Japan business mood worsens to 3-year low

The BOJ’s controversial decision in January to adopt negative interest rates has so far failed to boost stock prices or brighten corporate sentiment.

On the contrary it has worked in the opposite direction, stock market is down nearly 15% (including today's drop of 2.81%)..Also, consumer prices, Alcohol, Health Insurance payments etc...have gone up effect from today !

No large-scale service-based economy ever existed. Once medium sized manufacturing departs a nation, what is left? The economy transforms into a more service based one. This inevitably low-wage jobs, ones that is hard to live on. The standard of living deteriorates and the gap between rich and poor widens, with more of the population on the poorer side of the divide. Brace yourselves; the ride is just beginning to interesting. It's been a long time in the making.

This will only get worse for Japan. THeir main problem is not having a home market to shore over hard times. from the middle class down, don,t have the money to renew every day items or live a healthy lifestyle . So people are making items last longer and cut back of everyday essentials and restricting movement which restricts a healthy life. Less Activities are participated in like outings and sports. The last two being a big earner for the home economy. Double the minimum wages instead of printing more money.

sangetsu03 has made some outstanding points on here recently, highlighting that Japan Inc. has been protected & propped up by government and thus anti-competitive & inefficient for decades. I could write a 50 page thesis on JA & its stranglehold on the food business alone.

Nothing the government has done thus far has been aimed at the consumer in any way. Abe has looked after his cronies in banking, construction & agriculture - to the detriment of the Japanese public. It's truly remarkable that things are this bad... Or is it? An apathetic public, with voter participation at 17%, has given us 50+ years of LDP tyranny.

Sorry, but there is no foreseeable solution. No light at the end of the recession tunnel. Japan is a bubble-era car stuck in reverse.

The government, for its part, is already considering compiling a fresh fiscal stimulus package and delaying next year’s sales tax hike to prevent external headwinds from derailing a fragile economic recovery.

Actually, Japan Today, it was stated in an article earlier this week that Abe had already decided NOT to delay the sales tax hike. You are giving conflicting information. Please be careful.

Moderator: Abe has not announced anything definite yet.

An apathetic public, with voter participation at 17%,

where in the world did you pull this stat from? with the last election in 2014 as the exception, voter turn out in japan is usually around 60%.

http://www.idea.int/vt/countryview.cfm?CountryCode=JP

it's not exactly headlines news that japan's market is highly regulated and closed. while it is inefficient, it ensures that most people get a piece of the pie, and thereby reducing unemployment and ensuring a large and content middle class. while this was important after WWII, this model doesn't work in a hyperly connected world economy. when china sneezes, the world gets a cold. there is no quick fix to this problem regardless of who is in power. replace abe and his cronies and you'll just get okada and his. so blame abe and the ldp all you want, but the alternatives won't do any better.

@nakanoguy01

where in the world did you pull this stat from?

Sorry, you're right. 52%-odd for the nation, 17% I believe was the Tokyo number. Record lows in any case. Cheers for the link!

replace abe and his cronies and you'll just get okada and his. so blame abe and the ldp all you want, but the alternatives won't do any better.

I agree. The problems aren't entirely on Abe's shoulders, but he has made some monumental errors of judgement (to put it lightly). I think we can agree that Japan has deeply-rooted problems that need change on a systemic level. But that discussion is for another day!

japan's market is highly regulated and closed. while it is inefficient, it ensures that most people get a piece of the pie, and thereby reducing unemployment and ensuring a large and content middle class

This only works until it doesn't. This model stopped working in the early 80's, and rather than change the model, Japan has increasingly used public funds to keep it going. The problem with the economic environment which attempts to protect everyone is that it comes at a cost. Those who have enjoyed the higher wages, reduced unemployment, and middle class living enjoyed it at the expense of their children and grandchildren, who must bear the burden of this cost. Future generations will get a smaller piece of the pie, greater unemployment, and find a harder time being part of the middle class.

In the years Japan enjoyed it's explosive growth, it had the benefit of existing in a world with few competitors. America was the only real economic super power, controlling two-thirds of the world's wealth. Europe was still licking it's wounds from the war, England was experimenting with socialism, the rest of the world was still in the 18th century. Japan was the first to recover from the destruction of the war, and taking advantage of low labor costs, a huge and hungry workforce, and a weak currency, strong growth was inevitable.

In those days it was unforeseen that large-scale competitors with larger populations, lower labor costs, and even weaker currencies would one day emerge. The companies that ran Japan prior to the war were allowed to regroup and take control in the post-war years. These companies consolidated control over the economy, and even the government itself. They used their influence to close Japan's market to outside competition, and twisted the arms of the government to create regulations which benefitted themselves. Competition for labor drove up wages, as well as increasing benefits for workers, including safe, lifetime employment. In those days of strong growth and no competition, these policies could be financed.

But such is the case no more. The world today is not what it was until the 80's. Water follows the path of least resistance, capital follows the path of greatest returns. The world is changing, those who have never enjoyed a good standard of living are beginning to see changes for the better, those who have always enjoyed a good standard of living are likely to see changes for the worse.

Time moves on a large scale, and the effects of economic policies, regulations, and the like, can take a long time to be felt. We are feeling the effects of policies which were enacted in our grandparent's time, and those changes taking place now will be felt by our grandchildren.

In the end, nature balances out everything. Though we are likely to feel growing pains as emerging markets take more of our own pie, in the end, we will all be better off. Our generation is likely to feel the worst of the pain, but succeeding generations will hopefully do better than we have.

17% I believe was the Tokyo number.

If I recall correctly, 17% was a given age group.

And what of the coupons to be given to the poor income young? Instead of reducing the tax burden, the government will indicate what the poor can exchange the coupons for and it won't be a holiday in Guam! These measures were adopted in war torn countries in the past to control populations which is the way it is going here....

Ah, yes! The three arrows of Abenomics;

Hopefully, people will realise this fool and his cronies have no real idea how to repair the stagnated economy and will vote them out. However, there is no opposition party either! Maybe Japan should just give up on politicians all together and let the people run the country. Oh, my dog! What am I saying???

Sorry, but there is no foreseeable solution. No light at the end of the recession tunnel. Japan is a bubble-era car stuck in reverse.

disagee and agree

The problem is clearly with the japanese people themselves, and for reasons that elude everyone, they are stuck in that bubble era mindset. I dont, however, think that there is no foreseeable solution, the solution is all around us. many Japanese people know this, but would rather remain in their safety cocoons, enduring their service jobs at the conbini, supa, gasoreen stando factory work as drones under the care of a benevolent group leader. Heaven forbid they ever have to think for themselves A few become accountants lawyers engineers etc, but none have any grasp of english and the ones that do go out cant find work when they return. there are so many things japan could do, but cant because (full circle) they are stuck in the bubble era mindset. So what is this mindset? Well those at the top have a say how everything is run, so when they declare all is good, as Kuroda did last year, well its ok to stop living as a hermit and start spending. Its this circle logic thats baffling, only buy Japanese, alienate foriengers and wait for any change to take place from the top. I dont think at the micro level japanese are able to change, so there lies the problem

Abenomics at work!

Let's all give him another term!!

If you want to improve the Japanese economy, start by teaching high school students to think critically, continue that through university, and make loans for entrepreneurs available to anybody who's got a half decent idea. If they're gonna raise taxes to "help the country" why don't they actually help the country with it by giving loans to the Japanese people to build new businesses and increase domestic spending.

But it'll never happen because Abe and the LDP are thinking only of the Greater East Asia Co Prosperity Sphere V2.0. I wonder if Abenomics (And the subsequent slow collapse of the economy) was actually a ploy to make it easier to have a repeat of the 20's and 30's... Conspiracy theorist I am not, but it is hard to fathom how Abe could ignore so much advice from so many important economists and fail the country every single year he's been at the helm. It seems like he's got different objectives from what he's actually telling the public.

"This model stopped working in the early 80's"

I was here in the late 80s, and I can assure you the model was working then. It stopped working after the 1992 crash, which was caused by the financial and real estate industries, and NOT by the real economy.

However, the free marketeers in the Ministry of Finance brainwashed by Milton Friedman and Reaganomics saw this as the chance to dismantle what was until then a model that was the envy of the world. That fundamentally underlies Japan's problems today.

The rest of the world moved on since the early 1980's so Abe his team and supporters should not ignore reality