Tag Archives: Japan Economy

Abenomics and Abe Shinzo: the new relationship

Abe Shinzo (安倍晋三) is the man saving Japan. The Bank of Japan recently stated that Japan’s economy was ‘recovering,’ a better outlook than its previous, ‘the economy has been picking up.’ Abe’s policies, dubbed Abenomics, rely on strong approaches to the Japanese economy than his former predecessors took on by easing  the Yen’s price, which is currently trading at $1 to 100円, to encourage foreign investment and greater exports from Japan.

Investors are more or less weary about Japan’s current bond repurchases and interest payments, but has not raised alarms unlike the market’s reaction to China’s regulation of money lending between its banks to discourage “bad” or robust loans. The country’s current hurdle, among others, is its declining rapid birth rates. As the older population reaches retirement the pool of new workers is shrinking, which is a disadvantage considering the workforce China can dip into.

In his latest interview with Foreign Affairs Magazine, Abe revealed that his 3 main concepts for Japan are openness,challenge, and innovation. Abe’s strategies, luckily, are rewarding both his party the Liberal Democratic Party and Japan. Recent election results show that the new seats will give the Liberal Democrats control of the Upper and Lower house in parliament, creating a monopoly Abe can use to pass policies quicker without much interference from other parties. This election demonstrates the mounting public support for Abe’s plans that has set Japan on a tentative recovery after receding into the background for two decades. However, Abe faces obstacles, most notably his public remarks on comfort women for Japanese soldiers during its South Korea and China invasion. He has played down his critic’s accusations of wanting to rewrite history to portray Japan in a better light during its invasion. Abe argued that each country depicts its history differently. The United States, for instance, sees its Manifest Destiny history a progressive necessity, but American-Indians still view it an unjustified forced takeover of their lands and homes.

In part to the new policies, Japan has been aggressively pushing its influence alongside other Asian countries in to former Myanmmar (Burma) after the United States lifted trade embargos on the country. Abe met with president Thein Sein in June to unveil a charitable financial and investment package to demonstrate to the newly democratic country that Japan wants a consolidated economic relationship between the two countries. Japan has pledged to Burma $51 billion Yen ($498.5 billion dollars) along with $176 billion in debt forgiveness that doesn’t include the $300 million yen write off from April. Japan will also build a cheap labor industrial force in Thilawa, a port city on the Indian Ocean, to facilitate both Burma and Japanese exports, adopting China’s direction.

China is also entering Burma, or has been for some years, because Burma offers up untapped precious natural resources, an outlet for the country’s exports and a growing middle class tourist industry. China has criticized Tokyo for its expansion into the region, which it feels is a joint plan with the United States to hinder Beijing’s economic growth. Abe has boosted monetary policies, heavy government spending in forms of stimulus packages, and pro-growth movements. Now it remains if they will yield economic development for Japan or falter. Whatever the outcome Abe Shinzo is on a roll.

Japan Central Bank Says Economy Recovering

Three months into Japan’s bid to reinflate its economy after years of falling prices, the country’s central bank said on Thursday that economic conditions were starting to recover, signaling its confidence that the world’s third-largest economy was on the cusp of a long-awaited turnaround.

It was the first time since January 2011, before Japan’s natural and nuclear disasters in March that year, that the Bank of Japan had ventured to use the word “recover.” The bank’s message was underpinned by a rebound in Japan’s mainstay exports, helped by a weaker yen, and some signs of a broader recovery in consumer spending.

Reflecting its optimism, the central bank’s policy-setting board left its monetary policy unchanged and stuck to its goal of hitting 2 percent inflation in two years. To get money flowing again in the Japanese economy, the bank, led by its governor, Haruhiko Kuroda, has pledged to pump 60 trillion to 70 trillion yen, or about $600 billion to $700 billion, into the economy annually.

Read the rest of the story: Japan’s Economy on Road to Recovery, Central Bank Says.

Can Japan spend it’s way to a brighter future?

Daisuke Horii just collected his summer bonus. It was only slightly more than last year, but enough to compel the 34-year-old shopping mall clerk to Tokyo’s electronics district to look for some high-end speakers.RelatedIn Japan, Prices Stabilize for the First Time in Months June 28, 2013Enlarge This Image Ko Sasaki for The New York TimesA shopper, left, and a clerk at Hankyu department store.

“Things are generally looking brighter, aren’t they?” Mr. Horii said, as he scrutinized, then dismissed, cheaper alternatives at the bustling Yodobashi Camera electronics store. The Bose ones he has his eye on, which he’ll hook up to his TV, go for about $400.

“I don’t really need it, but I want it,” he said. “A good economy means you can buy things you don’t really need.”

Read the rest of the story: Getting Japan to Spend.

G8 urges bank reform in Europe and Japan to fix budget

The euro zone came under pressure from other rich economies on Monday to press on with a banking union and Japan was urged to follow up on massive central bank stimulus with structural reforms and measures to tackle its budget deficit.

Leaders of the Group of Eight rich nations, which include Germany, France and Italy, said a further strengthening of the rules underpinning the euro zone, including moves toward a banking union, was “strongly needed.”

Euro zone finance ministers are due to discuss Europe’s banking union plans on Thursday ahead of a European Union leaders’ summit next week.

European officials are seeking to design a scheme to close troubled banks to complement a new system of cross-border supervision led by the European Central Bank from next year.

http://www.youtube.com/watch?feature=player_embedded&v=43mWdur46dU

Read the rest of the story: G8 urges Europe to move on bank reform, Japan to fix budget.

New Research States Japan Becoming Cheaper Place to Send Workers

Not only is Japan is becoming a cheaper place to swill your favorite sake, according to new research it’s also becoming a more affordable place for companies to send workers.

Thanks to its dramatic currency depreciation in recent months, Japan has started to shed its former notoriety as one of the priciest travel destinations on the planet. Between September and May, the Japanese yen plunged by around 30% against the U.S. dollar. Tourists have responded enthusiastically in droves, with the number of foreign visitors coming to Japan jumping 26% in March over the year before.

Likewise, human-resources consulting company ECA International said Thursday that for the first time in three years its research found that Tokyo no longer claims the world’s title as the most costly place in the world to send workers from overseas. This year, the city was overtaken by Norway’s capital of Oslo, and currently ranks as the sixth-most expensive location for expat workers in the world.

Read the rest of the story: Japan Becoming Cheaper Place to Send Workers.

Japan’s Abe Promises 3% Annual Increase in Japanese Incomes

Prime Minister Shinzo Abe pledged to raise incomes by 3 percent annually and set up special economic zones to attract foreign businesses in the third tranche of measures aimed at boosting growth in the world’s third-biggest economy.

Abe is also considering a push for public pensions and other public funds – a pool of $2 trillion (1.3 trillion pounds) – to increase returns by raising investment in equities, a government draft growth strategy showed, confirming a Reuters report.

The government will seek the view of experts and aim to reach a conclusion by autumn, the draft said. Still, such a move could face opposition from Japan’s risk-averse voters.

Read the rest of the story: Japan’s Abe targets income gains in growth strategy.

Japan forecast to see 2.5% GDP growth in 2013

Japan’s gross domestic product is estimated to grow 2.5 percent in price-adjusted real terms in fiscal 2013, the government said Thursday.

In nominal terms, GDP is projected to expand 2.7 percent, according to the government’s economic outlook for the year starting in April, adopted at the day’s extraordinary Cabinet meeting.

http://www.youtube.com/watch?v=HE0cMnYyXbY&feature=player_embedded

Bank of Japan, Kuroda faces tough choices

Elected prime minister for a second time in December, Abe has argued forcefully that the central bank is not moving quickly enough to stimulate Japan’s flagging economy. He favors aggressive monetary easing, and made that the centerpiece of his election campaign.

The idea is that further easing, combined with fiscal stimulus, could end years of deflation and coax the world’s third largest economy out of recession.

The strategy got a boost Thursday as Abe nominated Haruhiko Kuroda to succeed Masaaki Shirakawa as Japan’s top central banker.

http://www.youtube.com/watch?feature=player_embedded&v=wN6SvrIXwS0

Read the rest of the story: Bank of Japan, Kuroda faces tough choices – Feb. 28, 2013.

Abenomics: Japan Inc. Begins Reaping Benefits of a Weaker Yen

Japan’s major exporters are quickly reaping the benefits of a weaker yen, upgrading profit projections and inspiring confidence in the ability of a newly elected government and a more dovish central bank to steer the country out of two decades of economic malaise.

Toyota Motor Corp. underscored the new air of optimism on Tuesday when the auto giant hiked its profit forecast for the current fiscal year to a five-year peak. This followed similar upward revisions last week by Nintendo Co. and Japan Tobacco Inc. A weaker currency, coupled with a recent wave of cost-cutting in autos, electronics and other key sectors, signals a surge in profitability for Japan Inc.

In the markets, it’s being called “Abenomics,” named for the new Prime Minister, Shinzo Abe, who has taken his overwhelming victory in December as a green light to pursue an economic revival strategy centred on massive infrastructure spending, more debt financing and monetary policies designed to depreciate the currency and put some inflation back into the deflation-prone economy.

Read the rest of the story: Japan Inc.’s appreciation of the yen’s depreciation.

http://www.youtube.com/watch?v=SJBu3DBZgno&feature=player_embedded

Japans rebounds as does it’s economic growth

Machine orders inched up 3.9%.

According to DBS, growth data finally showed a sign of improvement. November’s machine orders increased more than expected by 3.9% MoM sa.

This came on top of the 2.6% rise in October, and largely offsetting the declines in early-3Q. Thanks to the recent rebound, machine orders have risen to approach the levels in mid-2012 (before the economy slipped into technical recession), albeit still lower than the peak levels seen in 2Q12.

Indeed, the global economic environment is improving thanks to the recovery in China and stabilization in Europe. Domestically, based on the twin easing of fiscal and monetary policies and the depreciation of the JPY, the short-term growth outlook is also turning positive.

Read the rest of the story: Japans economic growth finally makes a rebound.