Japan growth seen slowing in third quarter

There seem to be some fallacies and assumption in this reported article. Economic growth had slow, capital expenditure had been cut back. Even if consumers spending increased before the increase in the sale tax this is only a one off even,t then what happen next.

If domestic demand is weak,economic growth is also weak, individual investors are cutting back investment, capital expenditure cut and the coming increased in sale tax will add more stress to price hike and is it real that industries will hire more people with higher wage. This does not sound like a likely scenario.

Something is loss in translation.

This cooling, however, could be temporary as service firms plan to ramp up investment to meet improving domestic demand.

Exactly how will domestic demand improve? With record numbers of people retiring from the work, and many new hires being relegated to contract or part-time positions, not to mention a quickly declining population, there is little reason to expect any increase in domestic consumer demand.

There are only a couple of sectors which are capable of growth in the near future, but they make up too small a part of the overall economy to make a noticeable improvment.

You will see old people coming back to the workforce, as well as new roles for women. Retirment age will be pushed back, there will be little immigration reform. It will be done Japan way, as it always is, and might just work.

There are only a couple of sectors which are capable of growth in the near future

Which ones? Maybe I should try to change my job

...back to negative growth...inject fresh money and enjoy Abenomics growth.

This article doesn't tell the entire story of Japan's plummeting account surplus - going from over $200 billion in 2011, to $40 billion so far in 2013, with four fall/winter months ahead (Sep-Dec) when Japan will surely suffer huge account deficits due to winter heating bills. Coupled with all the massive trade deficits months after months, Japan is rapidly heading from decades of creditor nation status, to a debtor nation. And not to mention the fact that Japan's national GDP per capita income has also plummeted due to %20 weaker Yen. Japanese are 20% poorer today, compared to 2 years ago.

chucky3176

Japanese are 20% poorer today, compared to 2 years ago.

So where were they prior to 2008 when the $ yen was 110 or more ?

Where were they? They racked up at least $100 billion+ account surplus every year, trade deficits were unheard of, and their electronics companies weren't going bankrupt, while having $3 trillion less debt, instead of owing $10 trillion today.

Time to start focussing on Chinese incursions to take off the blame of the failure of 'Abenomics', and then praise the latter for a rush of people buying things before the consumption tax hike, after which they'll have to blame China for everything again. Wouldn't it be nice if they focussed on misspending?