Take our user survey and make your voice heard.



'Abenomics' kicking average wage-earner in teeth


Japan is “an exporting country” – that has been said so many times by so many commentators that it seems like the truth, but in fact, notes Shukan Post (Feb 8), it is very much an importing country as well, a fact it says makes “Abenomics” “the salaryman’s hell.”

“Abenomics” is the catchphrase that has stuck to the package of economic policies pursued with such vigor by Prime Minister Shinzo Abe. It amounts to massive government spending of borrowed money. Some experts are horrified by Japan’s mounting debt and Abe’s single-minded reliance on an approach that jump-started the postwar economy but proved helpless to stem the decline that set in in the 1990s. Other exerts insist it is the only way to get the nation moving again.

Is what’s good for the major exporters necessarily good for the country as a whole? Shukan Post looks at the issue from the point of view of the average wage earner – who, it says, will face on a stagnant income soaring prices in everything from fast food to computer equipment, housing loans to soapland entertainment.

The reason, reduced to a single word, is imports. Japan exports cars and electronics but it imports food, clothing and, above all, energy. A corollary of Abenomics is a cheap yen – excellent for exporters, a nightmare for importers. Consider the pump price of gas – 145 yen per liter at 90 yen to the dollar, 156 yen per liter at 100 yen to the dollar. Figuring a 30-liter tank, that’s an extra 300 yen every time you fill up.

Fast-food meals are a company employee’s staple. Especially popular is gyudon – beef on rice served in a bowl, offered by typical chain outlets for under 300 yen. The beef is imported; so, of course, is the fuel that heats and lights the restaurant and powers its stoves. The same yen decline from 90 to 100 to the dollar, analysts calculate, will drive the price of a serving of gyudon up 20-30 yen.

That’s pocket change, though it adds up, but the potential impact of Abenomics on housing loans is big money, weighed against average salaries. Abenomics, with its targeted inflation of 2%, will drive up interest rates. An average salaryman homeowner is saddled with a 30 million yen home loan, repayable over 35 years. Rising interest rates will bloat monthly repayments and play havoc with the household budget. And how would it help the economy in the long run if it stifles spending even further?

Shukan Post’s introduction of soaplands at this point lightens the tone but not the substance of its argument. The erotic entertainment these establishments offer involves bathing. Bath water is heated by imported fuel. Moreover, if the yen sent home to families by foreign erotic entertainers goes less far than it used to, the women will leave, abandoning the field to Japanese women who typically charge more. In short, in Shukan Post’s view, Abenomics may produce fine macro-economic indicators, but not without kicking the average company wage-earner in the teeth every way he or she turns.

© Japan Today

©2024 GPlusMedia Inc.

Login to comment

Finally, a report that doesn't fall all over itself repeating the self congratulatory meme that "inflation is good." It's not. It sucks. However, those that benefit from inflation, huge behemoth exporting companies, are the ones that tell the government what to do. And as far as crony capitalism goes, Japan has always been a bit worse in that department.

Unfortunately, nationalism also seems to be on the rise, and one thing countries have ALWAYS done with economic times get tough is blame other countries.

This pretty much kills any hope of Japan joining the TPP.

The best things for politicians to do is to leave it to the economy to work itself out. But they can't just leave well enough alone. It's like they're trying their hardest to screw things up as fast as possible. (And when I say politicians, I mean them and their crony capitalist masters.)

5 ( +15 / -10 )

Shukan Post’s introduction of soaplands at this point lightens the tone but not the substance of its argument. The erotic entertainment these establishments offer involves bathing. Bath water is heated by imported fuel. Moreover, if the yen sent home to families by foreign erotic entertainers goes less far than it used to, the women will leave, abandoning the field to Japanese women who typically charge more.

Titillation I do believe it is called. The poor salaryman is just going to have to go home to Mommy for his bath now.

-1 ( +4 / -5 )

The article warns about "the pump price of gas" but a bigger issue is going to be finding a gas station after the end of the fiscal year in March. That's when businesses with tanks older than 40 years have to undergo renovation. It is questionable whether many gasoline stand owners are going to pay to overhaul their properties. Glad I don't drive.

7 ( +7 / -0 )

Great article about what we should soon be seeing in Japan. Another group that will be impacted directly by Abenomics are Apple fans. Apple usually adjusts its prices depending on an average exchange rate plus a safety margin. As of now, a 1$ app goes for 85 yen on the AppStore (1$->80 yen plus safety margin), a dollar/yen at 90+ now and according to this article going to 100 soon, a 1$ app will soon go for 105 yen. Apple will also have to adjust the prices of its gear. The iPad mini goes for 329$ in the U.S but only 28800 yen here. At at 100+ rate it should retail at over 33000 yen here. Of course one alternative would be for Japanese Apple fans to go for the high tech Sony/NEC smartphones and their advanced Japanese operating systems(oops, aren't they using US software??).

-6 ( +3 / -9 )

It's refreshing to hear the reality for what most people are or are going to experience in the near future. The majority of people who are going to suffer seem to have bought into this idea that 'Abenomics' is a good thing for Japan, but in reality only the big exporting companies and government will gain from it (and construction companies engaged in government works), while everyone else is going to pay through the nose. This is not going to be a good nation to be in within the next few years.

9 ( +14 / -5 )

Good timing with me looking to leave Japan...

5 ( +9 / -4 )

Yep, there will be no middle class in Japan. There will only be upper and lower classes, and the lower class will be giving the upper class 50-60% of their salaries to keep the upper class up!

5 ( +11 / -6 )

This is a minor inconvenience compared to the huge tax hike coming in 2015. From 40% to 45% at the national level. Disgusting!

2 ( +4 / -2 )

I note the spineless LDP-loving rightist are out in farce giving posters negatives because they have neither the brains or the guts to argue with them. The fact is that this article is right on the money. I expect the nation's honeymoon with ultra-rightist Abe will soon be over.

I also expect the lower yen will be temporary. As I pointed out before, the yen has been on a steady rise for the last 35 years, though it has had peaks and dips during those years. It is elementary economics that you cannot regulate currencies forever. The goes for forced inflation. The immediate effect will be that the long suffering Japanese working class will spend less (which is happening right now, as a number of JT articles have reported). The result will be supply exceeding demand and a drop in prices in the form of discounts.

The simple fact is that before Abe took office, Japan was not doing all that badly, considering we had a world-wide depression (excuse me, "recession") for the last five years. It is not like the booming 1980's (which could not have lasted) but Toyota and Nissan did have to bailed out and Mistui and Nomura did not suddenly go belly up one fine day. In essence, Abe is trying to fix things that are not broken (so far) and ignoring or giving like attention to things that are broken, like Fukushima.

A parting shot. It was in 1978 that the dollar dropped to the incredible level of ¥200. Did Japan collapse? in fact the best was yet to come in the 1980s when it dropped further. Around 1990 the dollar was ¥150. The bubble had popped by then, but not because of the yen. The only adverse thing I recall is that Miyata and Bridgestone stopped selling bicycles in the US. As I look at the present I see Toyota has overtaken GM as the international bestseller, Japanese camera companies are blossoming and Seiko are coming out with the best watches in the world in terms of quality, price and variety. The point is, that Japan has prospered in spite of (and in many ways because of) the high yen.

3 ( +8 / -5 )

Reading through the above comments, I was surprised to see only one "good" mark in the left-hand side. The rest were all "bad" marks. Upon digesting the comments given to this point, I see no reason for all the "bad" stuff. So ... are LDP lovers reading this site and going against everything that is anti-LDP?

Anyway ... the above article points out only some of the things we have to watch out for as Abe readjusts the economy to meet his goal of what is to come ... which is?? ... nobody knows ...

Just hope I still have some coins to jiggle around in my pockets when Abe's policy is fully set in place.

5 ( +7 / -2 )

This is a minor inconvenience compared to the huge tax hike coming in 2015. From 40% to 45% at the national level. Disgusting!

To pay 40% income tax at present, you have to have a taxable income of over 18 million yen. The proposed tax hike will kick in at taxable incomes in excess of 50 million. If you're earning that much, you'll hardly notice it. Not like the people at the bottom of the ladder who are already struggling and will struggle harder when the consumption tax goes up and the weak yen makes imports (=everything) more expensive. Not to mention the flat-rate 2.1% income tax increase that kicks in this year to finance the Tohoku recovery - the little people are paying proportionally more for that, too.

12 ( +12 / -0 )

@cleo - absolutely agree with your points. I cannot imagine companies paying employees more when their operating costs are increasing by 8 to 10%. We've been living on borrowed time & borrowed money for years but it looks like Abe is going to kick everyone - especially the average salaryman in this article - in the teeth in order to help his friends in the export business..

4 ( +5 / -1 )

Abenomics isn't going to work, sorry.

Japan's problem isn't price of their products. It's competitiveness of their products, or lack there of. This is something pride filled Japanese will never accept.

Sorry, but someone had to tell you the truth.

3 ( +10 / -7 )

Korean trade volume climbs 15% in January, on year to year basis, as account surplus soars despite concerns of high Korean Won and low Japanese Yen. The Yen effect will do nothing to reverse Japan's falling position, you will see in coming months.

From the Financial Times:

Japan’s problem is uncompetitive products

Mr Abe and the business community in Japan continue to think their main problem is an expensive yen, or more accurately an underpriced Korean won. That may have been true in the past but not today. Even if the yen was to fall significantly, the world’s consumers are not about to abandon Samsung gadgets for those of Sony or Toshiba. The problem is not an uncompetitive currency, it is uncompetitive products.

1 ( +8 / -7 )

The full article link on coming Japanese financial crisis and plunging living standards


-3 ( +4 / -7 )

.......prices in Japan are already super expensive

The massive 20-30 yen deflation of the YEN didn't help to make prices cheaper for the common man

Has anyone honestly noticed super cheap prices suddenly appear the past 4-5 years at the gas pump or at the grocery store?

I didn't see Uniqlo's prices suddenly drop by 20-30% because the YEN got stronger

I didn't see the 150 yen per liter gas price change to 120 yen per liter because the YEN got stronger

Im still spending the same amount of money per month on food and gas and utilities the past 4-5 years as I was during the early 2000's

So how is a currency getting inflated changing anything in Japan ? Its not

0 ( +3 / -3 )

Sounds to me like Abunomics, or dangerous economic policies.

0 ( +4 / -4 )

The problem with relying on exports is that the days of Japanese products being seen as superior and in almost every Western living room are gone. Walk into a home anywhere in the Western world these days and you'll see a big increase in Korean and Chinese electronics. Exports can't save Japan like they did after the Second World War.

-4 ( +1 / -5 )

Weird. Could of swore there were many posters shouting "Stop blaming the high yen!!" when many Japanese corporations were reporting losses citing their respective causes. Now, reading Nikkei, all I read are corporations increasing their operating profit forecast or some adjusting from losses to profits.

Good to see Chucky once again with his Korea and Samsung Mansei despite the fact that half of their stock holdings are owned by foreign entity. That, in of itself, isn't a primary concern but when you consider that Samsung along with other next three conglomerates' gross sales adds up to an astounding amount of HALF of Korea's GDP, one must ask what Chucky is bragging about.

5 ( +8 / -3 )

Current policies are basically austerity measures in disguise. The reality will start to kick in soon for most families.

-1 ( +1 / -2 )

The biggest flaw to Abenomics is that if it does work, which is iffy, prices will go up but wages will not. Result, middle class gets hammered and moves downward toward lower class status. That is what the Japanese people have voted for unfortunately. The US income disparity disease is going on full bore here in Japan, since Koizumi copied the bush economic policies.

1 ( +4 / -3 )


You know why, because korean and chinese products are generally a lot cheaper. Imagine buying a Doraemon doll from JP against a Doramon from PRC,.or a Sony Playstation from JP against a Sunny Playstation! And worse is, people buy it without looking at the labels, because it's more affordable....CHEAP TRICKS from cheap money!

JP is trying to go just in between to be more competitive in the market. Just the right level to reveal the truth in quality of products overshadowing huge price diferrences. Abe and company is not that stupid to sink the common people, the salaryman, deeper. They are the majority in JP public just to put that into account.

If I'd be Abe, I'll ignore evrything and let the results explain it to itself. To add to that, so that JP can save more trillions into her pocket, I'll stop ODA (support money to help the underdeveloped countries, what a crap) to PRC and some other self-proclaimed rich countries. The paradox that I cannot understand. And also stop helping ungateful countries build their infrastractures, sewages and etc where you will only get backstabbed after it has gone able to stand on it's own feet. Insane polices like these don't help the common people of JP. It's their money anyway, JP shouldn't spend it carelessly against them.

-4 ( +1 / -5 )

...ungrateful countries like South Korea.

-3 ( +2 / -5 )

The rich are rich because the poor are poor.

2 ( +3 / -1 )

"Abenomics" means endless borrowing and spending on wasteful and inefficient projects. It should be called "LDP fiscal incontinence" as it's exactly the same trick they always try.

Perpetual growth is impossible. Sooner or later a government must accept that future growth will be minimal and adjust (balance) their budgets to account for that. In Japan, the LDP are incapable of doing this. The result will be bankruptcy.

4 ( +5 / -1 )

...unrepentant countries like Japan.

-1 ( +5 / -6 )

Just headlines to get sales by the magazine. Only about 14% of Japan's economy is exports, 85% is domestically driven. The idea of Japan as an "export" country is about 20 years out of date. And like Shukan Post is some sort of authority on anything?

1 ( +2 / -1 )

I forgot to add that this effect is temporary. Most analysts say the cheap yen will be gone by spring, no matter what Abe does.

0 ( +1 / -1 )

"if the yen sent home to families by foreign erotic entertainers goes less far than it used to, the women will leave, abandoning the field to Japanese women, who typically charge more"

They won't leave unless the yen loses half its value.

0 ( +1 / -1 )

Adjusting or trying to adjust the yen for imports/exports is something every country does, not real big news. Remembering that I used to be able to do an exchange of dollars to yen for 130 - 140 yen for 1 dollar, not long ago and Japan was doing okay during these times. I think trying to adjust the yen for international trading is a reasonable effort to improve things.

1 ( +1 / -0 )

avigator Sounds to me like Abunomics, or dangerous economic policies.

umai :D

0 ( +1 / -1 )

The article says the average person,well do not be average. In this day and age you need to be ready to adapt and work hard at all times, you will do well out of it and Japan is one of those countries where you can be rewarded for hard work and thinking outside the box. Ir may take time, even years but anyone can do it, Blaming Abe or any politician is an excuse.

Some can do better than others by being born priviliged but anyone can do it even though sometimes it feels like you are banging your head against a wall. Your best option as a foreigner in Japan is to forget this English teaching lark unless you open up your own school. Start your own business which is very easy in Japan, hard work but anyone can do. There is so much potential to make money whether you import or export, so many gaps in the market. Just keep on top of your game, work hard and you will have financial security.

0 ( +1 / -1 )

Well considering Japan has been in times of deflation for such a long time, a little inflation is a good thing. Also we used to consider it normal for around 100 - 120 yen dollar exchange rate. I guess everyone got spoiled.

Anyway, what is good for Japanese companies is good for Japan's economy and Japanese as a whole.

Don't necessarily agree with the LDP spending more though. The money usually goes to their mates.

0 ( +0 / -0 )

Deflation? Yeah, I keep hearing that -- but I have never seen one single price actually DROP!

2 ( +2 / -0 )

0 Good| Bad SerranoFeb. 03, 2013 - 05:55PM JST

"if the yen sent home to families by foreign erotic entertainers goes less far than it used to, the women will leave, abandoning the field to Japanese women, who typically charge more"

They won't leave unless the yen loses half its value.

Not sure i agree that Japanese women charge more......

0 ( +0 / -0 )

chucky cheese, guess you missed today's article. By the way, your beloved LG is in the red while Panasonic's stocks hit the maximum single-day gain. Hitachi is doing quite well too.

1 ( +2 / -1 )

That’s pocket change, though it adds up, but the potential impact of Abenomics on housing loans is big money, weighed against average salaries. Abenomics, with its targeted inflation of 2%, will drive up interest rates

each time the Fed did QE rates rose in the US and fell when they stopped..

even the near zero rates in Japan didn't spur the economy, what do they expect with a 1 or 2% increase??

0 ( +0 / -0 )

I am not sympathetic. During the yen's ascent over the last 4 years, there was almost no change in the retail price of most imported goods. A new BMW cost just as much in 2012 as it did in 2007, despite a 35% increase in the value of the yen. In other countries, changes in currency values are soon reflected in the prices of imported and exported goods, but collusion among Japanese retailers keeps prices high, regardless of the exchange rate, and screws the typical Japanese consumer. The retailers say that a "buffer" is necessary because large fluctuations in retail prices "are bad for the economy". Such collusion is considered a crime in other developed nations, but in Japan, where bureaucracy and big-business run the country hand-in-hand, it is how things are done. This is why I do my shopping on the internet from overseas retailers, my strong yen goes much farther there than it does here in Japan.

1 ( +3 / -2 )

@Sangetsu - you make a valid point and it makes perfect sense but I think the example of a BMW is not a good one, because it is considered a luxury good/brand and thus will always command a high price no matter what the exchange rate is. The dealers can charge this price because people will pay it... and with a weakening yen, they can raise the price because they can make the argument that it costs more to import them!!!

0 ( +0 / -0 )

So, all i've read so far are negative comments about abenomics. How the hell did that man became a prime minister if he is leading the country is such a wrong way?

Does this mean Japan is gonna be like North koreans that turned into cannibals because they have nothing to eat anymore?

0 ( +1 / -1 )

If you want to understand Japans economic problems since the bubble you should read, "The holy grail of macroecomics - Lessons from Japans great recession, by Richard Koo. Koos view of Japans problems is now widely accepted by bureauceats and politicians in Japan, and makes clear that Japan`s post bubble malaise is not explainable by traditional economics, Japan suffered a balance sheet recession, and only massive government spending allowed Japan to stagnate as opposed to collapse. The good news is that the underlying problem is starting to resolve.

-1 ( +0 / -1 )

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