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Japan factory output tumbles as trade war bites

23 Comments
By Leika Kihara

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Yet, with robust domestic demand making up for weak Japanese exports, 

Pray tell, just what "robust domestic demand" are you talking about here? Oh the "bump" before the consumption tax increase.

many BOJ officials see no imminent need to ramp up monetary support, and prefer to save its limited ammunition for when the economy faces bigger problems, sources with its thinking have said.

Right for around November of this year right?

5 ( +7 / -2 )

For every action ?........

3 ( +4 / -1 )

Yet, with robust domestic demand making up for weak Japanese exports, many BOJ officials see no imminent need to ramp up monetary support, and prefer to save its limited ammunition for when the economy faces bigger problems, sources with its thinking have said.

Is the robust demand due to bonus payments in june and july or the rush to buy due to the anticipated increase in consumption tax?

Around me I don't really see people spending but if indeed there is robust demand as claimed, for how long will last, not past october I guess.

3 ( +4 / -1 )

The only people I see spending these days are foreign tourists, whom locals chide, and locals whose appliances have outlived their eight-year shelf life because companies like Panasonic have resorted to making inferior products to get you to buy new ones rather than replacing the parts which suddenly "they don't have anymore". Got a bit of mechanic blood in me, fortunately, so fixed my washing machine myself.

In any case, clearly Japan is suffering from the trade war and their own protectionist measures. Things with SK won't help that, but being Japan national pride (ie. weakness and victimhood) will take precedent.

11 ( +14 / -3 )

I don't think that the disagreements between the US and China are a major factor.

Japan hit it's own self-destruct button a few years ago.

8 ( +11 / -3 )

”....taking a toll on (Japan’s) export reliant economy”

At only around 16%, Japan’s exports to GDP ratio ranks 4th lowest behind the US, India, and Belgium as the LEAST export reliant economies among the top 25 globally.

https://en.m.wikipedia.org/wiki/List_of_countries_by_exports

5 ( +5 / -0 )

Interesting. Today, the unemployment rate fell and:

The number of people in work hit a record 67.47 million in the reporting month, with that of women topping 30 million for the first time since comparable data became available in 1953

-4 ( +5 / -9 )

@smithinjapan, just remember that if the change rate drops any more the amount of tourists will drop as well, then the shops will feel the impact from that.

1 ( +2 / -1 )

In this year the yen has dropped from 145/150 yen down to todays rate of 131.

3 ( +4 / -1 )

Idiotic The "Sinz" has been talking adnausaum about free trade all year yet imposes a trade ban? Now the economy is tanking further. Japan's economy has been bolstered by government hand outs (tax payer money) yet 60% of the economy is domestic. Now with a new tax rise on the domestic economy coming.....don't really see happy days ahead.

2 ( +4 / -2 )

@alwaysspeakingwisdom

I've literally just read (in the late edition of the Asahi Shimbun) that the MHLW has announced that the openings ratio has worsened for the second month running.

2 ( +3 / -1 )

hmm. and tax rise coming, 15k losing jobs at Nissan, but the yen exchange rate stays at 108ish indicating fixed global monopoly rates by banks. Best is yen rate at 112 to US dollar.

3 ( +5 / -2 )

Then this justifies $1.00 to ¥150

1 ( +3 / -2 )

@rgciv....¥150 =$1.00 for reality.

1 ( +2 / -1 )

Low jobless rate in Japan is not because of good economy but because of decreased population and retirement of aging workers.

7 ( +8 / -1 )

In this year the yen has dropped from 145/150 yen down to todays rate of 131.

What rate are you talking about? This makes no sense! If you are talking about the $$$$ you are far off the mark!

0 ( +0 / -0 )

Willing to pay a price in the short term to get S. Korea to keep a promise, deal made, aggrements signed.

-1 ( +1 / -2 )

what would South Korea have to do for Japan to return to business as usual? There are four steps that South Korea would need to take, each demonstrating the liberal Moon Jae-In administration’s commitment to taking Japan’s concerns about the bilateral relationship seriously. First, at the most basic level, Moon and the progressive left have to stop using historical issues as a contemporary political issue. Moon needs to demonstrate the kind of leadership Kim Dae-jung did in 1998, publicly committing to a “forward-looking relationship.” Second, Moon’s administration would have to accept the binding nature of the 1965 normalization.

Third, regarding the court decision on individual victims of forced labor, the Moon administration can accept the legal process as having been completed, but make the political decision to not enforce the decision, to protect Japanese company assets in South Korea from expropriation. Moon can make this decision on the basis of South Korea’s “national interest” in maintaining positive relations with Japan. Fourth, South Korea can withdraw the WTO caseand make a commitment to addressing Japanese concerns about sensitive materials reaching North Korea via South Korea.

None of these steps will be easy for the Moon administration. But that is the point for Japan – Japan wants a costly signal from Moon. Without excusing Japanese colonial and wartime atrocities, one can recognize that Japan’s postwar conservative leaders have made costly decisions for the sake of maintaining positive relations with South Korea. Conservative Shinzo Abe chose not to revise the Kono Statement, and it was Abe’s government that negotiated the 2015 “comfort women” deal. The deal Abe reached with former President Park Geun-hye may not have gone far enough to please all segments of the South Korean population, but it also went farther than it would have pleased Japanese conservative nationalists to go.

Japanese conservatives are getting tired of reaching deals with South Korea and then having them unilaterally reinterpreted, as in the case of the 1965 normalization, or abrogated, as with the 2015 “comfort women” deal.

To understand why a free trade-dependent, rules-upholding country is apparently willing to undermine the rules of free trade with one of its most important trading partners, it may be useful to divide rules, norms, laws, treaties – the “stuff” of international order – between the content of what they regulate, e.g. trade, and the attributes that make them meaningful, e.g. mutual acceptance, reliability, and finality. In an ironic twist, Japan is using a particular subset of international rules, norms, laws, and treaties (specifically regulating trade) to fight for a common understanding that rules, norms, laws, and treaties (but especially those concerning historical issues) ought to be mutually accepted, reliable, and final once signed.

Even if the agreement reached in years or decades prior is not the preferred agreement of the current generation, there needs to be an acceptance of those agreements as constituted.

-3 ( +1 / -4 )

In this year the yen has dropped from 145/150 yen down to todays rate of 131.

What rate are you talking about? This makes no sense!

The yen rose to ¥131 to the £ today. Or to be more accurate, the £ continued its headfirst plummet over the Brexit cliff.

Before the 2016 referendum, it was ¥180~190 to the £.

4 ( +4 / -0 )

The proverb goes,One dig a hole and bury oneself. Such waste of time and sadness created by Japan.]

1 ( +1 / -0 )

@AlexBecu

what would South Korea have to do for Japan to return to business as usual?

Nothing. Koreans plan to wait out until Abe san's gone and negotiate with a more reasonable PM with common sense. And take Japan to WTO.

In the meanwhile, Samsung just certified a domestic Hydrogen Fluoride supplier and will switch to this vendor from September. SK Hynix will switch to inhouse sourcing from 4Q2019. Bye bye Japanese Hydrogen Fluoride.

Third, regarding the court decision on individual victims of forced labor, the Moon administration can accept the legal process as having been completed, but make the political decision to not enforce the decision,

That's not how a court judgement works.

A court judgement MUST BE ENFORCED in a country with rule of law.

Moon can make this decision on the basis of South Korea’s “national interest”

This may work in Japan where the court plays second fiddle to the PM, but not in Korea with a clear separation of power.

None of these steps will be easy for the Moon administration.

It is not easy, it's UNCONSTITUTIONAL.

2 ( +3 / -1 )

The yen rose to ¥131 to the £ today. Or to be more accurate, the £ continued its headfirst plummet over the Brexit cliff.

Thank you for including the pound mark there! Makes things easier to understand!

0 ( +0 / -0 )

@yubaru, sorry the British pound not dollar

0 ( +0 / -0 )

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