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Factory data shows Japan's economy turning corner on recession

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By ELAINE KURTENBACH

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More media nonsense.

may be turning the corner on a recession brought on by a hefty sales tax hike.

... and...

Prime Minister Shinzo Abe has made pushing prices higher the main focus of economic policies

So a 3% sales tax brought on a recession, but Abe's policy of pushing prices higher, which has the same thing effect of the sales tax hike, is an altogether different story.

It's no wonder this isn't working out so well.

For the “Abenomics” strategy to work, Japan’s planners agree that

What Japan needs is much less failed central-planning.

2 ( +4 / -2 )

I don't get it...if at first you don't succeed, try, try another 2 or 3 trillion dollars?

Didn't the former Economy and Trade Minister, Akira Amari, just admit on a national televised debate that "it will probably be difficult" for the BOJ to bolster inflation in the way it's trying to do it?

And does no one in this government take into consideration the changing composition of Japan's demographics? Fully 25.9% of the population is already over 65 years old, so one in four persons in the entire population can be expected to be living on a fixed income but with no (or often greatly reduced) employment. And you don't have to travel far to see this situation in action: the elderly are out there hunting for bargains, creating demand for cheaper and cheaper deals to keep them living within their budgets.

Further, they (along with the rest of society) can see the writing on the wall: there's no way the government will be able to sustain its generous pension payment policies into the future (since the Japanese Health Ministry expects the total population to fall a huge 25% by 2050, while a majority of youth in their 20s and even 30s are declining to get married and have enough children, and those retirees are living (and living off their pensions) longer, and longer, and longer...

I know it's not directly connected to Abenomics, but you have to admit that the recent sales tax hike was the single most damaging thing to Japan's economy since...the last sales tax hike (which threw the economy off any chance of recovery from the stock market crash back in 1991 in the first place.) Economists can choose to "not include the sales tax hike" in judging whether prices are rising, but certainly no one in the street is doing this: they see rising prices on everything they buy, everyday, and this only further convinces most consumers that now is not the time to start spending money like drunken sailors (as Abe would wish it so.)

Expect weak demand for consumer products to remain the norm for a generation at least, and don't hold your breath on creating a situation where companies suddenly start spending their profits on increasing wages just because some temporary politician wants them to do it. Since in a mature, aging economy like Japan's the BoJ's effort is 95% about confidence, its massive bond purchases mean little to anyone (not investing in the stock market) if the vast majority of Japanese still don't trust that better days lay ahead...

4 ( +5 / -1 )

Gotta call a foul on this one! In the last few days we've had Sony announce a staff cutback of a thousand employees and another major airline going bankrupt. The colony may be 'turning a cornet', but I think it's turning into a one-way street and going the wrong way!

1 ( +4 / -3 )

Factory data shows Japan's economy turning corner on recession

Japan’s industrial output edged higher in December, suggesting the world’s third-largest economy may be turning the corner on a recession brought on by a hefty sales tax hike.

Data released Friday showed manufacturing output increased 0.3% in December from a year earlier and by 1% from the month before.

And Japan retail sales rise for 6th straight month in sign of recovery

Japan’s retail sales rose for a sixth straight month in December, providing evidence of a gradual recovery in private consumption as the economy climbs out of recession.

The 0.2% year-on-year sales growth fell short of a 0.9% gain seen by economists in a Reuters poll, following a revised 0.5% rise in November, data by the Ministry of Economy, Trade and Industry (METI) showed on Thursday.

A recovery in private consumption, which accounts for about 60% of the economy, is a welcome sign for Prime Minister Shinzo Abe,

Articles by two different sources but we still get the non believers the pessimists, the sky is falling group telling us different.

Oh well I guess the report the other day saying exports had increased too is irrelevant to those who refuse to understand reality.

Doing business and understanding how to trade goods and services are different from pretending you know about economics and the economy.

I would far rather be reading articles about things improving as opposed to reading about the doom and gloom since 2008.

If we can get through the next 9 months unscathed by any major economic crisis or natural disasters things just might be about in the clear for awhile.

-3 ( +1 / -4 )

Really no more comments needed any more!

All has been said by the previous.

Just again one thing: Prime Minister Shinzo Abe has made pushing prices higher the main focus of economic policies

Pushing the prices higher and higher will make it for "Mr & Mrs Watanabe" (as well as others) more and more difficult to lead a half-way decent life. But hey, "they" got it made and don't worry about "us".

1 ( +2 / -1 )

"Japan’s planners agree that wages must increase enough to boost consumer demand, which has stagnated as price increases have crimped household purchasing power."

Not to worry, I'm sure if he says pretty please to the corporations the next time he asks them to boost salaries, all will be well.

1 ( +2 / -1 )

Better raise taxes again! We can't have wealth in the hands of regular people, but rather concentrated in the banks and other oligarchs.

1 ( +2 / -1 )

The economy is not getting better for anyone earning under $100,000 per year.

-2 ( +2 / -4 )

Not entirely relevant, but listing prices inclusive of the consumption tax in stores would assist people being less apprehensive about spending money there (and online too). This is how it had been when tax was just 5%, and there had been a law to ensure that all-inclusive price listing practice.

Nowadays, say, in a supermarket where base price is listed in large and the nett price is listed in small print if at all if at all, just makes people subconsciously wary.

Then not to mention also the rorting or just plain naive stupidity of lots of businesses, especially smaller ones, of just increasing their prices by 8%, when actually prices should have risen was an increase by just 2.8% or something like that (eg. 100 yen + 5% = 105 yen; 100yen + 8% = 108yen; NOT 105 + 8% = 113yen).

By the way, the article is wrong on this point :

the impact of a 2 percentage point increase in the sales tax in April is excluded

it was 3 percentage points.

These are small adjustments but they do affect peoples attitudes and willingness to purchasing something dearer or cheaper or to purchase at all. Can't all these 'clever' people (not necessarily referring to politicians here) factor things like this in? Apparently not.

2 ( +2 / -0 )

What!? Goto is top Priority

-1 ( +0 / -1 )

"However, there is no evidence that a tighter labor market has strengthened price pressure,” Marcel Thieliant of Capital Economics said in a commentary Friday. “Adjusting for the impact of the sales tax hike, prices are rising at the slowest rate since June 2013,” he said.

He says the Bank of Japan will have to expand its already extraordinary level of monetary stimulus to get prices moving closer to its inflation target.

What he doesn't say (at least as reported) is the reason extraordinary levels are apparently needed is because QE is mostly creating a stock market bubble that is benefiting the corporate and investing class with little trickling down in the way of pay increases or the creation of enough well-paying jobs to boost consumer demand. Yet more QE is only likely to further increase the wealth and income gaps.

1 ( +3 / -2 )

Manufacturing increased because the yen is not worth much any more, so it makes things cheaper for overseas buyers of cars and electronics. Falling oil prices have undoubtedly helped the economy, though not all of that is in the data yet. Meanwhile, we are nevertheless still in a recession.

0 ( +1 / -1 )

onagagamo

The economy is not getting better for anyone earning under $100,000 per year.

Perhaps then try this event, it may help you improve your earning ability, stuck in a dead end job doing menial tasks must be depressing

http://www.japantoday.com/category/advertorial/view/how-you-can-change-your-financial-future#comment_1915039

-3 ( +1 / -4 )

A .3% increase is cause for jubilation? Shows how badly the Japanese economy has stagnated.

-3 ( +0 / -3 )

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