Japan revises GDP to nearly flat, showing fragile recovery

So the expected tourism can't be used to really boost economy right.

https://japantoday.com/category/politics/japan-pm-pinning-hopes-on-big-spending-tourists-to-revive-economy

The growth figures that are hastily announced by all countries are rarely to be believed but markets usually do anyway. But a few months later a "more accurate" figure is released. This downgrade in GDP figures used to be a common thing in Japan. Now we have had two in a row. I don't think I have ever noticed an upgrade. We already had shrinkage for the previous quarter so, to avoid a technical recession, growth was vital for this last quarter. And lo and behold, after a huge downgrade of 0.5%, it still creeps in at 0.1%. Fudging? Who knows. Some won't want to believe that bureaucrats would do that, of course.

Inflation is on the rise alongside higher taxes, yet wages remain stagnant. Anyone who thinks tourism is going to save Japan and its economy is living in a fool's paradise.

What's never mentioned is the insane amount of BOJ asset purchases propping up this "GDP" calc...

FY 2021 73 TRILLION New Govt. Bond Issuance

FY 2022 111 TRILLION New Govt. Bond Issuance

This ignores all other asset purchases taking place at BOJ, all designed to prop up GDP. Goes something like this;

Asset Owner ABC sells Asset to BOJ

e.g. Reit/Corp. Bond or Equity ETF shares etc.

1) ABC likely pays capital gains tax, then 're-circulates' into other assets, consumption, savings, etc. So, money supply's 'goosed' via this activity, as naturally BOJ pays with printed money.

2) These asset purchases put upward pressure on the underlying asset resulting in additional realized and unrealized capital gains, improved 'market/societal' sentiment, etc. Also artificially subsidizes entire pension system, again helping out the Govt. and big biz

Don't forget some of these new Govt. Bonds issued are now for the purpose of providing price 'subsidies' to businesses, especially in the energy and food sectors. That's helping keep a 'lid' on official inflation numbers in order to maintain stability in the economy rather than let consumption (and GDP) fall off a cliff like in most areas of the world with double digit food and energy inflation.

Conclusion? First, Japan's real non BOJ based GDP's likely about 25% smaller than official reported number, meaning Japan's real economy's far smaller than Germany today. Second, it's a Govt. take-over of the entire economy/GDP here, if you believe like most that those that own the assets control the economy....Third, most believe the best capital allocators and creators of wealth are NOT in Govt, according to history!

Without a fairer money distribution as an initial attempt for stopping those downwards trends and revive the economy, it will go, yes you surely guess it, more and more downwards. Consequently done , one would just easily solve it all by helicoptering the tons of printed money and initiating a new bubble economy like in 80’s, 90’s. It draws flak and no one likes the idea, well, then learn to suffer in continuous downwards spirals. That’s surely a best proved and working option, feel free to go ahead on wrong paths, while you still can.

This is all that Kuroda at the Bank of Japan needs to keep his Zero Interest Rate Policies on Friday, the last meeting he'll chair, until he finally leaves office. No growth? "No time" to make money cost...anything!

Sadly, this is Japan in a nutshell: the previous economic policies are a shambles, Abenomics have become a cruel joke, pulverizing the yen and destroying people's spending power and savings, with the market betting that the Bank's Yield Curve Control band is a farce, and MUST be adjusted upwards; all economists in the B of J know that the ZIRP policies MUST end for Japan to survive its horrific demographic financial burdens of a rapidly-retiring, barely-consuming society. The BofJ's balance sheet alone now represents 130% of Japan's entire GDP...BEFORE the mass requirements of mass retirements really kick in. Meanwhile, there are literally a dozen days or more each quarter when the BofJ offers up billions of dollars in bonds for purchase...only to find IT is the ONLY PURCHASER interested! (Gee, I wonder why?!)

Yes, everyone knows that the policies of the Old Boss MUST be abandoned...but the Japanese decide to DO NOTHING and WAIT until the fool who introduced these policies rides off into retirement? Let the New Boss do the dirty work that the Old Boss couldn't? Because of "face-saving" reasoning? lol.

What. A. Joke.

Insanity equals doing the same thing over and over again and expecting a different result!

Unfortunately, it's not just the BOJ, they're just the most obnoxious. It's called 'culture-capture', hanging on to the past and INVESTING 'resources' in manner that's clearly self-destructive/offers NO benefit etc.

Losing about 1 million inhabitants per year is not going to make GDP grow more...

Losing about 1 million inhabitants per year is not going to make GDP grow more...

Exactly, actually going to be far worse and for GDP as well, why you ask?

1) Excess deaths, see latest Covid-19 research eg. Lancet Journal, crazy 5x increase in morbidity/death for ALL infected groups vs. their non infected 'peer' group, not to mention serious disease etc.

2) Official death count excludes non citizens

3) Birth count includes non citizens

4) Birth count includes babies born ABROAD to 1/2 Japanese Nationals

5) 2-4 above new Govt. counting policies to mask true depopulation

Very real scenario of Japan's GDP collapsing because of above, even 50% by or even before 2050 not unrealistic given Covid-19 risks

6) Let's not forget aging and retirements etc., hardly GDP Driver!

@Jonathan Prin

Japan's population will be returning to what it was in the 1970s 1980s during the boom years.

@shivaji

Today Japan pyramid of age has nothing to compare to the one in the 70's.

And you are assuming it will not continue to drop like a stone. It will !

I leave you to your dreaming view.

For sure, you have no idea what you are talking about (living, studying in Japan).