business

Japan logs ¥412.4 bil trade deficit in March on weak yen, soaring oil prices

14 Comments
By ELAINE KURTENBACH

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These figures gleaned from websites here and there have little meaning for those of us actually living in Japan.

Since I avoid eating Big Macs, then comparing those costs country by country (who eats Big Macs everyday?) means nothing.

Try comparing decent food ie vegetables and fruit and meat for example?

A decent (very small) Japan produced steak is 1000-2000 yen.

Paying 130 yen for a potato in Japan isn’t much of a bargain (over a US dollar) as that is what I ate and paid (partly) for my lunch last week.

To add a coat of paint to the house roof would be over a million to two million (small house) yen.

Refurbishing one tatami mat is 10,000 yen.

Then add 8-10% on any consumer food that has been imported and been through many hands, it all adds up.

1 ( +1 / -0 )

Here is the Big Mac Index 2022

USA $5.81

EU $4.95

UK $4.82

Japan $3.38

While people in many other nations are losing buying power of their currencies everyday, people in Japan are enjoying stability of their currency.

Why don't you compare the average wage growth ove the last decade or two in Japan vs the West. Gives a bit of a different picture.

-3 ( +1 / -4 )

Japan doesn't add energy and food cost to the inflation rates.

The US doesn't either for its core CPI. The US core CPI was 6.5% in March, Japan 0.8%. Big, big difference.

1 ( +1 / -0 )

JeffreyK

I manufacture my products in Japan with materials bought from outside Japan...

It's tough time for importers and good for domestic producer when the currency is weak because it is obviously easier for people to buy domestically produced products than buying from abroad.

It is a good time for domestic producers, who are more competitive. But when the currency becomes stronger, the opposite situation occur.

To avoid risk of currency exchange volatility, Japanese automakers have moved some factories overseas, having factories on both sides.

-1 ( +0 / -1 )

bokuda

Japan doesn't compare to modern countries because Japan doesn't add energy and food cost to the inflation rates.

No. You are confused. You are mixing up CPI and Core CPI. When you compare inflation rates of different countries, you do not mix up these two.

Here is the source of the comparisons. It compares CPI (not Core CPI).

https://worldpopulationreview.com/country-rankings/inflation-rate-by-country

Now, there is an important reason for using Core CPI sometimes. (Hence your confusion.)

Here is one reason for using Core CPI:

(1) CPI is the consumer price index. A measure of the cost of living for the typical person.

(2) Core CPI is the CPI – energy and food prices.

Energy and food prices are removed because they have tendency to be highly volatile.

This clearly has policy implications. If we look only at CPI, monetary authorities may be inclined to change interest rates more frequently. For example, in 2008, we had a rise in energy prices causing cost push inflation of 5%, a few months later we were in deep recession. In other words, CPI can give a misleading impression of underlying inflationary pressures. If you tighten monetary policy because of temporary food and energy inflation, you create the potential for slowing down economy. Similarly when there is a slump in energy and food prices, there is a danger monetary policy can become too lax, creating future underlying inflation.

https://www.economicshelp.org/blog/2587/inflation/difference-between-cpi-and-core-cpi/#:~:text=CPI%20is%20the%20consumer%20price,CPI%20%E2%80%93%20energy%20and%20food%20prices.

So, don't confuse CPI and Core CPI and use one or the other appropriately.

1 ( +1 / -0 )

I manufacture my products in Japan with materials bought from outside Japan so my costs have risen three-fold: 1. higher price of the materials/supplies themselves, 2. higher shipping cost 3. weak Yen

I'm in Japan so I sell in Yen, wherever the buyer is and whatever they use as their payment currency. "Repatriating foreign profits" means absolutely nothing to me and I'm sure that's the same for most small businesses based in Japan.

Now, in theory, my products might be a little cheaper at the moment for foreign buyers but as Japan Post is making sending things (i.e. orders) abroad nearly impossible that small window of opportunity is ramining firmy shut.

3 ( +3 / -0 )

Here is the list of inflation rates today of some developed countries

Japan: 0.9%

Japan doesn't compare to modern countries because Japan doesn't add energy and food cost to the inflation rates.

Compare Japan GDP to other countries is pointless.

-2 ( +2 / -4 )

Eastman

if we talk about cars prices in Japan went u some 20% at least some cases...

Here is the Big Mac Index 2022

USA $5.81

EU $4.95

UK $4.82

Japan $3.38

While people in many other nations are losing buying power of their currencies everyday, people in Japan are enjoying stability of their currency.

-2 ( +1 / -3 )

Eastman

if we talk about cars prices in Japan went u some 20% at least some cases...

Here is the list of inflation rates today of some developed countries

Japan: 0.9%

UK: 7.0%

Germany: 7.3%

USA: 8.5%

Spain: 9.8%

While people in many other nations are losing buying power of their currencies everyday, people in Japan are enjoying stability of their currency.

Making money abroad and spending it in Japan - that is the economic model of Japan today.

Japan is a better place to be in today.

-4 ( +1 / -5 )

socrateos

let me disagree with you as guy who deals with exports from Japan for a years.

that "boost" is just some random number but in fact no difference for foreign buyers.

if we talk about cars prices in Japan went u some 20% at least some cases even more so even rate for yen hovering around 128 and was say 118 final price is not lower at all yet exporter profits are "not boosted at all".

no "profits jumping" at all.

go back to school - better.

1 ( +3 / -2 )

Eastman

if you are talking about "fat profits" of exports you need to mention increasing of costs for freight so these profits are not fat at all...

Weaker yen is a boon for many Japanese manufacturing companies due to the fact that many Japanese manufacturers have moved their factories overseas for long time ago due to population decrease in Japan. Automobile makers, for example, make more more cars abroad than domestically. It is reported that more than 50% of Japanese manufacturers have oversea operations. Overseas profits get boosted when repatriated.

Toyota Motor Corp. on Wednesday reported a record net profit of 2.32 trillion yen ($20.10 billion) for the April-December period, up 57.8 percent from a year earlier, supported by a weaker yen as the automaker makes a gradual sales recovery from the coronavirus pandemic.

It put its assumed exchange rate for the U.S. dollar at 111 yen, higher than the 110 yen estimated earlier.

A weaker yen has been proving a boon to automakers as their overseas profits are boosted when repatriated.

Toyota's recovery was led by robust sales in North American and Asian markets, although the numbers have failed to meet pre-pandemic levels.

(https://english.kyodonews.net/news/2022/02/a1b7baf2d015-toyota-lowers-fy-2021-sales-outlook-on-semiconductor-shortage.html)

Two months later today the exchange rate is now 128 yen, so the Japanese companies profits jumped by 17 yen for each US dollar without any extra sales!

-3 ( +1 / -4 )

if you are talking about "fat profits" of exportes you need to mention increasing of costs for freight so thaese profits are not fat at all also goods in Japan /paid in JPY/ are more expensive than say one year ago...so there is no change in profits at all as foreign buyers still going to pay about same amount in USD or EURO like last year...

Japan way is way to nowhere...no idea what will be next...and money printers are working 24/7

2 ( +5 / -3 )

What matters is that everything is more expensive and wages are dismal!

3 ( +6 / -3 )

Doesn't seem a big deal. Imports, $65 bil., imports 68. The gap does contribute to the weaker yen, as Japan needs to buy $ in order to buy more expensive oil.

-2 ( +1 / -3 )

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