything that might upset the work atmosphere at the company.

A work life balance situation has not really taken hold in Japan as long hours are the normal for most companies and workers are afraid to cause as stir in the company.

Its very unfortunate that Japanese society puts so much pressure on whomever who doesn't conform to what someone thinks or says. w

While US is not perfect ii might better work life balance situations for workers compared to some countries, but of course the EU countries have the best work life balance situations.

Long hours might be the norm, but most likely young Japanese workers don't like the long hours or even the so-called service overtime in a company.

They might give their workers two days off, but its possible, some workers work six days week for the traditional Japanese companies.

Japan hasn't got up with the rest of the advanced globalized work world, as for example, 35 hours might be the norm in the EU with long summer vacations. 

And its no coincidence that EU countries have the highest happiness index rates compared to Japan and South Korea, which are near the bottom in happiness rankings.

But Japan and South, or at least South Korea, don't rank happiness as being important in life, as the only thing that matters is status, success, and money. 

So unfortunately, they might think being miserable is just a part of life and happiness has no place in moving up the ladder.

Work in important in every country is important and so is making money, but the Japanese take it to another level, with company group dynamics, as an important part of life.

Not to disparage the Japanese way of doing things, as its worked for them for a very long time, but how much longer can regular Japanese continue to have not so good work life experiences and not want something different in life.

Maybe the EU style of work or even the US style of work won't work that well in Japan, as the culture is much different and the company mindset is much different. 

Its kind of like when a US baseball manager became the manager for a Japanese team and he tired to change the practice style of less practice time, but the Japanese went back to the field in the afternoon and practiced even more as they were used to all day practices.

What  Japan can do is continue to employ workers past the normal retirement age as many some want to continue and need to continue to work. And as needed pay them lower than the normal wage compared to younger workers.

Japan needs to be more flexible and have many different ways for work instead of the standard Japan has used since after WW 2.

Japan needs a complete mindset change but its not going to change enough for some, as the old ways are going to remain, for a while at least.

Japan needs more companies like the one in the article that lets a worker have Wednesday off. That doesn't mean all companies have to do the same thing, but companies should have flexible schedules that can benefit many people in the company.

Not Japanese companies can be like EU companies or the Northern EU companies but they can find a way to provide better work life experiences with more days off as needed.

Perhaps, globally, the 5 days work week or even the 6 day work week are things of the past as workers/people are looking for better work life experiences without having to work 5 or 6 days straight.

So in Japan, some companies are being more progressive and embracing better work life experiences for their workers. But so far its not enough, as like, globally, people dread Monday and going back to work, and the 5 day work week or even the 6 day work week.

Not all workers and not all companies can do what Fast Retailing has done but companies can find better work life experiences for their workers that doesn't affect company productivity.

As some companies do what Fast Retailing has done ,workers will notice and want to work there, and other companies might start losing workers as they change to companies with better work life experiences, and then as companies begin to loose workers, as there is a so-called labor shortage in Japan, they might think they too need to change and give workers more flexibility in their working hours.

Unfortunately there are always going to be companies or industries where long hours are the norm, and even if a company offers a 4 day work schedule, workers will feel compelled to work the other days too.

Less pay if its for 4 days and workers don't get the same pay, many workers are not going to want that option. If the 4 day work schedule is the same pay as the 5 day work schedule, then workers will want to do it.

And in the global tech industry, where workers work 60+ hours a week, there probably are not too many companies offering 4 day work weeks.

First off engaged can be different things for different people, but yes its probably true that only 6% of Japanese workers actively engaged at work.

If only 6% that might be a sign that some Japanese workers don't like their work, and or are afraid to say or do anything and just keep their heads down and not cause problems, and or they wish they were someplace else than working for a specific company.

Even at 23% the number is very low, which means maybe a lot of people just don't care about their work, other than needing to make money to live.

The Tokyo-based NS Group might be on to something, but are other companies going to do the same thing or can they do the same thing, as some companies actually need workers there all 5 days or maybe even 6 days a week.

But yes, the service industry is the perfect place for a flexible work schedule, while other industry sectors might have a hard time implementing a more flexible schedule.

Back during the pandemic remote work became trendy and many companies began to experiment with remote work, now some or many companies have gone back to the office and not using remote work.

Remote work, a more flexible work schedule, might be the future of work as for example  only 6% of Japan are engaged in their work and only 23% globally are engaged in their work that might be a clue that something needs to change but can companies change and provide a better work life experience for their workers.

Have a nice day!

Toyota Global Output: Updated September 5, 2024.

 

Toyota July global output down 0.6%, smallest decline in 6 months

Article Source:  https://mainichi.jp/english/articles/20240829/p2g/00m/0bu/032000c

Ideas:

Toyota doesn't need to worry that much about its global production as its still the largest car company among car companies globally.

But as things are these days, even a small drop in production or sales can cause a stir among shareholders and investors as companies have no room for any downturn, reduction in production due to factory challenges and so on.

Back in the day, companies could make long-term plans and could stick to the plans even if they had a not so good quarter here or there, but those days are long gone, as now its what have you done for us today, not what are your plans for the future.

Car companies are always experiencing recalls as its nothing new but of course not good, but  its part of the car business as defects often happen sometimes a lot with cars.

Toyota has a lot of models that it produces, and as a result if one model goes down the other models can make up for the lost production, like the Prius did.

Unfortunately, maybe deliberate or a lack of focus, the certification scandal might have been a need to certify cars quickly to keep production targets on schedule.

China is in a difficult situation at the present time, as it economy seems to be going through some kind of transition and Japanese companies maybe relied a little too much on China and its potential.

While the US economy seems to be on solid footing beside the rumblings in the media about the possible recession, which most likely is not going to happen.

The EU is a different situation but, production in the EU for Toyota might still be very good at the present time.

The global sales figures are not bad, except of course shareholders or investors might see things differently as they want increases sales every quarter.

China is following the normal strategy of offering lower-priced cars to overcome the name-brand global cars in the market. Overtime, as the Chinese cars gain more traction, most likely, as always, their prices will increase.

Not all car markets are the same as noticed some markets big be better than other markets, so its a good idea that a car company, or any company can be in a many markets as possible, as there is always the chance a specific market will be down while another market will be up.

Again, a 0.6 percent decline in production is not that much as stops and starts happen all time with production.

But again, as always, the shareholder might not like it if car companies are not producing at full capacity 24 hours a day.

And even more a 05 percent decline globally among all eight major car makers is not that bad, as some might have been better than other or had better July productions than others.

Japan is a major manufacturing production economy, even though, as with all major economies, services make up for most of the businesses in the economy. But Japan seems to be unique, in that it focuses a lot, maybe too much, on manufacturing to grow its economy.

Despite China's struggling economy, which seems to be in some kind of transition period, there is still a lot of competition in the Chinese market and especially as the Chinese car markers are focusing on producing cheaper electric cars to beat the Japanese car makers, which seem to be lacking slightly in the production of electric cars.

Nissan, like Toyota, and even Honda, done't need to worry that much as if they, which are they are, in many markets globally, the drop in China can be made up with increases in the US or even the EU.

As an example global sales increased 0.1 percent even though there was a drop in sales in China.

Have a nice day!

Japan Jobless Rate: Updated September 5, 2024.

 

Japan jobless rate hits 2.7%, 1st rise in 5 months

Article Source:  https://mainichi.jp/english/articles/20240830/p2g/00m/0bu/014000c

Ideas:

Japan has always been a country with good employment numbers and even better with low unemployment rates. But the numbers don't show the real picture, as since 2008, like other countries Japan has moved to more part-time workers and contract workers, which usually don't get full benefits, as way to lower company costs.

The challenge with changing job in Japan it takes a long time to find a new job, but some people are wiling to go through the process and they do eventually find jobs.

The Japanese government wants to stream-line the process to make a more fluid and flexible society so that worker can easily change jobs with no hassle from current employers and less paperwork related to new jobs.

Right now Japan is experiencing a labor shortage, so there should be plenty of openings to choose from for those who quit there jobs, and look for other jobs.

Companies are in a race to hire the best or just to hire enough workers for their company. They have to increase their wages to entice new workers and also improve their benefits, and provide a better work-life experience for their workers.

The challenge, these days, with many companies, is they need to cater to the younger workers to get them to work for them, if they are a traditional Japanese company.

The generation Z workers are not going to do what their parent did in the companies, work long hours or even work on weekends. This is a new era and companies, as much as possible, need to transform into a 21st century company and not a 1950's style company.

There have been past articles suggesting than younger workers are leaving their jobs soon after being hired because they don't get along with the company managers. That can be a two-way street as both sides need to adjust to each other, as managers need to understand the younger workers, and the younger workers need to understand more fully their responsibilities in the company.

The jobs availability ratio doesn't really show the real picture, but maybe it is. For example, is the 124 jobs available for every 100 job seekers just full-time jobs with good benefits, or does it also include part-time and contract jobs which don't provide the same benefits.

Also many service type job, now, to reduce costs, only hire or mostly only hire part-time workers as a way to maintain their profit margins, as service-type companies usually have very thin profit margins and can't afford to have a lot of full-time workers.

Again, Japan is experience a labor shortage in many sectors and the situation doesn't change it could get worse. 

But one thing that can be improved on is getting rid of the mandatory retirement age of 65 as many older workers in Japan want and need to keep working, but Japan seems, like South Korea, seems to be stuck back in the 20th or even the 19th century and maybe they think older workers can't do the work or are not very productive.

In reality, many older workers are more responsible compared to the younger generation of workers, as they come to work on time, they do what they need to do and don't complain about the work, compared to some groups.

Keeping older workers in the workforce, who those who want and need to work also will help with the social security or pension system and those who continue to work pay into the system and will not receive any benefits until they leave.

Companies can also develop a different pay system for older workers who reach a certain age, which keeps them in the company and companies will not suffer labor shortages or as much.

Have a nice day!

Japan Industrial Output: Updated September 4, 2024.

 

Japan industrial output in July up 2.8% on chip equipment rise

Article Source:  https://mainichi.jp/english/articles/20240830/p2g/00m/0bu/020000c

Ideas:

Japan might follow the industrial output more closely than other countries as manufacturing is still a major sector in the Japanese economy.

While 102.8 is still good its shows a trend of decrease of 4.2 decrease in June in manufacturing in Japan, which might have been attributed to the Toyota situation.

Japan is still playing catch-up with Taiwan and South Korea related to the semiconductor sector global race, as Japan has fallen significantly behind its two main rivals.

"Fluctuating indecisively" might the an understatement as the Japanese manufacturing sector as been up and down for many years due to the pandemic and the the global semiconductor shortage that hit global supplies significantly.

Yes, a an optimistic view at this time might not be correct but improving might be a better description of the manufacturing industry at this time.

Then, recently this year, there was the Toyota Motor Group situation which shutdown production at Toyota and other car companies that used fake data.

All sectors don't grow at the same speed, as some grow faster than others and some might decrease from quarter to quarter.

The industrial sector is a mixed bag of many different companies as sub-sectors as again, they are not all the same and they have different situations, different customers, different material needs and so on.

But again, as Japan is heavily focused on manufacturing and production, they watch all of the sub-sectors very carefully and they all contribute one way or another to the economy.

The index for industrial shipments is good as anything over 100 is a good number. For inventories, its seems good too, but need to be watched carefully as whenever there is a significant increase in inventories might mean demand is down, and or production estimates were not estimated correctly, leading to an increase in inventories.

Again, most of the time, manufacturing will have some up months and then some down months for a number or reasons, so possible decrease in September should not be a surprise.

And yes, Typhoons in Japan has significantly affect production as again Japan is a major typhoon region, which means there are usually typhoons in Japan in August and September.

Have nice day!

Japan Government Economic View: Updated September 4, 2024.

 

Japan gov't raises economic view in Aug. for 1st time in 15 months

Article Source:  https://mainichi.jp/english/articles/20240829/p2g/00m/0bu/045000c

Ideas:

The Japanese government, like all governments, want to show a positive view of its economy, and with good reason, as citizens begin to feel better about the economy, and don't want to hear gloom and doom, they might begin to spend in the economy and do things that lift up the economy, and Japan is no different than any other country in that regard.

"Recovering at a moderate pace", again, is a positive take on the economy, while later is says "pausing" which might lean more toward what is happening.

Especially now, during the extreme hot summer heat wave, consumers might not be spending as much or doing as much outside. 

Another article has suggested that once the temperature gets above 35 C that consumer spending goes, down, while usually in the summer  consumer spending increases.

To be fair, economies don't always grow in a linear fashion or always upward, and the Japanese economy is no exception as in the past there have been periods of up and down.

While the 3.1 percent growth for the April-June period is very good, the next quarter might  be so good or even much less than hoped for or expected, as, again, the summer heat wave might be limiting consuming spending.

There is also the Obon summer holiday period in Japan, which might or might not be as robust as previous years, and again the summer heat wave, and the current typhoon season might hurt the Japanese economy.

Amy growth or increase in consumer spending is good in Japan, as Japanese households usually don't spend like US consumers.

Consumer spending or private consumption, while maybe 50 percent of Japan's GDP is always a challenge, as Japanese consumers don't spend up to the potential of the Japanese economy. That might be a good thing or not a good thing, as Japanese consumers, for the most part, tend to be more savers than spenders.

The Japanese car industry, is a major economic driver of the Japan economy. An economic driver is anything that significantly increases economic growth. 

While the Toyota group situation, the fake testing situation, might have caused some pause in production, there is just too much demand for Toyota cars for the fake testing situation to cause that much harm.

The extreme heat can be both a positive and a negatives, as again, anytime the temperature gets above 35 C consumer spending or activities outside might be reduced.

But,yes, AC's saw a huge demand and or course the Paris Olympics helped the sale of TV sets in Japan, like almost all countries.

Outbound travel, or travel by Japanese travelers overseas have been hit with the weak Japanese yen, which makes the US dollar or the Euro much stronger, which means the purchasing power of Japanese travelers is much weaker.

Housing construction, being "almost flat", means it probably is not going to improve that much now or in the future, and for the most part, inflation is still a challenge in the Japanese economy, which means maybe home buyers are not that interested at this time.

If the Japanese government, again, doesn't say anything negative, it might mean several things, such as they don't want to say anything not so good as this time, and just maintaining the current position and or in a waiting situation or sectors to improve and then say something positive about the Japanese economy.

The global economy is always in a state of flux as not all countries grow or change the same, so its normal to say possible signs or pause in some areas.

The global economy is like a country with many different sectors in a market economy, and they all don't change or grow the same, as some improve while some don't improve, and its the same with each country's economy.

Have a nice day!