business

Japan's households tighten purse strings as sales tax, typhoon hit

33 Comments
By Kaori Kaneko

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33 Comments
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Don’t worry, the government passed another economic stimulus package!

11 ( +12 / -1 )

All expected, and Abe still does not understand the spending habits of the people here. THAT is the problem!

He has been a failure!

16 ( +18 / -2 )

Japan is the most indebted nation in the world...

7 ( +9 / -2 )

Japan is the most indebted nation in the world...

No it isn't. In fact, it's the world's largest creditor nation. And the money Japan borrows is its own, which it has the sole authority to issue. And over 40% of the current outstanding debt is held by the BOJ, a public sector institution. Nothing wrong with any of that!

-10 ( +6 / -16 )

Looks like Abenomics is really beginning to kick in!

Well done, Abe!

10 ( +12 / -2 )

Japan is the most indebted nation in the world...

but the world's largest creditor nation.

1 ( +9 / -8 )

Japan's households tighten purse strings as sales tax, typhoon hit

but

Real wages adjusted for inflation, meanwhile, edged up for a second straight month in October

-12 ( +2 / -14 )

Don’t worry, the government passed another economic stimulus package!

ROFL! Nice one chip!

All expected, and Abe still does not understand the spending habits of the people here. THAT is the problem!

> He has been a failure!

exactly!

7 ( +8 / -1 )

He has been a failure!

but

Real wages adjusted for inflation, meanwhile, edged up for a second straight month in October

and

Unemployment is 2.4%

That is failure?????

-15 ( +3 / -18 )

No it isn't. In fact, it's the world's largest creditor nation. And the money Japan borrows is its own, which it has the sole authority to issue. And over 40% of the current outstanding debt is held by the BOJ, a public sector institution. Nothing wrong with any of that!

@ Jeff Lee - wise words. Almost ALL Japanese debt is held in Japan. Therefore paying it back will never be an issue. As you brilliantly state, Japan can issue money through the BOJ to service debt any time they please.

But ignoramuses will keep stating that "Japan is crippled with debt" or such nonsense. And by the way, after the annual bonuses are paid out, consumer spending will pick up. And with the Olympics just around thr corner, things will be ticking along nicely in 2020.

-11 ( +2 / -13 )

This is something expected,after all things didn’t change that much from the feudal era.

The mass still must take everything that their warlords throw on them and suffer in silence “gaman”

8 ( +8 / -0 )

Japan is the most indebted nation in the world...

That's not necessarily true. It may have the most indebted government, but that is not the "nation". As should be more obvious in this country than any other one, the government has its own currency and a printer for it.

How indebted the "nation" is also depends on private assets and private debt. People with private debts do not have a money printer. All the simple analysis about "paying your debts" as a household applies. It does not apply to the government. In general, private debt in Japan is low. Japan's per capita personal debt relative to GDP has fallen in the last twenty years. In countries with real estate booms, like Australia, it has skyrocketed.

https://en.wikipedia.org/wiki/List_of_countries_by_household_debt

2 ( +2 / -0 )

You're gonna see the crisis. It has just started. These folks really do not get it... If they want money, they need to get it where it actually goes... on fat stipends not on daily consumption. Particularly in a consumeristic place like Japan. I myself even changed supermarket because I found myself spending about 300-500 yen more for daily groceries... which is unbearable. Many shops like restaurants act also badly, having applied a 10% over the previous price, which was already including 8% tax, so instead of paying a 2% more you are actually paying more than 10% now.

8 ( +8 / -0 )

kurisupisu

“Japan is the most indebted nation in the world”

Indebted to whom? Japan is not indebted to other countries. All government debts are in the Japanese yen, which the government can issue when it wants to. Government debt equals private sector assets.

-4 ( +2 / -6 )

Wow- what an amazing surprise. It's almost as if Abe doesn't know or care what he's doing.

And why should he? He could wipe his diseased backside on a bundle of cherry blossoms and the locals would vote him back in by a landslide.

Wake up, Japan - the LDP doesn't give a toss whether or not you and your families suffer, and they won't as long as you view grinning and bearing it as a duty.

The Japanese electorate is like an abused wife. Still making excuses when her layabout husband beats her up and takes her money.

9 ( +10 / -1 )

Some people here are still daydreaming! Where have salaries increased? And concerning the debt. . . Make yourself wise and smart! Printing money is easy, getting all those promises achieved another topic. Abe and his buddies got it made. What do they care!

9 ( +9 / -0 )

Abe and all are not expecting the consumers in Japan to increase their spending, after all the population is declining. The government more likely has their sights looking at all the rich visitors coming for the Olympics and wants to tax them.

1 ( +2 / -1 )

All expected, and Abe still does not understand the spending habits of the people here. THAT is the problem!

I think Abe and LDP understand it quite well..its just they don,t give a toss about average Taro& Keiko and their daily struggles. As long as they, their families, cronies and the special interest groups that get them elected ( ie J-Inc and farmers) are given taxpayer handout bribes ( oh sorry I mean growth stimulus measures) to ensure LDP re election , nothing else matters.

Unemployment is 2.4%

That is failure?????

With J population decreasing at an ever accelerating pace and proliferation of pathetically paid part time jobs on minimum wages clearing 10 man or less per month , Mickey Mouse in charge could achieve same unemployment numbers. No, actually Mickey would probably do way better.

10 ( +10 / -0 )

This is something expected,after all things didn’t change that much from the feudal era.

The mass still must take everything that their warlords throw on them and suffer in silence “gaman”

Seriously. Only instead of impoverishing the people by demanding ever increasing amounts of the rice they worked hard to grow, the elites are now impoverishing the people by demanding an ever increasing amount of the income they worked hard to earn. As in the past, only the well-connected can get lucrative jobs and some of that “money from heaven”.

The only thing different now is the fealty money, demanded by, and paid regularly to the USA.

2 ( +2 / -0 )

In the past year I let my car go to avoid shakken (150,000 yen), car tax (35,000 yen), still using 7 year old laptop with few broken keys (bough a 1000 yen USB cabled keyboard), 7 year old printer, and still using 20 year old couch. For me the problem is kid going to college and Japan offers no financial aid. I have to pay cash after taxes and nothing is left.

Regarding, government debt, most of the US debt is also domestically held but Jeff Lee and others somehow overlook that and praise Japan for near insolvency because the people who will get screwed when Japan's printing press overheats are Japanese themselves. The fact that 20-30% of US debt is internationally held is a good thing in my opinion because those stakeholders provide pressure for the US to control spending. Japan seems to have no stakeholder watching the printing press. I cannot see how this can end well.

4 ( +4 / -0 )

No it isn't. In fact, it's the world's largest creditor nation. And the money Japan borrows is its own, which it has the sole authority to issue. And over 40% of the current outstanding debt is held by the BOJ, a public sector institution. Nothing wrong with any of that!

The BOJ is not a "public sector institution", it's a quasi-governmental corporation owned by private interests, but it does have the power to manage (and manipulate) the currency, money supply, interest rates etc. The BOJ issues 'money' (computer entries on their ledger) on receipt of bonds from the government. Unfortunately only the principal is created, not the interest (usury) which the tax payer is forced to pay back through legislation, the threat of force (prison) and ignorance of who creates money and how.

The big secret is that the government can create the money themselves at zero interest but they were bought and sold for a long time ago, as with all other countries with a central bank. So, there is a lot wrong with all of that! ... and it's the main reason for this mess as the fiat currencies reach the end of their life spans.

1 ( +4 / -3 )

Unemployment is 2.4% That is failure?????

If you believe the numbers the government puts out regarding unemployment statistics you have a serious problem with reality. Japan calculates these numbers like no where else on earth, as these numbers do not include those who are not actively looking for work, and they also include the numbers regarding people who are underemployed or are only working 1 to 2 hours per week.

1 hour per week is considered "gainfully employed" according to how statistics are taken.

So yeah, it IS a failure, because the odds are the real numbers are probably double this!

7 ( +7 / -0 )

Yubaru - well stated.

And in addition, as has been mentioned 1,000 times before - the aging society coupled with the hollowing out of young society has created an extra-ordinary demand for workers.

Getting some kind of employment is not difficult.

The 2.4% card is played for learners.

2 ( +2 / -0 )

A good sign of when government is not in touch with the people. The 10% is just more weight on the burden the people already carry. One can only carry so much on their backs. This article only proves it with the numbers which IMO are opinion are padded and not really what is felt by the people. Every yen spent is getting tightly controlled just to stay ahead of homelessness. Many households are working 2 -3 jobs and in each family it is still barely keeping heads above water. That is reality that government is not monitoring or just cares about its own group affairs. This is why we the readers are starting to see more and more complaints about how government is wasting and just abusing the money they spend.

4 ( +4 / -0 )

So yeah, it IS a failure, because the odds are the real numbers are probably double this!" 4x to 5x is probably more accurate, with almost 40% being underemployed or not in full time employment, which is not reflected - nor are the numbers for those no longer seeking work, those over 65 in a country where workers regularly drop in harness... so you know those figures have been massaged like a cow from Kobe.

2 ( +2 / -0 )

If you believe the numbers the government puts out regarding unemployment statistics you have a serious problem with reality. Japan calculates these numbers like no where else on earth, as these numbers do not include those who are not actively looking for work,

Neither does any other country included those who are not actively looking for work, If it is 4x to 5x in Japan than it is probably 10x to 20x in the west.

-5 ( +0 / -5 )

If you believe the numbers the government puts out regarding unemployment statistics.

Interesting. Why the stats are bad as in this case of consumer spending, you want to believe the government stats, but when the stats are good are in the case of wages and unemployment you have problem with the stats.

The facts are that the Japanese government calculates both consumer spending data and unemployment data. Both are reliable.

-3 ( +1 / -4 )

I notice Taro Saito didn’t come out in October to say the sales tax hike is benefiting consumption, just concentrate on the negative to squeeze yet more from the public purse. Any policy change or sales will just pull forward expenditure with consequent following dip. The sales tax encouraged people to bring forward purchases they would have made later and some might have made purchases they otherwise wouldn’t have. The obsessing over marginal shifts in data over short time periods is both misleading and unhelpful. The long term trend is of greater importance but that as the old saying goes doesn’t sell papers.

There are economic pressures across the globe and household expenditure has limits, exacerbated by credit, which again merely pulls forward expenditure leading ultimately to retraction. So where is the surprise in any of this except to the economically illiterate (like most politicians).

2 ( +2 / -0 )

For me the problem is kid going to college and Japan offers no financial aid. I have to pay cash after taxes and nothing is left.

Did anybody force you to have a kid? Stop moaning, and take responsibility for your actions.

-4 ( +1 / -5 )

Interesting. Why the stats are bad as in this case of consumer spending, you want to believe the government stats, but when the stats are good are in the case of wages and unemployment you have problem with the stats.

Dont put words into my mouth that I never said! I trust no stats that the government puts out, that are not verifiable through a third party!

Neither does any other country included those who are not actively looking for work, If it is 4x to 5x in Japan than it is probably 10x to 20x in the west.

On this you are wrong! The US calculates the number of "discouraged workers" into it's statistics monthly! Discouraged workers are workers “discouraged workers,” those who have stopped looking for work because current economic conditions make them think that no work is available for them.

Japanese government statistics should be taken with a grain of salt, particularly with unemployment!

https://courses.lumenlearning.com/boundless-economics/chapter/measuring-unemployment/

1 ( +1 / -0 )

Did anybody force you to have a kid? Stop moaning, and take responsibility for your actions.

Am I moaning? I explained the reason I have no extra money. If everyone thought like you society would collapse.

0 ( +1 / -1 )

In the past year I let my car go to avoid shakken (150,000 yen), car tax (35,000 yen), still using 7 year old laptop with few broken keys (bough a 1000 yen USB cabled keyboard), 7 year old printer, and still using 20 year old couch. For me the problem is kid going to college and Japan offers no financial aid. I have to pay cash after taxes and nothing is left.

One, if you are paying 150,000 for shaken you are getting ripped off! Whomever quoted you that, means that they are changing all the parts required in the shaken, whether they need to be changed or not!

You CAN get financial aid as well for Japanese Universities! We do for our youngest as well, along with very low interest loans as well. (Roughly 2% interest)

You have PLENTY of options!

Go through this site! Low and middle income families can get grants as well!

https://www.jasso.go.jp/

1 ( +1 / -0 )

The BOJ is not a "public sector institution", it's a quasi-governmental corporation owned by private interests,

This is not accurate. The majority, and thus controlling, ownership stake in the BOJ is in fact the government of Japan.

0 ( +0 / -0 )

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