business

Japan's economy sinks deeper into worst postwar contraction in Q2

28 Comments
By Leika Kihara and Daniel Leussink

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

© Thomson Reuters 2020.

©2020 GPlusMedia Inc.

28 Comments
Login to comment

No surprise, it is a foregone conclusion. Almost all other countries are suffering the same fate, no thanks to the on-going raging pandemic. Q3 would be worse, perhaps much worse.. Be ready..

11 ( +13 / -2 )

Don't worry, COVID will be eradicated, cities will open up, jobs and supplies will be back and the olympics will be a success..................................

2 ( +10 / -8 )

I believe it. I went to a mall with my family the other day and had lunch but had no reason to buy anything such as clothes. With telework I can wear casual clothes. The only thing I have bought recently is computer and internet related items for entertainment.

14 ( +14 / -0 )

If they think it’s bad now, wait until Suga takes over and dismantles the health ministry.

4 ( +11 / -7 )

US daily cases are down to the same level as the beginning of April and continue to drop. The US economy will come roaring back and help Japan recover.

-11 ( +4 / -15 )

How can the government expect people to spend if they’re not helping households with rent freezes or utility assistance? Until that happens, people won’t be tempted to buy anything. I’m trying to save whatever I can during this absurd pandemic and hoping things will change for the better. The other problem is, we really don’t know when this will all stop. Good luck to everyone out there.

10 ( +12 / -2 )

There is more to this than the SARS-CoV-2 virus.

next virus will come along.

economies will suffer. The 1% will gain.

0 ( +1 / -1 )

Don't worry. US President Trump says he will produce a vaccine before (just before?) the election! Everything will be great!

1 ( +4 / -3 )

Domestic consumption will shrink further, and that for many reasons, the continued virus problems, the US-China trade war, the South Korean problems, the shrinking population..

And i also agree that it will get worse, at least until December. Because the " revenge " spending by consumers after the lockdown has died out very early.  At a point when customer service is very important, the retailers and restaurants have not learned that lesson, service remains bad, with a smile.

More and more foreign brands will leave Japan, return to a representation by a Japanese company rather than a full presence.

On top of that, car sales do not rebound and the regional banks will start defaulting as the local lenders can not repay their loans.

The Olympics are a drag on a revival, not the restart button they could have been.

Government does not have a clue, the restaurant coupon scheme made so complicated again for no reason but to put money in some pork barrel companies. Nothing easier but to sent every citizens coupons to be redeemed in restaurants and the restaurants to recover the money from government. Unused coupons are no problem. BUT it can only work if the restaurants get their money when cashing in the coupons within 7 days.

I don't see that happen.

I am glad with Suda, though.  He brings temporary stability, if nothing else, and might be strong enough to finally sideline Aso San, a drag on Japan by himself.

-6 ( +2 / -8 )

You simply forgot, that all those nice and new cashless payment methods need at least a cashless income beforehand....rofl

5 ( +5 / -0 )

Gov’t: Please spend money?

People: Sure, can I get a wage please?

Gov’t: No wage! Only spend!

11 ( +14 / -3 )

Don't worry. US President Trump says he will produce a vaccine before (just before?) the election! Everything will be great!

Your "president" is a businessman first and a "president" last....if even at all! Is the cure is produced, do you think an unhinged, power drunk, selfish fool will give this to Japan or other countries easily? or sell it to other countries within a just reason? Or even trade fairly! And you believe this? Think for yourself! Don't be sheep!

3 ( +5 / -2 )

Japan's economy sinks deeper into worst postwar contraction in Q2

Of course. The world is doing badly now. Not just Japan.

If they think it’s bad now, wait until Suga takes over and dismantles the health ministry.

At that point we will be screwed

0 ( +3 / -3 )

Has Japan considered reopening travel with Countries it previously had routine business with, provided travelers are previously checked for COVID-19 before boarding?  (e.g. International travel between U. S. and Japan, previously contributed to tourism and international business).

0 ( +0 / -0 )

@Proxy

The US economy will come roaring back and help Japan recover.

Roaring back? So small and midsized companies that went bankrupt are just going to pop right back up? Unemployed people and people behind on their bills are suddenly going to have all this money to go spending? A recovery won't be starting any time soon. For any country.

4 ( +5 / -1 )

Th problem is lack of consumer spending. Instead of giving truckloads of cash to well-connected companies, give everyone 100,000 yen (or more) in shopping vouchers. Can't be that hard to do.

6 ( +6 / -0 )

People: Sure, can I get a wage please?

Gov’t: No wage! Only spend!

I don't get your pont. The government doesn't pay your wages unless you're central govt civil servant. If you've got a gripe about pay, why not blame the person or organization who pays you?

-2 ( +3 / -5 )

I notice that there is no statistics covering the lost revenue generated by tourism, and the service industries this must add ?% to Japans economy.

3 ( +3 / -0 )

Guys is this your first day or what? Government doesn't have any money, that's why we have taxes.

0 ( +0 / -0 )

The world's third-largest economy shrank an annualised 28.1% in April-June, more than a preliminary reading of a 27.8% contraction,

A few points.

First, the revision was only 0.3 points, not a major change.

Second, compared to other countries. Japan is in pretty good shape.

US -32.2

-3 ( +1 / -4 )

Well, when government officials are extorting money left and right, and giant companies are paying minimal wages, yet prices continue to go up, it's not rocket science. The gap between the rich and poor will only get bigger. Thrown in the worldwide pandemic, and it only complicates things.

When your leaders only talk about a fictitious olympics and banning tik tok as your major priorities in a time where it is not, your entire system is bound to collapse at some point. We are ALL screwed.

2 ( +2 / -0 )

I don't get your pont. The government doesn't pay your wages unless you're central govt civil servant.

First point. I am a civil servant. So they do pay my wages.

As for those that work privately. Private institutions are governed and controlled by labor laws and regulation written by, government. When Japanese labor laws are lacking, private institutions are free to run their racket.

On top of this, the government has done nothing but raise taxes, raise pension costs, raise financial obligations of citizens and nothing in the realm of raising or regulating companies.

TL;DR: It all comes full circle back to gov’t for why the economy fails and fails the people.

-3 ( +1 / -4 )

@GrungeMaster

Private institutions are governed and controlled by labor laws and regulation written by, government. 

How many of those laws and regulations prohibit employers from giving raises to their employees?

I am a civil servant. So they do pay my wages.

Alright! A Japanese civil servant is a member of the Japan Today community. You've got a pretty strong labour union. What did they say when you and/or your colleagues took your salary grievance to them?

"the government has done....nothing in the realm of raising or regulating companies.

Corporate Japan has been raking in the highest profits in recorded history over the last few years. Really, nothing?

2 ( +2 / -0 )

I am putting every single penny away, refuse to spend any money other than what I absolutely need which is food, pay rent, utilities and so on. Because rents are not going down in Japan, the government is not protecting people if they get evicted and with the low amount of testing being done this virus is going to only get worse. In addition, with Abe's crony taking over as PM nothing is going to change and or get worse.

2 ( +3 / -1 )

I’ve given up on Japan but I am benefiting from the mismatched policies which have ‘damaged’ the domestic economy here-thanks LDP!

1 ( +2 / -1 )

Japan economy has suffered since 1985 when the Plaza Accord was signed destroying Japan's economic rise, from 80% of America GDP before we signed the deal to %20 of America's GDP in 2019 before the pandemic hit, it was bad before.

We had dozens and dozens of Japanese Prime Ministers who tried to fix it, but magic cannot happen when you sign the worst deals for your country in over 1000 years. China will be the next one to experience what it's like to sign an agreement like Plaza Accord and the consequences for your economy, companies, innovation, wage rise, poverty reduction, all will be affected by the humiliation agreement forced on Japan first and China will be next.

0 ( +1 / -1 )

Under the unprecedented circumstances it is only necessary for The Government to triumph if the the good man stands by and does nothing. This is plausible as Japanese society has designed it’s citizens to be nothing but Patsys.

0 ( +0 / -0 )

@JJ Jetplane

Recessions are good, in the long term. Japan has had zombie companies eating away at the economy for 30 years and the US for 20. It is time that the deadwood gets pruned and stop blocking the sun from shining on new growth. Really, unemployment is not any worse than it was in the early 80's and people survived. Painful but, like going to the dentist, time to pull the tooth. Companies that survive by the end of the year will come roaring back and former emplyees of companies that were not so resilient will get scooped up by the roaring economy.

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