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Weak data latest bad news for Abenomics

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Weak consumer spending? Big surprise.. But fear not, the LDP policy genius machine has a solution - increasing the sales tax again next fiscal year ( without any compensation in form of an income tax cut or bracket adjustment) will turn things around for sure . Without a doubt THAT particular gem is going to spur the consumer masses to rush out and gloriously spend more while celebrating the escape from deflation. Really, it's true..because Shinzo says so.

16 ( +19 / -3 )

Japan economy is doomed. Abenomics or any plan will not work. Abenomics is just worse than the others. The Japanic has hit the iceberg and is slowly but surely going vertical

10 ( +18 / -8 )

Abenomics = The single greatest economic failure of the Industrial / post Industrial Age.

It was a scam to use taxpayer funds to fund pork belly projects of the LDP's cronies in the construction industry in exchange for kickbacks. A first year university student could've told you that Abenomics wouldn't work.

18 ( +26 / -8 )

I'm sure it's just technical weak data, just like the technical recession. Fear not, there's nothing like adding 3 more arrows to solve this. The tally is now at 12 arrows.

12 ( +17 / -5 )

So, now we wait for Abe to give a speech where he puts the blame on consumers not spending enough, or taking loans to fund their "enhanced" cup noodle purchases.

Victim-blaming ahoy!

10 ( +13 / -3 )

"That poor reading has prompted Tokyo to consider a special stimulus package to counter the downturn. "

How about not giving trillions to other nations just to pat yourself on the back?

12 ( +17 / -5 )

The arrows of Abenomics struck deep into the heart of the Japanese economy, leaving a barely-twitching corpse. The LDP's answer, of course, is more of the same.

13 ( +16 / -3 )

Ye Gawds! Abe is looking positively GRIM in the above photo.

Meanwhile, household spending for the month fell 2.4%, underscoring concerns that consumers remain cautious.

I think this more underscores the fact that consumers remain POOR

"Cautious" is a word used for people who actually have disposable income. Not, for many middle class/working class families who can just about scrape by with cost cutting at every opportunity.

6 ( +9 / -3 )

"Falling or stagnant prices may sound good for consumers but tend to act as an incentive to put off spending in the hope of paying less for goods down the road."

I see that the author of this piece is "economizing" by taking the same phrase, making some minor tweaks, and copy-pasting it into article after article -- never mind that the sentence itself is biased and has no place in a professionally-written piece of journalism.

Abenomics was never about reviving the economy. It was about tricking the populace and looting whatever the LDP and its cronies could grab while the country is still relatively healthy.

Those short-term do-nothing prime ministers we laughed at in 2010 and 2012? Wouldn't you like to have them back? I know I would. The economy wasn't booming, but we could save money, things were getting just a little better each year, and we certainly weren't losing anything.

7 ( +10 / -3 )

“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.” - W.Churchill

4 ( +7 / -3 )

The main problem is that the Japanese people are still in a deflationary mindset. As a whole, they'd also rather save than invest, even if the bank paid 0 interest. On average, a Japanese household has 18,000,000 yen in cash. However, that money's not going anywhere at the moment.

-15 ( +3 / -18 )

As a whole, they'd also rather save than invest, even if the bank paid 0 interest.

After watching the colossal 1980s stock market bubble that sent the Nikkei to more than double its value today and which ruined anyone who got in too late, can you blame them?

People would be much more confident about investing if there were safe, solid returns available. All that is offered to Japanese savers is the 0.01% returns at the bank and the casino that is the stock market.

3 ( +6 / -3 )

18,000,000 yen in cash ?? No way, more like 1,800,000

1 ( +5 / -4 )

The weak figures came despite signs that Japan’s labour market remained tight, with the headline unemployment rate at a two-decade low of 3.1%, down from 3.4% in September.

Japan needs to get in line with other industrialized countries on reporting unemployment information. This makes no sense, if unemployment were in reality this low it would be a sign of a booming economy not one in recession.

The under-employment figures should be shown, as anyone who is reported as working even ONE hour a week is considered to be "employed" and that is just BS.

3 ( +8 / -5 )

kickboardNov. 27, 2015 - 12:04PM JST

The main problem is that the Japanese people are still in a deflationary mindset. As a whole, they'd also rather save than invest, even if the bank paid 0 interest. On average, a Japanese household has 18,000,000 yen in cash. However, that money's not going anywhere at the moment.

You should do a bit more research into those statistics. You'll find that there is a considerable generation distortion of those figures.

95% of the savings in this country are held by those over 65. Something like 4% is held by those aged 65 - 50, while those under 50 hold only 1% of those savings.

If I remember correctly the average savings of people under 50 is only something like Y 2,000,000.

It's this generational distortion of wealth, added with wage rises not keeping up with price rises for this fall in spending.

Nothing to do with a deflationary mindset - such a nonsense expression.

7 ( +10 / -3 )

That downturn spurred the Bank of Japan (BOJ) to sharply increase its already massive bond-buying program—a cornerstone of Abenomics—effectively printing money to boost lending.

Oops there it is....when the next stimulus.....money printing .. is announced the yen will explode to the downside Japan is trapped, how can they keep the yen from sliding further? They can't sell US treasuries to buy yen cause Uncle Sam would whip their butt. It would have to come from private sector buying of treasuries so JP gov could dump them. Who would these private buyers be? Japan post anyone? That will work until it doesn't , then kurashu bang boom, and it's gone.

4 ( +7 / -3 )

Yubaru: The under-employment figures should be shown, as anyone who is reported as working even ONE hour a week is considered to be "employed" and that is just BS.

Governments collect tax information electronically. They are not going to forget data on weekly or monthly wages, or survey them to get an estimate. They have the exact information. Yet somehow they need to collect surveys of employment info, and release that info after tweaking it.

0 ( +3 / -3 )

Meanwhile, household spending for the month fell 2.4%, underscoring concerns that consumers remain cautious.

Consumers are not cautious. We are poor.

Falling or stagnant prices may sound good for consumers but tend to act as an incentive to put off spending in the hope of paying less for goods down the road.

That, in turn, tends to hurts companies’ expansion and hiring plans, denting the wider economy.

Well, then raise the minimum wage substantially. that will get you out of deflation.

while it struggles with a challenging demographic outlook that is expected to see its population shrink by tens of millions in coming decades.

With the population collapsing, prices fall. its called supply and demand. don't like it? immigration is the key.

4 ( +8 / -4 )

kickboard, Japan now has no average compensity to save. In the 80s the average family saved around 25% of income, but now the average family is spending its savings:

http://www.bbc.com/news/business-30603313

The problem is that the Japanese government hasn't worked out that we're now in the 21st century and the Prime Minister and his semi-feudal government only care about their own special interests. One of these is the rural electorate that chooses the government. He taxes the crap put of the cities and hands the money to construction companies and farmers who in turn re-elect him through the unconstitutional electoral system. Abe is a hopeless case of useless and only got elected because his grandfather was Kishi and the LDP supports feudalism over meritocracy.

ThonTaddeo, thumbs up, again. I am yet to find a single post of yours that I do not wholeheartedly agree with.

7 ( +10 / -3 )

The weak figures came despite signs that Japan’s labour market remained tight, with the headline unemployment rate at a two-decade low of 3.1%, down from 3.4% in September.

Nothing against the writer, of course - but I'm getting tired of the government using the low unemployment figure as a 'shining star' in the seriously worrying figures it publishes annually. It's an unrealistic & quite frankly unfair reflection on the actual job market - 40%+ in part time positions & growing.

0 ( +3 / -3 )

And yet again figures show just how much of a basket case the japanese economy is. Hopeless, just hopeless and there's absolutely no answer to it. The japanese people will just go on gamaning and shoganaiing themselves as per usual of course and so things will just steadily go on getting worse.

Frightening to consider what the economy and the state of the country will be in 10 years time. No wonder the country can't attract the rich elite foreign workers they desire. Who in their right mind, english teachers excepted of course, would come to japan for a one year contract on the such low wages offered?? No one.

0 ( +5 / -5 )

Abe has been steadily runing Japan. Well done, Mr Abe, if that's what he originally intended to do.

The obvious problem of Japan today is that supply far exceeds demand. And yet the government is all out to increase supply capacity by further deregulation while curbing demand by cutting back on public works projects and raising taxes---the surest way to recession.

The miracle is that nearly 50 percent of the people still support Mr.Abe. Have they all been brainwashed?

-2 ( +3 / -5 )

That the Japanese economy doesn't respond as expected (and hoped) to a tight labour market, suggests that something is broken and needs fixing. Not more of the same.

Their best idea is (yet another) special stimulus package. They should have learnt by now that band-aids don't fix broken bones.

overhauling the highly regulated economy has been slower than many had hoped.

They just aren't serious about it. Abe's advisors believe that the central bank printing money and the bureaucrats spending it will generate sustainable growth.

2 ( +5 / -3 )

My main question is why should I buy things I do not need? That does not make any sense.

I need food, and that does not count in the stats. Add it please and then you will see your fake inflation.

4 ( +6 / -2 )

Who will rescue the Japanese economy? The"politicians" sure as hell haven't got a clue what to do.

0 ( +3 / -3 )

Who will rescue the Japanese economy? The"politicians" sure as hell haven't got a clue what to do.

Right, their sole goal seems to be to win elections, and they have a formula worked out for that which doesn't involve rescuing the economy.

1 ( +5 / -4 )

I notice even most of the Abe supporters have dried up and blown away (not all but most...some are benefiting at the expense of the majority of their countrymen).

0 ( +0 / -0 )

Japan is a tricky one, because as some posters have pointed out they save like there is no tommorow. There is money in the bank. Some appear to live in poverty, while acutally they are just being prudent. Compare to the U.S. where many live well, but who are actually in debt, but that spending does wonders for the economy. The trick is to get the japanese to spend, but there lies the problem; their spendings can be wiped out in one day due to the ridiculously high prices of goods and services like cars, fuel, shaken/hoken/taxes, eating out education travel to the inaka, etc. So they save their bonues and live in squalor, buying crap at the monoply chain stores and take zero risk like loans, career change or life abroad. Once a year maybe a trip to a discount ryokan or onsen. many will be strapped to a lifetime commitment to a loan for a mansion 3LDK in some ugly city. Thats about as good as it gets.

TPP could offer these hoarders a better lifestyle and choices; but the riches shall not be taken from the top heavy bureacrats, and the cycle continues. major quality of life changes are unthinkable; like more movement out of Tokyo into the desolate but beautiful countryside, but the money and connections are still in Tokyo. So we see allot of roads being torn up and redone, instead of development projects in the inaka to move the masses out of Tokyo.

I think allot of Japans problems are of its own making, but theyve gotten so used to it, I think they actually like it.

-1 ( +1 / -2 )

Governments collect tax information electronically. They are not going to forget data on weekly or monthly wages, or survey them to get an estimate. They have the exact information. Yet somehow they need to collect surveys of employment info, and release that info after tweaking it.

This is about unemployment figures, I do not understand where you are coming from about tax data being linked to unemployment figures.

They gather data from Hello Work and the number of people collecting unemployment, however it does not include the number of people who's benefits (unemployment benefits here are VERY limited) have run out and are neither employed nor looking for work either.

It's unreal to think that with a down-turning economy that unemployment numbers would go down as well.

-2 ( +1 / -3 )

That poor reading has prompted Tokyo to consider a special stimulus package to counter the downturn.**

That downturn spurred the Bank of Japan (BOJ) to sharply increase its already massive bond-buying program—a cornerstone of Abenomics—effectively printing money to boost lending.

As you know that BOJ is no longer independent since 3 gangs (Abe, Aso, Amari) elected Kuroda as a head of BOJ. What they are doing is eventually breaking up Japan. A bunch of Japanese politicians are acting like car salesmen to run this country. Pathetic! The fact is Japanese consumers are poorer compared to 15 years ago. Sell yen investment and buy $$ investment for protection.

0 ( +1 / -1 )

Japan on Friday published a string of mostly weak data, the first major figures since news that world’s number three economy had slipped back into recession.

The figures on Friday showed that core inflation, which excludes volatile fresh food prices, fell 0.1% in October, marking the third consecutive monthly decline.

Meanwhile, household spending for the month fell 2.4%, underscoring concerns that consumers remain cautious.

Ouch. So flooding the economy with trillions of yen has neither spurred the intended inflation, nor increased domestic consumption. But, don't worry, Alex, Jeff, and Guy will have lots of great theory to quote us "economic illiterates" about how this is perfectly OK and no cause at all for concern.

-2 ( +2 / -4 )

Actually, kickboard is not far off. According to this site, the average family has 17,390,000 yen (not including real estate) :

http://www.arigatou365.com/archives/668

4 ( +4 / -0 )

bicult: Most that own real estate owe a lot of money on it.

-2 ( +1 / -3 )

Latest.

0 ( +1 / -1 )

Wait for the kicker. So far, the fallen oil price has masked the reality of the situation. As long as the oil prices remain low, the true weakness will remain masked. But, the masquerade won't go on forever. Meanwhile, if possible, buy gold while the prices are artificially suppressed. Or Silver.

-2 ( +0 / -2 )

2 ( +2 / -0 )

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