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Bottom may fall out of Japan's economy if demand keeps slumping: bank lobby head

6 Comments

The bottom may fall out of Japan's economy if inbound tourism and domestic demand continue to slump, the head of the country's banking industry lobby said on Thursday, adding the economy has been hit by the coronavirus more seriously than expected.

The remark came as global stock markets plummeted due to concerns over the coronavirus that has claimed nearly 9,000 lives worldwide.

The world's third-largest economy shrank an annualised 7.1% in the three months through December, revised data showed earlier this month, more than a preliminary reading of 6.3%.

"The situation is much more serious than I expected at the beginning of the year," said Makoto Takashima, chairman of the Japanese Bankers Association and the head of Sumitomo Mitsui Banking Corporation (SMBC).

Takashima welcomed the Bank of Japan's move on Monday to ease monetary policy, saying it could contribute to market stability.

The central bank pledged to buy risky assets such as exchange-traded funds (ETF) at double the current pace.

© (c) Copyright Thomson Reuters 2020.

©2020 GPlusMedia Inc.

6 Comments
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Unless the ordinary working of people do not receive aid to pay bills then defending the yen and buying ETFs won’t mean Jackshit!

4 ( +4 / -0 )

Crippled by taxes at every turn, it is difficult for small businesses to turn a decent profit. Every time money changes hands, Mr Abe grabs his ten percent. A restaurant owner buys meat, fish and veg to make the meals that give him an income. TAX. He puts gas in his car. TAX. He pays his staff. TAX. His staff deliver food. TAX on their income. TAX on the gas. The chairs, tables, knives, forks and ohashi. TAX. And TAX on the dinners they eat and TAX on the tips.

And what do they do with the money they collect? Lavish life styles, car with driver, entertainment such as cherry blossom parties, etc. The civil service in Japan does far too much. Much of it could be done by computer.

A lot of the money they collect is completely wasted. Nanjo City recently put in a mini bus service. There is a fleet of mini buses, with drivers. Splendid. Seems like a good idea, but nobody uses them.

Abe buys 105 F-35s at astronomical prices. Wasted money.

4 ( +6 / -2 )

Bertie - absolutely right.  Taxes here are exorbitant.  and the money spent on rubbish.  Just printing yen will do nothing to remedy this.  and propping up zombie companies also a waste.  Good example of what happens when a bubble bursts (over 20 years ago now and counting) and canary in the coalmine for how the rest of the world will end up.

3 ( +4 / -1 )

There is no concept ,or history, of the people holding government in Japan accountable. Until the late 19th century, one could lliterally have lost his head for attempting to do so. Democracy's roots are very shallow. Knowing one's place is valued, accountability not so much. Invalid CSRFx2

5 ( +6 / -1 )

All very good points, but even if Abe did as Trump did, and reduce the overhead that small businesses must comply with, I dont think Japanese would know what to do; too risk averse and want something "safe" and Japanese. Extremely annoying to deal with.

As expat posted, the roots are too shallow.

5 ( +5 / -0 )

And what do they do with the money they collect? Lavish life styles, car with driver, entertainment such as cherry blossom parties, etc.

I’d encourage you to check where the government does spend its 100 trillion yen budgets each year, because the vast majority of it does go to the social welfare and health system, and that alone is multiples of the amount of revenues from the consumption tax.

I’m not defended the stupid spending that the government does on the fringe, but we must be clear that that is not the only place the money goes, by any means.

The civil service in Japan does far too much. Much of it could be done by computer. 

You will get no disagreement from me that there are waaaaay to many warm bodies frittering away time in city halls!

Nanjo City recently put in a mini bus service. There is a fleet of mini buses, with drivers. Splendid. Seems like a good idea, but nobody uses them.

This is probably funded by Nanjo City local taxes, not consumption tax.

1 ( +1 / -0 )

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