Japan says economy shrank in 1st quarter

Considering all the reports over the last few years on how the preparation for the Olympic Games would stimulate the Japanese economy, this is disturbing reading. I wonder what the figure would be without the effects of ultraloose monetary policy, negative interest rates and a construction boom.

The coming years will just have more of the same-the only way is....down (unfortunately)

"Abenomics" policies of Mr. Abe doesn't work because govt. money is used for waste, financial investments of no return. Scandalized money of no return. Still high risk and low return all those policies to transform step by step more poverty to Japan. This is not anymore a surprise Japan's economy shrinking. And "sontaku" going further to senior Japanese "senseis" purposes. What a world in this current time of Japan!?!

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Considering all the reports over the last few years on how the preparation for the Olympic Games would stimulate the Japanese economy, this is disturbing reading. I wonder what the figure would be without the effects of ultraloose monetary policy, negative interest rates and a construction boom.

That is an excellent point. Expect a really bad crash after the Olympics.

https://www.youtube.com/watch?v=7kFcDKBpdII

Here is a very good commentary by Kyle Bass: he explains why the Japanese economy is going to tank. really scary.

improvements in the labour market and upbeat business confidence

Are they talking about the same Japan?

Well Australia's economy grew 3.4% and that's not in the top five, the third biggest economy 0.3% and that's disappointing, Abenomics means what? Nothing. Best he and his gaggle eat hamburgers play golf and cease killing the workers with overwork. Never happen.

Seems like the island is getting smaller too.

Unemployement is very low, companies are recruiting and producing, so I guess the problem is people are not buying. And on top of that the government is preparing for the consumption hike ?

Abenomics, ladies and gentlemen.

[...with improvements in the labour market...]

Yeah, like 'improving' the legislation to get yet more unpaid work and self-sacrifice out of Japan's workforce...

Here is a very good commentary by Kyle Bass: he explains why the Japanese economy is going to tank. really scary.

Bass is predicting a Japan crisis for years and many experts disagree his analysis on Japan. Based on which knowledge is this a 'very good commentary' ? :)

Most of the “growth” created over the previous two years was from record levels of state spending (financed by record borrowing), and stock market returns pumped up by monetary easing and zero rates.

The only way for Japan to have growth is to liberalize it’s economy. That means to wrest control of the economy away from the LDP and Japan Inc.

I know it's gloomy news ladies, but surely things aren't that bad?

The contraction brings an end to a series of eight consecutive quarters of growth, a winning streak not seen since the heady days of the "miracle" boom of the 1980s when the Japanese economy ruled the world.

Lol, doing the same thing over and over and over and over again while expecting a different result. Pathetic to say the least.

analysts expect the economy to quickly recover, with improvements in the labour market and upbeat business confidence still intact.

These charlatans need to find new jobs. They're clearly failing at the one they're doing.

Aly Rustom

You will be rejoicing if Japan’s economy tanks.

Its domestic demand that lets Japan down. It is an exporting powerhouse with a great reputation when it comes to quality, but if you don't have a constant crop of humans which have to be fed, housed, entertained and in many other ways, satisfied, then its pretty hard to maintain decent growth rates.

Unfortunately robots don't earn wages and require all the things humans need for survival so you can't expect much of a pick up in demand from Japans growing and inevitable march towards robots and automation.

Well Australia's economy grew 3.4% and that's not in the top five, the third biggest economy 0.3% and that's disappointing, Abenomics means what? Nothing. Best he and his gaggle eat hamburgers play golf and cease killing the workers with overwork. Never happen.

3.1% YoY, 1% for the quarter and based far too heavily on mining for my liking.

Australia relies far, FAR too much on China

Does not engage anywhere near enough with S.E Asia. Australia's penetration into S.E Asian markets is dismal.

Has developed a worrying of trend of an agricultural export sector which is under-performing despite the enormous effort and government time into promoting it.

In saying all that, the fundamentals are better than pretty much every other English speaking Western country.

Matt Hartwell

Facts and figures are good and all, but don’t you think these guys would rather just make themselves feel better by saying its all Japan’s fault?

Facts and figures are good and all, but don’t you think these guys would rather just make themselves feel better by saying its all Japan’s fault?

I don't think its anybodies fault. Its the result of Japans demographics in combination with other factors like fairly low wage growth for many years and competitors that are becoming increasingly sophisticated in Japans neighborhood - S.Korea, China of course, even Vietnam. Its not entirely obvious to me that Japan can or should get off this low growth cycle through the most obvious method, mass immigration. We all know what has happened in Western Europe and to my mind, Western Europeans have far more experience with immigration than Japan and a culture that is perhaps more varied and open to it than Japan before it even begins. It is extremely easy to see that the Japanese reaction to mass immigration is more likely to be negative than positive. Japans homogeneity provides it with enormous strength as well as one or two weaknesses.

I can understand the reluctance from government and the people and even if Japan opened up significantly, the long work hours, the culture of overwork and wage levels that aren't particularly exciting are not going to entice many working age migrants among those with other options.

I can also tell you from the Australian experience, mass immigration does not give the boost in growth that people think it does and we have been doing it long enough, consistently enough and to such a large degree that I think we draw some conclusions. Up until this year, (predicted to drop 20k) we were taking record numbers for a few years and growth has barely ventured beyond 3%. Traditionally, that is below trend for Australia. Even when you go way back in time when we were taking much lower numbers of immigrants, there were many years growth was much higher than it is now. Immigration = no guarantee's of growth, at all.

From Trading Economics

"GDP Annual Growth Rate in Australia averaged 3.46 percent from 1960 until 2018, reaching an all time high of 9 percent in the first quarter of 1967 and a record low of -3.40 percent in the second quarter of 1983."

Certainly one short term solution that I think should be implemented is significant wage hikes. Japan Inc is relatively flush with money and even though wages are rising, its not fast or strong enough imo.

Also, a left field suggestion. You might be able to entice more immigrants if you offered some good deals on land in Japans many dying rural areas. I mean if Japanese aren't interested in that land or living there, I know many Westerners would be.

Unfortunately, it's not going to get much better without something giving....

Warren Buffet and James Dimon [ CEO JP Morgan & Chase] urge companies ending the practice of providing quarterly earnings guidance [ Q results] that give an 'unhealthy focus on short profits at the expense of long term results and economic strength'

https://www.wsj.com/articles/buffett-dimon-team-up-to-curb-unhealthy-focus-on-quarterly-earnings-1528387431

Something that governments should consider too. It may lead to more calmness among the population. More calmness for JT readers too :)

@Aly Rustom

Here is a very good commentary by Kyle Bass:

"good commentary" and "Kyle Bass" are 2 phrases that should never be in close proximity. I assumed his "short Japan" fund had already burned thru all its investors' cash by now, since not an iota of its premise has ever been shown to be, um, true.

Bass has staked a big part of his career for many years now on being wrong, such as how Japan would default or experience skyrocketing interest rates once Mrs. Watanabe stopped buying JGBs, to name just one of many of Bass' gems of knowledge.

Bass is predicting a Japan crisis for years and many experts disagree his analysis on Japan. Based on which knowledge is this a 'very good commentary' ? :)

I'll take his opinion over yours any day.

Bass has staked a big part of his career for many years now on being wrong,

He's made alot of money. Again, I'll take his opinion over any JP poster's thank you.

You will be rejoicing if Japan’s economy tanks.

Stupidest comment on this thread.

@Aly Rustom

He's made alot of money.

His Japan-shorting investors haven't. LOL.

'll take his opinion over yours any day.

You may want to check my past posts on the JT archive over many years to find that my outlook for the Japan economy has been nearly spot-on. Kyle's predictions: debt default, dollar at 200 yen, current account deficits, surging interest rates, etc. have been nearly all wrong...consistently and over many years.

Mind you, being correct isn't the strong suit of some people on this forum, is it. Damn the facts, it's the narrative that counts, right?

https://www.youtube.com/watch?v=a9O41o0-b7o

His Japan-shorting investors haven't. LOL.

Because people don't listen to him

You may want to check my past posts on the JT archive over many years to find that my outlook for the Japan economy has been nearly spot-on. Kyle's predictions: debt default, dollar at 200 yen, current account deficits, surging interest rates, etc. have been nearly all wrong...consistently and over many years

No need. I've read your posts throughout and I get your economic theories. Some I agree with and others I don't. Plus it isn't just Kyle Bass saying this. Other heavyweights as well have been echoing the same thing- and they have very different economic approaches than Bass- Peter Schiff, Gerald Celente to name a few..

And while I have serious problems with Schiff's neo liberal economics and Celente's eccenticism, when they alongside Bass echo the same concern, its time to sit up and listen. Now you may not agree and that's fine. There are many approaches to econ and finance. But what I really don't respect is other posters (not you) trying to spin this as Japan- bashing. I find it stupid and childish. But happy to debate you on this thread about economic theory as long as the posts stay cordial.

Thank you guys for your thoughts about the Japanese economy. Now it is time for the economist to speak.

First the causes of the downturn:

There were a lot of temporary factors, such as cold weather pushing up vegetable prices and turbulence in international trade plunged the nation's economy into last quarter's 0.2-percent contraction., which led to lower consumer spending.

Looking forward:

The Japanese exports are gaining momentum currently, whilst solid domestic consumption and warmer weather suggests the GDP growth rate is set to rebound this quarter, 

Ok guys! Don't worry about Japan.

Thank you for your respectful post.

your post makes sense if Japan is soley an agricultural society. Unfortunately It isn't. There are other factors.

And if we assess Japan's economy through an agricultural lens the future is very bleak indeed. Why? Because of the average age of the Japanese farmer.

However, that is not to say that what you said above doesn't have some merit. Unfortunately, yes, I worry deeply about Japan. I worry about my 2 1/2 year old boy and my daughter who is going to be born in less than a month. I worry about their future. I do envy you on your optimism. Unfortunately, I do not share it.

There are many approaches to econ and finance....

Yes, and some people quite often get it right, and others get it consistently wrong. Bass and Schiff are clearly the latter. In fact, they're beyond wrong. The real-world trends that occur after their predictions go in the OPPOSITE direction to what they predict: runaway inflation, bond crisis, skyrocketing interest rates, collapse of the dollar and or yen, QE turning major currencies into funny money, gold as a great investment in the QE era. Too many to list.

However, that is not to say that what you said above doesn't have some merit. Unfortunately, yes, I worry deeply about Japan. I worry about my 2 1/2 year old boy and my daughter who is going to be born in less than a month. I worry about their future. I do envy you on your optimism. Unfortunately, I do not share it.

A personal opinion based on a subjective view on Japan. Get over it !

Yes, and some people quite often get it right, and others get it consistently wrong. Bass and Schiff are clearly the latter. In fact, they're beyond wrong. The real-world trends that occur after their predictions go in the OPPOSITE direction to what they predict: runaway inflation, bond crisis, skyrocketing interest rates, collapse of the dollar and or yen, QE turning major currencies into funny money, gold as a great investment in the QE era. Too many to list.

It seems to be more like the fact that because these things have not happened you think that they don’t know what they’re saying or what they’re doing.

Like I said, Peter Schiff There’s not someone who I agree with. But Kyle best is. And no offense Jeff, but these guys are major heavy weights. And it’s not just them, there are others such as. Ed Harris And others who say the same thing. Do you remember just before the 2008 crash Bass warned about it. Nobody listened. The fact that what he’s saying hasn’t happened yet the way he said it’s going to happen doesn’t mean it won’t in the future

@Aly Rustom

> And no offense Jeff, but these guys are major heavy weights.

What do you think I do for a living? I get paid quite well to write about finance and economics in Japan. Anyway, If you invested with Kyle in 2012, you would have lost nearly 50% of your money. He has been wrong about just about everything for over a decade and his hedge fund has tanked even while the capital markets have soared.

"Kyle Bass - Troubling Times for his Strategy"

https://www.gurufocus.com/news/625349/kyle-bass-troubling-times-for-his-strategy

"Do you remember just before the 2008 crash Bass warned about it."

Here's my prediction: there will be a crash. "Could be days, could be months, could be many years." (Kyle's words) When it happens, feel free to return to his post and call me a genius.

Michael Lewis, author of "The Big Short," says Bass attended a presentation by Steve Eisman, and thought Eisman's ideas were solid and so put his money on Eisman's bet -- shorting the toxic MBSs. Good choice, but the bet wasn't his idea in the first place, despite what his promotion machine states.

Bass is always warning about crashes. Mostly they don't come true and he is wrong. The one time they do come true, that's all he talks about, giving the gulliable members of the public the impression he's some kind of oracle. That's how soothsayers and mystics operated in the medieval era. And how certain financial spivs operate today.

A personal opinion based on a subjective view on Japan. Get over it !

It is an objective view on Japan. The subjective view Is one brought out of emotion such as the right wing praising of Japan

Anyway, If you invested with Kyle in 2012, you would have lost nearly 50% of your money. He has been wrong about just about everything for over a decade and his hedge fund has tanked even while the capital markets have soared. 

Jeff he hasn’t been around for decades. Even you admit below

> "Do you remember just before the 2008 crash Bass warned about it."

Here's my prediction: there will be a crash. "Could be days, could be months, could be many years." (Kyle's words)

The thing of it is you can never actually ever completely predictable in a crash will happen.What he saying is correct the crash is coming but it could be anytime.

Michael Lewis, author of "The Big Short," says Bass attended a presentation by Steve Eisman, and thought Eisman's ideas were solid and so put his money on Eisman's bet -- shorting the toxic MBSs. Good choice, but the bet wasn't his idea in the first place, despite what his promotion machine states. 

First of all that’s hearsay. You don’t know if this is true or not. But let’s just assume for the sake of argument that it’s true. So what? It proves that bass Has the financial sense to able to recognize a good bet, take it, and run with it. That’s all. Doesn’t diminish his reputation

Bass is always warning about crashes. Mostly they don't come true and he is wrong.

Again he talked about 2008. He was warning about it around..what.. 2006?

The one time they do come true, that's all he talks about, giving the gulliable members of the public the impression he's some kind of oracle. That's how soothsayers and mystics operated in the medieval era. And how certain financial spivs operate today.

I’m fine if you want to call him back. But you’re also forgetting that I am not basing my whole economic theory on one person only. I think that would prove to be very foolish and unprofessional. There are plenty of others who share Bass’s view on Japan in particular. Gerald Celente, Edward Harris, Peter Schiff, Max Kaiser, There’s a lot of people saying that Japan is going to collapse. If one two or three economists stood up and said that believe me I wouldn’t take notice but When a whole slew of them- who by the way have completely different economic theories and don’t tend to agree with each other on a lot of things – say the same exact thing about Japan, to not listen in my personal opinion, is foolish.

Sorry Jeff. Siri is awful today Me correct some of my posts if you don’t mind

Jeff he hasn’t been around for decades.

I meant he hasn’t been Wrong for decades

I’m fine if you want to call him back

Fine if you want to call him that.

It is an objective view on Japan. The subjective view Is one brought out of emotion such as the right wing praising of Japan

Actually your view is one brought out of emotion with your worries about your unborn child so yes, a subjective view based on the wrong preachers :)

*Bass is predicting a Japan crisis for years and many experts disagree his analysis on Japan. *Based on which knowledge is this a 'very good commentary' ? :)

I'll take his opinion over yours any day.

Missed this one, and told Siri that she was a b.. by not bringing it to my attention :)

This is no answer but something I always expect by true believers of a preacher...

Actually your view is one brought out of emotion with your worries about your unborn child so yes, a subjective view based on the wrong preachers :)

Actually your view is one brought out of emotion with your nationalism about your country so yes, a subjective view based on the wrong preachers :)

Missed this one, and told Siri that she was a b.. by not bringing it to my attention :)

No I didn't. I meant what I said.

This is no answer but something I always expect by true believers of a preacher...

And YOU are talking about SUBJECTIVE views?? LOL.

If you are finished, here is something you can read

https://www.quora.com/Economy-of-Japan-What-is-the-economic-future-of-Japan

You're welcome