Japan faces economic stagnation as stocks plunge after rate hike

And currently manipulation doesn’t help either.

Japan faces the threat of economic stagnation as panic selling gripped the Tokyo stock market, triggered by economic uncertainty and the Bank of Japan's surprise interest rate hike amid low private spending.

Wages and the labor economy have been stagnant for 30 years even with record highs on the Nikkei and quantitative easing easy money printing buoying large asset holders.

But now the BOJ is telling workers to worry.

There is a two-tier economy in Japan too

Those articles are written like Yen getting stronger is a bad thing. Like corporations not getting record profits is a bad thing.

Maybe the Yen will go back to the normal levels of 1€=100¥

Then JT will tell us how this will be very bad for overtourism, for import stuff getting accessible for the locals again, and how the Japanese will callously spend their honest earned money overseas, instead of overexpensive and overrated places in Okinawa, etc

What does the “stocks plunging” have to do with economic stagnation? That’s right, absolutelu nothing.

DanteKHToday  05:04 pm JST

Those articles are written like Yen getting stronger is a bad thing. Like corporations not getting record profits is a bad thing.

Maybe the Yen will go back to the normal levels of 1€=100¥

Then JT will tell us how this will be very bad for overtourism, for import stuff getting accessible for the locals again, and how the Japanese will callously spend their honest earned money overseas.

. Whatever the news the websites, news outlets will hunt out the negatives for the clicks. Just look at the weak yen and all the terrible problems it caused here. Rice shortages (apparently) over tourism (apparently) garbage problems (apparently) imports very expensive. Flip to a strong yen, profits will be hit, bonuses will be cut, consumer will spend less cause they or the bonus was cut, Toyota et al will be squeezing subcontractors because of the strong yen. Hotels feel the pinch at tourists stop coming. To me it seems like it’s all noise! Weak yen gear for tourist industry and great for Toyota, but bad for imports. Then it’s terrible for tourism but good for consumers. Just noise now.

Btw the stock market is not the supermarket. And if you’re investing in the stock market you shouldn’t be taking your money out for atleast 40 years. Just noise. Nobody has lost any money until they sell, and cash out to lock in those loses. Right now. Everything is on sale.

The poor damaging fundamentals in Japan:Rapidly greying population, low birth rate, abysmal investment in education, hierarchical workplace, ignorant politicians,low wages, overcrowded cities, hostile nighbours, weak foreign diplomacy etc.

These are the problems not going away soon.

Stagnation ? That would be a great success for an economy in a decades long decline.

I know nothing about stocks, but can anyone explain what is the deal with 'panic selling'? Surely if stock is doing badly you just hold it, or use it as a chance to buy more?

I don't get it.

Instead of raising interest rates and harming almost all industries how about working on increasing peoples wages so they can come in line with the rest of the G7 nations.

Can't get employees to raise salaries so the LDP along with the BOJ screw around with Interest Rates causing more harm to everyone Employers and Employees.

@kurisupisu

Apart from omitting the embarrassing gender gap, you absolutely nailed it. All factors equating to being left behind the rest of the industrialized world.

The Japanese Government has thrown yen after yen away from keeping the yen from nose diving over the past year from not raising the interest rate to what now a whole one percent. Had they done it earlier they could have used all that money to aid the elderly who many are homeless, now.

I am one of the blessed ones who does not make minimum wage and survive in Japan comfortably. The Japanese Government needs to raise the minimum wage to 1, 500 yen an hour, and so, people can survive and not be homeless. I see in Yoloda, where they are seeking people to clean airplanes, and they want to pay 1,200 yen an hour just a shameful wage for cleaning dirty airplanes.

Stagnation is relatively good for Japan. The population is declining, so it's not realistic that the economy will be expanding. It's natural for it to be shrinking. So stagnation? Yeah, bring it on!

Economic health is what is important. And that can't simply be measured through GDP growth.

While a stronger yen will help keep the prices of imports, such as food and energy, down and ease the burden on households, it may also deal a blow to spending as those who hold stocks see the value of their financial assets diminish.

Sounds like not a bad deal for the nation in these trying times, especially those struggling.

We're going back to the usual, pre-covid, economic climate.

A weak yen does more harm than good. A strong yen takes our salary closer to the other developed countries and makes life cheaper for the average family. A weak yen only benefits export and trading companies and we pay only more for everything. And a few tourists less because of the strong yen will eliminate the overtourisn dilemma. Yen back to 110 gets my support!

sell-off was spurred by concerns over Japanese corporate earnings prospects on the back of a stronger yen, which reduces the earnings of automakers and other exporters when repatriated. The Japanese currency has surged since the BOJ raised interest rates Wednesday

Oh spare us the drama Kyodo news. The yen is only just back to where it was a few short months ago and nowhere near the normal long term average around 120yen/ dollar.

Unfortunately, local industry was hollowed out since the late 1980s and the economy needs 150 or less to encourage export led growth much like the 1950s, except this time by weak companies.....this is deja vu all over again....

The timing of the interest rate hike was not very good.

The yen had been weakening, but most companies listed on the Tokyo Stock Exchange were expanding their profits, and not only tourism but also export-related companies were doing well, so this was like pouring cold water on them.

If companies don't do well, employees' salaries won't increase.

With a strong yen, companies are busy securing profits and building up internal reserves in preparation for a recession, so average salaries have barely increased in the last 40 years.

The economy will only start to improve when there is a weak yen, a certain amount of inflation, and higher salaries for employees due to improved corporate performance.

Neighboring South Korea has already proven that raising the minimum wage does not improve the economy. There is absolutely no need to do such a pointless thing.

Why is everyone panicking over a storm in a tea-cup?

Basically when interests goes up, the stockmarket will cool down. That is investment 101.

The US dollar may also

strength in the FX market in Autumn due to the US presidential election but it will

calm down in November, once the

election is

over as always.

I believe the Ukrainian war will be over by that point with speculators running to bet on a stabilizing/growing global market heightening demand for Japan's hi-tech industrial components.

Oh get a grip. It went up from nothing to nearly nothing. It is far higher everywhere else on the planet.

quote: those who hold stocks see the value of their financial assets diminish.

Rich people will still be rich. This is not an issue.

The stock market is a casino divorced from real life. You can make as much money on stocks sliding as you can on them going up.

quote: Inbound tourism ... may also be impacted negatively.

Everyone hates tourists and endlessly moans about them now anyway, so that will be popular.

Sensible ordinary people are reducing their elective spending and increasing their income with side hustles. They know what the economic effects of their governments' policies will be, and are trying to increase their resilience to what is coming by banking as much cash as they can. If you are not, consider: if you are employed, your employment is a single point of failure in terms of your financial health. So start working on side hustles and a Plan B now. It takes time to build a side hustle into something that pays your bills. Starting when you lose your job is too late.

I know nothing about stocks, but can anyone explain what is the deal with 'panic selling'? Surely if stock is doing badly you just hold it, or use it as a chance to buy more?

I don't get it.

It’s not about the stock, but the economic effects more expensive money will have on companies ability to operate and access capital.

Not everyone is a long term investor and these changes could last years, maybe even a decade. so it’s better to bail at the top. Rather than be left “holding the bag”.

It just cannot work, because it is completely one-sided and unbalanced. People invest in companies buying stocks, funds etc, but in return? The companies don't invest in the people, by paying adequate high wages and salaries, paying for higher qualifications, re- and up-skilling programs etc. You can see clearly, already at a very first glance, that such an unbalanced economy has no chance in present and future.

Japan continues to face economic stagnation over 30 years, not only now.

Japan continues to face economic stagnation over 30 years, not only now.

Japan has been in stagnation ever since USA slapped the Plaza Accord on Japan. This is just another example of USA throwing it's so-called 'ally' or 'friend' under the bus when the going gets tough. Trying to do the same to China, but China is different - it's a sovereign country without American troops on its soil (although there are some around its coastline and in one of its smaller provinces).

"The Abe economics" was a very bad idea, the effects can only seen after Abe's death. Printing alot of money was the cause of the sharp dive of the Yen. Abe -san was no god of the Japanese politicians but a toxic one, the present stagnation will just haunting Japan and the Japanese people longer with pain !

"Japan faces economic stagnation as stocks plunge after rate hike."

It's not only in Japan embrace for a global economic ammergedon. Talk is over.

"The Abe economics" was a very bad idea, the effects can only seen after Abe's death. Printing alot of money was the cause of the sharp dive of the Yen. Abe -san was no god of the Japanese politicians but a toxic one, the present stagnation will just haunting Japan and the Japanese people longer with pain !"

We may agree to disagree but let PM Abe's soul rest in peace.