business

BOJ keeps policy unchanged as Japan's factory output falls

6 Comments
By ELAINE KURTENBACH

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

© Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

©2024 GPlusMedia Inc.

6 Comments
Login to comment

Japan's factory output falls in March, but beats forecasts

Now there's some real reason to celebrate.

Weak demand from China and the U.S. may be hindering Japan’s efforts to boost growth.

Such is the result when you relied too long on exports to drive your economy, and allowed the domestic economy to become woefully inefficient. Now Japan cannot really control its own economic fate -- except by massive government spending/QE.

1 ( +4 / -3 )

Japan's factory output falls in March, no ifs, ands, or buts... enough said.

1 ( +1 / -0 )

Japan’s central bank has defied expectations it might expand its monetary stimulus to help get growth back on track,

Most had not expected an expansion.

And anyway it's not like increasing the monetary base even faster than they already are (80 trillion yen a year) would help growth. The best growth Japan has seen recently has been ahead of the consumption tax hike, and that was really just "growth" borrowed from consumption that was brought forward.

his government’s economic recovery strategy, which hinges on lavish monetary easing, public works spending and longer-term reforms.

There's a mistake in the article. It should have been "and talk about longer-term reforms".

A key factor behind the feeble growth is a lack of corporate investment - a problem that Japan shares as companies opt to invest overseas rather than in a shrinking home market where the population is declining and fast aging.

The government needs to make the business environment more attractive to counterbalance such headwinds. Instead it is more interested in squandering the nation's resources on boosting the military and handing out cash to people who are sitting of wads of it.

3 ( +3 / -0 )

This planet's finite resources and systems can not take continual expansion. So, it's a good thing. There has to be a different approach to what we're here for than owning things because, well... see above.

0 ( +1 / -1 )

This planet's finite resources and systems can not take continual expansion. So, it's a good thing. There has to be a different approach to what we're here for than owning things because, well... see above.

Except that all government entitlement programs are designed around an ever-increasing number of people to contribute into these systems, and other government deficit spending depends on a certain amount of inflation to keep debt servicing costs reasonable. In Japan, neither of these things are happening. Younger people today are paying into pension systems which will be insolvent before they reach retirement age, and future generations of young people are going to be saddled with the debts incurred by the current government's foolish spending. Americas population is still growing, but their pension fund is already paying out far more than it is taking in, and it too will be insolvent before today's generation retires.

Such is the result when you relied too long on exports to drive your economy, and allowed the domestic economy to become woefully inefficient. Now Japan cannot really control its own economic fate -- except by massive government spending/QE.

Actually, more than half of Japan's output is domestically consumed, mainly because business and government have gone to great lengths to keep out imported competition. This has resulted in domestic prices being too high, which is the fundamental cause of deflation and population decline. In the end, protectionism is self defeating, for two reasons. First, since there is no competition, there is no motivation to improve or innovate, companies stagnate. Next, since companies have counted on the captive domestic market for most of their sales, when the population declines, these companies see their sales and revenue decline. And with fiercely competitive countries vying for the export market, the weaker, non-competive Japanese companies lose more and more of their market share. We are looking at an economic death spiral, and the government's QE program is just prolonging the inevitable, and will only increase the impact of any collapse.

-1 ( +3 / -4 )

Japan’s central bank has defied expectations it might expand its monetary stimulus to help get growth back on track, keeping policy unchanged despite data showing factory output fell in March.

Expansion of monetary stimulus won't necessarily boost demand for the products factories produce. Nor will it make skittish investors more confident, or heavily taxed consumers spend more.

Abenomics is more about deficit spending than economic revival. There's nothing in PM Abe's policies that make Japan a more business, and consumer friendly market.

0 ( +0 / -0 )

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