business

Japan's retail sales post sharpest fall since 2015 as tax hike hits demand

51 Comments
By Daniel Leussink

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51 Comments
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Most Japanese are already paying upwards of 50% of their salaries in taxes, health insurance, the pension scam and all these taxes will increase next year.

Not only those taxes, Japan is the land of fees. Pay for parking, now even at many restaurants. pay for reikin, atamakin, pay for toll fees, pay to have your non combustible trash hauled off, pay for hokin and shakkin. If you own any business, so many fees and registrations.

0 ( +0 / -0 )

@YuriOtani - Sure, why not ask them American forces to leave Japan. Wonder if there'd be any impact - what do you think ?

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Time for people here to say good bye to Abe and to Corrupt Politicians and ask themselves ... where does all the money go ?

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I call this story BS and misleading. IMHO, The trade war and its impact on export has a much more direct correllation to a softening consumer sentiment (and retail spending) than the consumption tax hike.

In fact, there are economists (including ex reserve banker) who are saying Japan needed to do it rather than fool around with ineffective monetary policies (interest rate).

-1 ( +0 / -1 )

Prices rise, demand falls, simple economics. Lets save tax money by letting the Americans pay for their own bases. Japan needs to cut expenses at all costs!

You think it's "simple" economics? Right and if the bases left, you can bet your life that the defense budget of Japan would explode even higher than it is today! All while being said from the comfort of your home in America!

1 ( +1 / -0 )

Where’s a ¥1,000,000 crab or melon when you need one?

One of those sales usually boots the economy no end, doesn’t it?

If one of those sales actually affected the economy overall we really are in a bucket of guano!

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I don't live in Japan but have traveled there several times the past few years. The prices are quite noticeably higher now (for everything) from the last time I visited last year. I guessing the prices for things with top out at the 2020 Olympics.

3 ( +3 / -0 )

How much stuff does one need?

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So how many are shocked ? Of course and I think they will lose more taxes as higher tax with alot less buyers. We had same earlt 90s congress passed a luxury tax on highline autos, boats and other items. Americans stopped buying them, Many went out of business of overseas to manufacture lower costs so they got no income tax from workers loss too. Americans as they age are fleeing high tax states like NY, IL, CA and most of NE and West coast. Some states like New Jersey have exit taxes :) and they have almost non funded pensions taxpayers will bear soon. https://fee.org/articles/americans-are-leaving-states-with-high-tax-rates-data-show/

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Prices rise, demand falls, simple economics. Lets save tax money by letting the Americans pay for their own bases. Japan needs to cut expenses at all costs!

0 ( +1 / -1 )

kibousha - The government is doing all it can to signal the people that things aren't going well. What would people do ? Save like mad.

Yes! save you money at home as cash and send it overseas to banks where you get s return on your savings.

@Kentarogaijin

 If you have a choice, get yourself, your family and your money out of Japan asap coz the poop is really gonna hit the fan after the Olympics.

By 2022at least 50% of Japan's population are gonna be broke!

Cut the drama ladies..

Drama? Why is it that every Japanese person who posts in this thread refuses to accept the reality of Japan's pending economic doom? Most Japanese are already paying upwards of 50% of their salaries in taxes, health insurance, the pension scam and all these taxes will increase next year. The middle class is shrinking rapidly. Over 50% of families have no disposable income. Over 60% of the workforce are on short term or part time salaries, many of which are being forced to work themselves to death just to keep their jobs. The pension system is a huge failure and most people will only receive pittance pension for a few years after retirement. And, let's not forget that 25% of Japanese kids are living in poverty. This might be normal for Japan, but it is far from normal by international standards. Yeah, no drama there - if you are Japanese suffering from cultural blindness, of course..

3 ( +3 / -0 )

With Tokyo 2020 just around the corner, plus salary bonus, and New Year gift buying, expect an uptick in spending real soon. Promising times ahead.

Ticking along nicely then eh? I admire your devotion to your leader, sort of.

Where’s a ¥1,000,000 crab or melon when you need one?

One of those sales usually boots the economy no end, doesn’t it?

/s

0 ( +0 / -0 )

Tax and spend, repeat. Recipe for a country’s downfall. Hey Venezuela.

5 ( +5 / -0 )

The problem is that Japan already has the highest prices in the World for basic things, and for "luxury" items the price is astronomical. So any additional tax hike is going to have an impact upon spending habits.

3 ( +3 / -0 )

Get ready for tomorrow's article of the government saying "It could not have been predicted" and, "that they can't understand why the Japanese are not carrying out their RESPONSIBILITY and spending for the economy regardless of how it might hurt them". Then prepare for talks of another tax increase to make up for the lack of funds predicted to have come in after the tax hike.

I'd laugh, if it weren't always me and every other person here paying more for the stupidity of these politicians.

4 ( +4 / -0 )

Disillusioned makes allot of valid points. Japan sometimes has a way of surprising but I think in this case the writing is on the wall. Im seeing the continuation of shuttering businesses, but perhaps there is development in Azabu, Roppongi Hills or Odaiba or somewhere else. Perhaps a war or participation in one, defense industry and increased tourism campaigns will spark something, who knows. In Japans case, extreme protectionism seems to have sputtered out. Maybe some radical deregulation of the real estate industry, more incentives for cheap foreign labor and international communities.. I dont know.

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Meanwhile we keep hearing how much cash companies are sitting on. How about taxing that instead?

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The government is doing all it can to signal the people that things aren't going well. What would people do ? Save like mad.

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wtfjapan - actually the experts stat that the tax needs to be raised to 25%+ yesterday for any chance of balancing the budget, while it isnt impossible it is if Japan want to basically destroy its economy beyond repair

I think Japan passed that threshold twenty years ago.

3 ( +3 / -0 )

Wasn’t the IMF recommending 20%?

actually the experts stat that the tax needs to be raised to 25%+ yesterday for any chance of balancing the budget, while it isnt impossible it is if Japan want to basically destroy its economy beyond repair

1 ( +1 / -0 )

Edit: By 2022 at least 50% of Japan's population will be broke!

3 ( +4 / -1 )

@Ganbare Japan! - Its not all doom and gloom. There is always a short term dip in consumer spending after a tax hike. But it is temporary as history tells us.

As history tells us? Which version of history are you referring to? The factual one or the delusional one? The factual one states that most department stores had a drop in sales up 25% after the first sales tax hike and they never recovered. There has been zero growth in the economy since 2008. There are only three or four months a year showing an account surplus. The rest of the year shows a deficit or no growth at all. It's one thing to base your delusional economics on a month by month status or even a yearly status pretending the Olympics are going to drag the Japanese economy out of its slump. A country's economy is measured in decades and Japan has been in a downward spiral for the last four decades. Salaries are 20% less than they were twenty years ago, but the cost of living has increased by 25%, plus the sales tax. I'm afraid it is all doom and gloom. Post-Olympics Japan is going to see a major increase in unemployment and the boost to the economy from foreign visitors will be very short lived. By 2002 at least 50% of Japan's population are gonna be broke!

10 ( +10 / -0 )

according to many, Corporations are sitting on record levels of cash. Figure out a way to get them to disperse? or will the savers just hoard it? I have no idea how to fix this place

1 ( +1 / -0 )

I see allot of the same anti-Trumpers commenting on the tax increase in Japan, and its effect, but if the Dems win, expect the same thing to happen in the US.

They will just return to their old ways

-3 ( +3 / -6 )

With Tokyo 2020 just around the corner, plus salary bonus, and New Year gift buying, expect an uptick in spending real soon. Promising times ahead.

Ticking along nicely then eh? I admire your devotion to your leader, sort of.

4 ( +4 / -0 )

But this will turn into an UPward trend if we raise the sales tax to 20%.

1 ( +1 / -0 )

You’d think the Japanese govt would know by now the instincts of the Japanese people. A people, who absolutely from day dot, saw this as an opportunity to raise a collective middle finger at the tax policy.

Then again, if the LDP pay for everyone’s Ohanami, kaaaa-CHING!

4 ( +4 / -0 )

Its not all doom and gloom. There is always a short term dip in consumer spending after a tax hike. But it is temporary as history tells us.

With Tokyo 2020 just around the corner, plus salary bonus, and New Year gift buying, expect an uptick in spending real soon. Promising times ahead.

-19 ( +1 / -20 )

We're running out of arrows, please send more x x

“I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.” ― Winston S. Churchill

7 ( +7 / -0 )

Wakarimasen,

They have tried the same things over and over again,like spending tons of cash on roads and bridges.

I don't think they have tried 'everything',simply because they aren't capable of thinking outside of the box.

4 ( +4 / -0 )

Man,

Abe and the LDP have to go.

Things can't keep going on like they are.

The kicking the can down the road is becoming even noticeable to the apathetic locals.

5 ( +5 / -0 )

BoJ should just send everyone 500,000 to spend.  They have tried everything else.

6 ( +8 / -2 )

It's just Abonomics,? Pathetic and destructive but Abenomics. Really just raise wages. Instead an urge to raise wages, that worked out well. But raise tax so less money to spend and it's a disaster, great job Mr biggest debt in the world.

6 ( +6 / -0 )

some analysts have warned the tax hike, previously postponed twice, could leave the economy without a growth driver amid a slump in exports and production and as other factors drag on the consumer sector.

Unfortunately those warnings fell on deaf ears.

Wasn’t the IMF recommending 20%?*

Yeah. The IMF are what I consider to be educated idiots.

7 ( +7 / -0 )

Wow surprise surprise! NOT!

5 ( +5 / -0 )

Well, what an astonishing surprise! Who could have possibly imagined this? Oh that's right - anyone with a pulse.

Abenomics - the miracle that keeps on giving.

10 ( +10 / -0 )

Wasn’t the IMF recommending 20%?

4 ( +4 / -0 )

The Japanese government increased the nationwide sales tax to 10% from 8% on Oct 1, in a bid to fix the industrial world's heaviest public debt burden

Stop with this BS, this country will never be able to fix the debt issue by just increasing the sales tax. It's a fact. The Japanese government has spent decades ruining the country and the population will have to pay a high price for that at some point. And this will be painful for them, very painful.

14 ( +14 / -0 )

You didn't need to be a rocket scientist to foresee this, it was just obvious. The only ones who apparently are surprised are the Japanese government and the nationalists coming to this site. The income of the majority of the population here is too low to easily absorb such sudden increase in prices even moderate (from 8% to 10%), and that tells a lot about the state of Japan.

12 ( +12 / -0 )

And all along here Abe looked to soften the blow by offering consumers all sorts of points and what not, if they went cashless.

Abe really is clueless about the economy here! But I bet any money, it wont affect his polling numbers much!

12 ( +12 / -0 )

Gees! This article could have been written three years ago when this increase was first postponed. Wait until the increases in city tax, health insurance and pension increases hit next year. If you have a choice, get yourself, your family and your money out of Japan asap coz the poop is really gonna hit the fan after the Olympics.

14 ( +14 / -0 )

I’m shocked that a tax increase would actually negatively impact an already deflationary economy -amazing!

12 ( +12 / -0 )

Geez told ya so! Waiting for the "I (heart) Japan" fan club to explain this one away!

13 ( +13 / -0 )

What a surprise!

Only complete ignoramuses didn’t see this coming.

16 ( +17 / -1 )

I mean even a simpleton can understand that higher prices means less spending , means less tax revenue, but no the J governement thinks raising taxes is going to fix Japans wasteful spending issues

18 ( +18 / -0 )

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