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Japan's trade shrinks in July; exports sink 14%

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Japan posted a trade surplus of 513.5 billion yen ($5.1 billion) in July, though exports sank 14% from a year earlier as the yen surged against the dollar, the government reported Thursday.

Trade surplus in July.....

The fall in exports was outpaced by a nearly 25% drop in imports, suggesting persisting weakness in domestic demand. Both were the sharpest monthly year-on-year drops since 2009.

Exports fall, and imports fall.....

Where is the surplus?

2 ( +3 / -1 )

99 to the edollar is rediculous for such a weak economy.

1 ( +6 / -5 )

99 to the edollar is rediculous for such a weak economy.

Not when one considers just who is holding the paper on Japanese debt. The weak debt ridden economy would have sunk most countries a long time ago.

The Japanese people themselves are propping up their own government with their hard earned savings and are not getting much of a return on their investment.

10 ( +10 / -0 )

Well... If Japan made good pizza I would not have to buy it from Costco (imported). If Japan made good video games that did not cost 10,000 yen I would not have to import them for 45$ from Amazon in the USA. If Japan made decent TVs that were not overpriced I would not own a Korean made LG tv (which is reviewed higher than ANY Japanese made tv on the market). Lets see... Smart phones. Only two choices there. American designed chinese made iphone or Korean Galaxy. The list goes on and on and on. Make better stuff and make it cheaper. Japan loves Japan stuff and buys it up, but in the ten years I have been here I have noticed more and more every facet of Japan manufacturing catering more to the Japanese market and less and less to the what the rest of the world wants to buy. Cars are a perfect example, outside of the Japan no one wants to buy these boring utilitarian boxes that EVERY car manufacturer now produces in the millions.That is perfectly fine if you want to keep exports nice and low. Just like in Japanese politics, Japan is turning inwards again. More people and companies want the USA out, nationalism is on the rise. When you turn inwards, do you really think exports are going to succeed? Its a no brainer fellas. There is a reason Meji was a rocking awesome time in Japan, Sakoku came to an end. But hey, lets fight to bring Sakoku back and then whine about the consequences.

5 ( +8 / -3 )

When this says exports sink, I believe they only mean the value of the exports denominated in yen (not necessarily the amount of goods and services produced).

0 ( +1 / -1 )

hobbling efforts to keep the economic recovery on track.

What recovery? A bloated stock market financed by easy money looted from the taxpayers is not a "recovery" by any means.

The Japanese people themselves are propping up their own government with their hard earned savings and are not getting much of a return on their investment.

The people beneficiaries to an extent, because propping up zombie companies and a zombie economy has kept them more or less employed, and allowed them to maintain something of the quality of life they are used to. But had the deadwood in the economy been thrown out a couple decades ago, and new growth allowed to take it's place, the people would likely be better off than they are now.

99 to the edollar is rediculous for such a weak economy.

Something can be weak only when compared to something strong. As all developed economies are weak, all currencies are weak. Simply printing out more money is not going to devalue a currency when other countries are doing the same thing. People call capitalism a "race to the bottom", but that is opposite of the truth. The true "race to the bottom" is the result of crony-capitalism, as a country's industries pressure their leaders to give them an unfair advantage over their competitors. This is unfair to consumers and taxpayers, who end up paying the cost, and leads to the problems we are now facing.

6 ( +9 / -3 )

Yes, lets convince the people how bad is a strong yen so we can apply the hidden taxes!!! Good job

1 ( +2 / -1 )

Another unsaid effect of demography. Old people are not flooding outside for tourism or making their life any easier because no money. Ex: my mother in law.

4 ( +4 / -0 )

Time for another round of Bazooka from Kuroda BOJ & Aso MOF:

Increase salaries of government hospital nurses, policemen, teachers and soldiers by 10% each, especially younger ones at entrance level, but not that of old senior bureaucrats. BOJ to buy Reits especially those that relate to "public housing". MOF to start a massive cheap high quality "big apartment housing program" like that of Singapore, where average size is about 100sqm. This will promote more and bigger family units formed. There are enough roads and bridges, but not enough sizeable apartments for families. BOJ to buy municipal bonds issued for revitalizing smaller cities. BOJ to buy foreign bonds. Massive build up of child care centres in big cities like Tokyo & Osaka and subsidies to parents and teachers.
-3 ( +1 / -4 )

MsDeliciousAug. 18, 2016 - 10:52AM JST

99 to the edollar is rediculous for such a weak economy.

Not at all, when japan runs the third biggest current account surplus in the world and has run a current account surplus for every quarter, but one, for the, for the last 25 years.

Should be much stronger, about Y75 to the US Dollar and would be, without the constant currency manipulation/ mercantile mindset of the Japanese economic and political elites.

25 years ago these current account surpluses were a luxury for Japan , but now they're a necessity because without them the Japanese government wouldn't be able to finance its debt in Yen.

They will eventually disappear because the dankai generation are now spending their saving in their old age and as a result Japanese foreign investments are decreasing. The only question is?

1 ( +4 / -3 )

They will eventually disappear because the dankai generation are now spending their saving in their old age and as a result Japanese foreign investments are decreasing. The only question is?

But the older generation is of the belief that they have to pass their money down to their children. Plus I'll bet the government is counting on it as well, as the estate taxes here are onerous and the government will make a killing in collected taxes.

0 ( +1 / -1 )

mr_jgb

Time for another round of Bazooka from Kuroda BOJ & Aso MOF: 1. Increase salaries of government hospital nurses, policemen, teachers and soldiers by 10% each, especially younger ones at entrance level, but not that of old senior bureaucrats.

Great idea, so the public debt increases. It's not the public sector who need increased salary increases, they are paid well, its the private sector, who have the national surplus, who need to be forced to spend on capital expenditure.

mr_jgb

BOJ to buy Reits especially those that relate to "public housing".

Another great idea. Then the BOJ can become the biggest landlord in Japan, as well as the two positions it already has, of being the largest owner of government debt (40%) and the largest shareholder in 80% of the companies that trade on the Nikkei

mr_jgb

MOF to start a massive cheap high quality "big apartment housing program" like that of Singapore, where average size is about 100sqm. This will promote more and bigger family units formed.

A good idea, 30 years ago and should have been done, but its too late now with shrinking demographics. The Singapore housing policy was based on a public in need for housing. In Japan we have entered an era of housing needing a demand, one weakening with each passing year.

mr_jgb

BOJ to buy foreign bonds.

Impossible, it would be flagrent currency manipulation and Japan, with her dependence on exports, would be the biggest loser the currency/trade war that it would cause

mr_jgb

Massive build up of child care centres in big cities like Tokyo & Osaka and subsidies to parents and teachers.

More public debt and closer to the day the government default on its

1 ( +3 / -2 )

Massive build up of child care centres in big cities like Tokyo & Osaka and subsidies to parents and teachers.

Rather than treating the symptom, we need to treat the cause. Families need two incomes to raise children because the cost of living is so high. The cost of living is too high because the LDP tariffs agricultural goods to buy the votes of the farmers (who get three votes per person), and because Japan Inc twisted the arms of the government to prevent foreign access to the domestic Japanese market. This has made Japan's economy uncompetitive, inefficient, and overpriced.

Rather than address the problems which make Japan's economy uncompetitive and overpriced, the government instead uses public funds to keep it going. The result is declining population (because people cannot afford to feed and house children), and a climbing national debt. The cost of building daycare centers, teachers, and paying subsidies to families would be higher than the revenue gained by increased number of women in the workforce. That being the case, we would be worse off than we are now, which is bad enough.

8 ( +8 / -0 )

Anyone heard of Adam Smith or David Ricardo? No? Didn't seem like it.

-1 ( +0 / -1 )

Cars are a perfect example, outside of the Japan no one wants to buy these boring utilitarian boxes that EVERY car manufacturer now produces in the millions.

I need this explained to me. Toyota and Nissan do quite well in North America and Europe as well as other markets. Further, those companies would not be producing those “boring utilitarian boxes” if people did not buy them. Companies are in the business of producing what they can sell for a profit, not what you think they should be producing.

Rather than treating the symptom, we need to treat the cause. Families need two incomes to raise children because the cost of living is so high. The cost of living is too high because the LDP tariffs agricultural goods to buy the votes of the farmers (who get three votes per person), and because Japan Inc twisted the arms of the government to prevent foreign access to the domestic Japanese market. This has made Japan's economy uncompetitive, inefficient, and overpriced.

Three votes per person? Nonsense. There is a voter disparity but it is not occupation specific, it is region specific. If you live in a certain region your vote counts more whatever your occupation.

What areas of the domestic economy are foreign companies locked out of? Computers? I see Dell and HP all over the place. Automobiles? BMW and Mercedes do very well in Japan. Retailing? Seiyu is 100% owned by Walmart. Nissan is controlled by Renault. Sharp is now controlled by Hon Hai.

And, if you think Japan is expensive, you need to spend some time in Britain or better yet Norway or Sweden. I spend part of the year in the UK and own a home in the UK. Aside from food, everything I use in the UK is as costly as Japan or much more expensive.

Your post reads like you have read nothing about the Japanese economy since the 1980s and/or have no experience with any European countries.

-3 ( +2 / -5 )

Exports fall, and imports fall.....Where is the surplus?

It's in the difference of the value of a foreign currency with Japan's devalued yen.

0 ( +0 / -0 )

Three votes per person? Nonsense. There is a voter disparity but it is not occupation specific, it is region specific. If you live in a certain region your vote counts more whatever your occupation.

And these regions are mainly (almost entirely) agricultural, are they not?

What areas of the domestic economy are foreign companies locked out of? Computers? I see Dell and HP all over the place. Automobiles? BMW and Mercedes do very well in Japan. Retailing? Seiyu is 100% owned by Walmart. Nissan is controlled by Renault. Sharp is now controlled by Hon Hai.

Are you talking about Dell Japan, and HP Japan? These are essentially Japanese companies, much like the Disney Resorts in Tokyo. The products they sell are not imported from America, they are produced by Japanese subsidiaries in Japan and China. Walmart owns Seiyu, but relies on Japanese distribution systems; in America Walmart has it's own system. Costco does well, very much so, but getting into the Japanese market was no cakewalk.

Automobiles? Only 7% of cars on the road are imports. German makers are more common, but the only reason this is so is because Germany had the balls to confront Japan about the practice of pricing imports out of the market. Germany threatened to do the same thing to Japanese imports, and Japan backed down, and so did the prices of German cars.

The car makers are for the most part irrelevant, as much, or most, of their sales, design, and even production are outside Japan. That being the case, they are Japanese mostly in name, not practice. And not a single Japanese car maker has earned a profit in domestic Japanese sales in years, have they?

As for cost of living, parts of Europe are expensive. I own a large home in Southern France, but as nice as it is, it was a fraction of the price of my much smaller Tokyo mansion. I like being about to buy a baguette for 80 cents there, instead of paying 400 yen (plus tax) here. I like being able to get a basket of corn for the same price one year costs here in Tokyo.

Unfortunately, Europe seems to be following in Japan's footsteps, and the increase in the cost of living is one of the results. This will eventually lead to stagnation and decline (as it has in Japan).

3 ( +3 / -0 )

Japan demographics realities mean domestic demand will generally be weak as a trend. Therefore the possibilities for growth are export sector and tourism from foreigners. Both require a much weaker Yen to be competitive. BOJ & MOF should work toward that outcome even if there are criticism and obstacles. Life is full of obstacles. Perseverance and single-mindedness in measures can bring about desired outcome if given enough time and maximizing opportunities. It is particular difficult for the Japanese mindset, which lacks flexibility, boldness and global language distribution skills though it has good step by step engineering prowess and detailed quality in its products. Macro-wise even if domestic demand is weak, micro measures to boost domestic demand at the right pockets can be positive; like more funds into care-care centers in big cities instead of more roads in rural areas, bigger public housing apartments instead of bridges and faster Shinkansen (which are already world class), higher salaries to younger working adults in public sector instead of that to senior older bureaucrats, more performance based compensation instead of standard higher pay as you stay longer and older, productive yet shorter hours instead of long hang-around pushing papers and meetings to get consensus without making decisions phenomenon. Don't continue the defeatist "musukashii" mindest. Bring out the Boozoka! To weaken the Yen is not too difficult.

0 ( +0 / -0 )

Japan is up s*** creek!

2 ( +2 / -0 )

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