business

Japan's economy grew 1% in 2016; slowed in Oct-Dec

24 Comments

The requested article has expired, and is no longer available. Any related articles, and user comments are shown below.

© Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

©2020 GPlusMedia Inc.

24 Comments
Login to comment

Abe has completely failed.

No doubt they'll try and spin this by blaming everything in the world, but the truth of the matter is simple: Abe has completely failed to deliver on his promises. His economic policy is nothing more than a buzzword and he needs to be replaced by someone with who has more realistic goals and can actually bring about change.

Every day that Abe and his cronies remain in power, Japan will remain stagnant. Japan needs a political revolution.

2 ( +4 / -2 )

Well I guess because of the %1 growth Abe was able to give away all that money to other nations, maybe abenomics works in the opposite way!! :-/

1 ( +3 / -2 )

Stimulus included in the growth.Actual economy grew? I don't think so.

1 ( +3 / -2 )

Never mind the actual figures - Government will continue to put out forecasts based on their fictional 3% growth figures as per Abenomics manual....meanwhile in the real world....

1 ( +3 / -2 )

Abe has sought to rekindle growth through lavish monetary easing meant to foster inflation and stimulate demand. But manufacturers have been slow to invest or raise wages, and the consumer demand that drives most business activity has remained tepid.

Just a thought, but maybe the idea that monetary easing is the cure for what ails Japan is, like, totally wrong?

And with a culture of protecting stale old industries and few incentives for innovation in Japan, is it a surprise that there is no growth in consumer demand? Once you have food, a place to live, a TV, an iPhone, what else do you need? Even if I have extra money I'm not going to buy a spare TV or iPhone. What I have gets the job done.

1 ( +4 / -3 )

I wonder when someone is going to grow a pair, from within the LDP, and put Abe in his place? Oh and with an economy the scale of Japan's there is a huge monetary difference between 1% and .2%

Reporters like to round off numbers to make things come across better than they actually are. And these October to December numbers typically are skewed, when looking over the course of the year, by annual year end purchases of perishable goods.

Japanese consumers are still loathe to purchase large ticket items whose purchases are needed to sustain any economic growth.

0 ( +2 / -2 )

Double the minimum wage at 20 % increase each year for 5 years and you will see 1% grow to 3 % in 12 months. Japan want to increase the birth rate, put money in the minimum wage family and in 5 years you will see the birth rate double.

-2 ( +1 / -3 )

Double the minimum wage at 20 % increase each year for 5 years and you will see 1% grow to 3 % in 12 months. Japan want to increase the birth rate, put money in the minimum wage family and in 5 years you will see the birth rate double.

Are you familiar with what you are talking about here in regards to how it affects Japan? Do you know what the minimum wage is here?

If "no" to either, then I suggest you take a look at the situation here before suggesting this. If "yes" to either or both the questions then you really have no idea what would happen. It would be counter productive as it would put or close many businesses.

1 ( +3 / -2 )

Sorry Yubaru you're wrong on this... 'businesses will close' is the usual mantra of big bosses and large multinationals who exist of the sweat labor of their workers.

I'm wrong? Hmmm...what's the minimum wage in Japan? Do you know? What's the minimum wage in Tokyo vs Sapporo vs Fukuoka or Okinawa?

There is no national minimum wage, it's set regionally, and because of it just saying "double" the minimum wage WOULD put plenty of small to medium sized businesses out of work. Imagine have to suddenly pay 1400 yen per hour at a local 100 yen store in Okinawa, they's go out of business, so would gas stations, convenience stores etc etc etc, People would stop buying any products there because the owner would have to raise prices to keep pace.

It's not so easy, and one can not just start comparing the US with Japanese markets either, too many middle men here taking a cut.

Yes, some businesses will close, but they should have closed anyway and as long as there's a need for a meal, a checkout at a supermarket or a beer, no matter the minimum wage, there'll be businesses to supply it

But no one there to buy it, as the smaller stores would get squeezed out by the conglomerates like AEON who could afford it. Local ownership would die.

0 ( +1 / -1 )

Yabaru: Seem like your the one in the dark when it come to Japan. Do you actually live here . I have and I here right now. My partner has a 4 year university education but can only attain a Minimum wage Job with 3M in Kitakami, Iwate, and that not because of her intellect, It because of the run of the latter the Japan society has chain her too. Dogdog we know the go. Yabaru has not the slightest.

-2 ( +0 / -2 )

Yubaru has this right, I feel. You may not see businesses shutting down but it feeds through in other ways in such cases... less hours for the workers, or investments into automation so that low skilled minimum wage workers are made redundant. There is no free lunch here.

If the policy wouldn't be such a disaster for the young and otherwise most vulnerable, I'd be for trying this policy out just to prove that it'd be a horrible failure. Then, maybe, finally, we could all agree to focus on what really matters - huge reforms to overhaul the way things are done here entirely. Not just focus on a single type of worker at the bottom of the ladder, as if that is the only thing ailing Japan...

-1 ( +1 / -2 )

Someone made a comment once about ways to improve the economy, they complained about how their college educated partner couldn't find a decent job and was "forced" into working at a position that paid only minimum wage and felt that due to the "education" their partner attained they "deserved" better.

I don't understand the sense of entitlement. Why go to college at all if all you are going to get is a low paying minimum wage position? Why not study in a field that promises better employment opportunities? Right, didnt think that would happen when they got into school and had the blinders shot from their eyes after graduation. Expectations weren't met. So that's life. Fine go back to school and learn something marketable if things are so bad. It takes more than a college education to find work here nowadays and the sooner folks realize that the sooner things may change.

Go to where the work is, or at least have the brains to study something in school that makes you marketable. Learn or study a trade or skill that is needed in the workplace.

Entitlement, something I had hoped not see imported into Japan. I've been working my arse off here for over 30 years to raise and support my family, and it ticks me off that some folks think that some magic wand is going to suddenly make things better.

0 ( +1 / -1 )

"You may not see businesses shutting down but it feeds through in other ways..."

You dont seem to know the data very well. Exports and corporate capital investment were strong. The weakness was consumption. And of course, the current account surplus is at a record high. So we have healthy companies -- but unhealthy consumers. So the solution would be on the demand side, like wages, not on the business side.

-1 ( +2 / -3 )

Exports and corporate capital investment were strong.

Exports were only strong due to playing with the yen. The average consumer is seeing a rise in costs due to imports costing more as a result of it. .

It is also predicted to slow down as consumer spending has not kept pace, and in fact has slowed down even farther than government predictions, due in large part to the weaker yen.

1 ( +2 / -1 )

I don't understand the sense of entitlement.

Yes. It'd be interesting to see if there was a correlation between the sense of entitlement and apparent dissatisfaction with one's circumstances.

You dont seem to know the data very well. Exports and corporate capital investment were strong.

You're barking up the wrong tree. My comment in agreement with Yubaru was about the effects of a hypothetical notion that the minimum wage be doubled.

of course, the current account surplus is at a record high. So we have healthy companies -- but unhealthy consumers.

That Japan has a large current account surplus does not indicate that companies are healthy. Indeed Japan resident individuals and institutions alike wouldn't be investing so much overseas if it were more attractive to invest at home in Japan and things were healthy here. (I trust you have by now, at last, actually looked into what is behind Japan's current account surplus and realised that it is not the trade balance.)

Japan's consumers will feel better about the future when the local economy really picks up, and that'll not happen until the local business environment is significantly improved. The Japanese economy is constantly in "recovery" mode, according to the government itself. The economy needs to be "recovered" at least before consumers feel true confidence.

0 ( +1 / -1 )

Yes. It'd be interesting to see if there was a correlation between the sense of entitlement and apparent dissatisfaction with one's circumstances.

There was an article here some time back about the late 40's and early 50 year old's that never married, never had decent jobs, still lived with Mom and Dad types.

There was, and still are for many, a societal belief of lifetime employment and that if one graduates from college they deserve to get high paying jobs and be set for life. The reality is so different, as there is another point of view that the average college graduate here in Japan today, will probably changed jobs 3 to 5 times during their lifetime. A far cry from their parents lifestyles.

This is another reason why there has been a slow but steady increase in the number of people trying to get jobs as komuin, it's still the safest life time employment around.

1 ( +1 / -0 )

new businesses will emerge to take up the slack with higher productivity levels and customers willing to pay the higher prices.

Well, we can pray. I'd rather poor businesses were driven out of business by competition or market forces than government legislation. Not convinced that it would definitely be a winner.

Exports were only strong due to playing with the yen.

Rubbish... Japan was running current account surpluses every year between 2008 - 2011

Exports and the trade balance is not the same as the broader current account surplus.

The options facing the Japanese government is that it either increases domestic demand (something the DJP paid lip service to between 2010 -2012) or it gets exports to pick up the domestic excess (Abenomics 2012 - 2017).

I have been hearing for years that Japan needs more demand. Abe or whoever can scream till he is blue in the face, but I'm NOT buying a new TV. I don't need 5, or 10, of them. What I have gets the job done.

So I propose another option - we let stale old businesses restructure or go bankrupt in accordance with market forces, so that excess production of stuff that is not needed stops, and the poorly utilised productive resources such as well-educated Japanese workers can be put to better uses instead.

Consumers like myself will spend money on innovative new things, but this can only happen if those new innovative things are first produced. But Japan is currently geared towards protectionism rather than dynamic progress. Japan shirks short-term pain at the expense of long-term gain.

0 ( +1 / -1 )

Yaburu and FXgai want to stand in the way of poor people earning more, There is a name for people who act in this manner, Selfish. How would it effect you? if these people got pay a decent wage. come on tell us all. More like you don,t like the fact that they hourly rate will become more then yours. So how would that harm you. More money in the hand of the poor is spent more wisely then tax brake for a company which goes and invest it on moving off shore.

0 ( +1 / -1 )

"Exports and the trade balance is not the same as the broader current account surplus."

Well, they're pretty darn close, given that one is the largest component of the other. In Japan's case, both balances show roughly the same pattern over recent years - and that's no coincidence.

"More money in the hand of the poor is spent more wisely"

Yes, indeed. Most of Japan's GDP comes from consumption, not from production. Time to do more for the demand side, because "spread around" is better than "trickle down" .

-2 ( +0 / -2 )

Dog dog: you can not talk common scene economic to a bean counter. They only understand numbers. They never calculate Human condition into there models. These people are void of any compassion and never realise how compassion and a fair go build a powerhouse economy like Australia where their Minimum wage is $20.00 plus an hour and free medical and the boss pay your superannuation of 12% of your income on top of your wage. No they think that a place like that does not exist. They prefer to bury there heads in the sand when the evidence is handed to them on a plate. Like I said void of compassion

0 ( +1 / -1 )

Yaburu and FXgai want to stand in the way of poor people earning more

John-san, that's unfair. On the contrary I think you fail to acknowledge that the money that you want to put in the hands of the poor doesn't come from somewhere for free. Such policies make us all poorer overall, and when we all become poorer it's the least among us who are hit the hardest.

More money in the hand of the poor is spent more wisely then tax brake for a company which goes and invest it on moving off shore.

That individuals and institutions are investing offshore is because of the relatively poor environment for economic activity in Japan, and government dictating the price of certain types of labour is to exacerbate this problem even further.

The solution is to make Japan more attractive to invest in, so that the money gets invested here instead of overseas. More investment here will result in more jobs here, and with increased competition for labour only the best jobs will be filled, and wages will rise as a result of that. But Japan needs to fix a whole lot of things to make Japan relatively attractive to other places, and the politicians don't have the will.

You point to Australia's wonderful minimum wage. But you can't just point at their minimum wage or other individual items and conclude that those things are the reason for Australia's relative success.

Check the Doing Business rankings. http://www.doingbusiness.org/rankings Australia? 15th. Japan? 34th.

If Japan did things to improve the business environment so as to boost Japan's ranking to a similar level, then go ahead and take your minimum wage. It's a minor thing in the bigger scheme of things, but all else equal it's not a plus, to my mind.

Well, they're pretty darn close, given that one is the largest component of the other.

JeffLee, I'm looking at data from the Ministry of Finance, and I see the annual trade balance was in deficit from 2011 through 2015, returning to surplus in 2016. During the whole period, the current account balance was in surplus. The current account balance is in surplus thanks to the Primary income balance. It might have been the other way around decades ago.

"spread around" is better than "trickle down" .

Having government hike the minimum wage is a form of "trickle down". What government should be doing is not "spread around" either, but putting in place the conditions for the economy to grow. Get it right and the average worker will benefit.

Without a current account surplus Japan would be in the same monetary state as Zimbabwe and the same fiscal position as Greece.

Dogdog, yes that's a risk and I agree with you there. I just had an issue with conflation of exports versus the broader current account.

The new model has to be one which maximizes domestic consumption and limits domestic production.

Why wouldn't we want to maximize both? When we produce more we have a greater propensity to trade what we have produced to gain those things which we do not produce ourselves.

0 ( +1 / -1 )

If I were god and could make all the decisions I would have an economy here similar to Norway or other Scandinavian countries . We'd pay taxes out the arse, BUT there would be free health care, education etc etc etc.

We pay taxes here for goods, services and social welfare programs that the majority of us will never or rarely need or use. I have no problem with people on minimum wage making more money, but not at the cost of higher prices for their products.

So some businesses go bust, its will only be a short term feature of these local economies because at the end, people from Wakkanai to Nara need there burgers, corner shops, smokes and Hotomoto and new businesses will emerge to take up the slack with higher productivity levels and customers willing to pay the higher prices.

Right, all the local businesses get shut down because they can not compete with the very conglomerates you claim would take over anyway.

By the way, we eat more than burgers and hotto motto down here. Use a different example if you want to make your point. Again, you gotta be living in dream land if you think anyone locally is going to step up and replace these businesses that shut down.

And in the interim, people would suffer from more unemployment as well.

Yes Japan is weakening its currency but not for the reason you state. Japan produces too much and consumes too little of that which it produces.

Pray tell outside of perishable goods and food-stuffs, just what does Japan produce too much of in country that it doesnt consume enough of? Electronics, household appliances, big ticket items, are already produced by Japanese companies from overseas locations and EXPORTED to Japan. Oh and locally cultivated food products are already WAY over priced!

You can buy nearly the exact same product, produced by a Japanese company in SE Asia for a lower cost in a foreign country than within Japan itself. I have personally seen Regza TV's that cost nearly 250,000 yen per unit HERE in Japan sell for roughly 1/3 that price in the United States, for basically the exact same product!

So while you say Japan produces too much and doesnt consume enough locally, then why dont Japanese manufactures produce goods that are needed locally instead of needing to import them to satisfy local demand?

Because, if you ask, what is needed locally can be produced cheaper in foreign based factories.

By the way, Japan's largest exports are cars, computers and electronic devices....so just how many of each do we need to purchase locally to stop the flow of exports, and INCREASE demand within the country? You talk about a disingenuous argument , yet you fail to take into account the fact that Japanese manufacturers are making THINGS that are NOT needed locally.

Just how many cars, computers, and "other" electronic devices am I supposed to buy? Even if I dont need them?

0 ( +1 / -1 )

I apologise reluctantly to you both, Of my personal remarks I imposed. I don,t know both of you personally and should not have assume unfairness and or question your compassion. I don,t agree with you simple because I know how hard the Japanese work in the minimum wage area, This demographic has new living standard which the minimum wage has not keep up with. EG a big burden impose which was not around 2 decades ago is the digital age and costs on top of the normal standard of living. It very hard to go about life without these new burdens and Industry has made bigger margin with the employing these new technologies without passing on some rewards for the hard working Japanese minimum wage earner.

0 ( +0 / -0 )

I doubt Japan will ever return to boom time growth without a good war - the locals have learnt to live on "minimalistic lifestyle" since the property crash twenty years ago - its something the west should be watching.

-1 ( +0 / -1 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites