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Main points of Japan's ¥108 tril emergency package

34 Comments
By Hiroshi HIYAMA

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and avoid job cuts.

I've alway been impressed with the reluctance in Japan for companies to shed staff, but I would add that I hope the special loans should be for companies that have stopped business not those that are open.

-1 ( +1 / -2 )

"...for businesses to bring manufacturing back to Japan,"

The fallout of this crisis will be a scaling back of globalization. Break out the Champagne.

0 ( +7 / -7 )

Osaka_DougToday 07:15 am JST

and avoid job cuts.

I've alway been impressed with the reluctance in Japan for companies to shed staff, but I would add that I hope the special loans should be for companies that have stopped business not those that are open.

No, apparently the Chief Cabinet Secretary Suga has stated that companies which close will receive no government support.

Royal Limousines, a Tokyo taxi company, has just fired 600 drivers.

The current family support plan is so complicated it's almost incomprehensible. On the Channel 5 Morning Show yesterday there was a presentation of the current plan followed by a ding-dong arguement between an Abe mouthpiece, journalist Shiro Tazaki, and regular commentator Toru Tamagawa. The plan is a shambles, an incoherent mess that left all the guests scratching their heads in disbelief. Tamagawa tore the Abe mouthpiece Tazaki, who was attempting to defend something he clearly didn't understand properly, to shreds. Tamagawa was furious, absolutely seething.

By all accounts there were people thronging Hello Work and government offices yesterday, desperate for information on how to claim. Of course, government office staff have received no explanation of how the current plan will work, which now puts the low-paid temp-staff right on the front line.

This has barely begun but it's on the verge of descending into chaos already....

18 ( +18 / -0 )

Channel 5 is the best. Watching now and the LDP sponsored mouth piece is getting shredded again. He looks pretty uncomfortable unable to explain the unexplainable.

3 ( +3 / -0 )

The suggestion that Chief Cabinet Secretary Suga implied that “companies which close will receive no government support”, is a misrepresentation…….

The governors held an online meeting and compiled proposals for state compensation for businesses.

But Chief Cabinet Secretary Yoshihide Suga, the top spokesman for the central government, said at a press conference it does not plan to introduce such a measure.

Yasutoshi Nishimura, economic and fiscal policy minister who oversees special measures to respond to the epidemic, held a videoconference call with the governors later in the day and asked them to refrain from asking businesses to close over the next two weeks, sources close to the matter said. Kyodo News

In fact, the Governors will, quite rightly be held directly responsible and culpable for the policies they enact in this pandemic.

If Governors insist that business close, the same Governors must present a detailed monetary, fiscal, and ultimately taxation proposal to compensate, To insist the state be accountable, in essence the treasury/exchequer/tax payer be held accountable. Is unacceptable.

The Governor calls it. that same Governor owns it.  Gov. Yuriko Koike, pay attention no more hiding under your desk.

1 ( +1 / -0 )

the main point is that ,all this money is fake. Stop working , ABE is printing!

-6 ( +1 / -7 )

Looks like the government is washing it's hands of any responsibility (again) and palming it off to local governors. Avoiding any responsibility that they are paid to take. Oh to be born into such a job.

2 ( +2 / -0 )

Sorry indigo, money is neither fake. printed, or launched out of a mythical helicopter.

The correct term, for the frankly irritating term, “helicopter money” is direct monetary financing. (Milton Friedman)

A theoretical proposal for either a one-off tax break or a cash handout to citizens or a “permanent” monetisation of a given element or proportion of a fiscal deficit.

This “printing press” supposedly plugged into the wall in PM Shinzō Abe office is probably a a personal beverage dispenser.

Simply, printing more money won’t and never will increase economic output. “Printing more money” only increases the amount of cash circulating in the economy.

The increase to the money supply through the act of printing, that consumers should be able to demand more goods, however there is a fundamental flaw to this logic, business productivity restictions dictates companies still have the same amount of goods, they will respond by putting up prices. Long term Inflation, will also in a crisis of this nature will enhance the risk of stagation.

There is no easy solution, or magic money tree to shake. The Bank of Japan will, or has already started to carry out an operation to buy substantive amount of government bonds to smother the risk of elevated cost to long-term yields, especially in the 10 to 25 year range.

0 ( +1 / -1 )

Has there been any official governmental definition of what constitutes a "low-Income" family?

3 ( +3 / -0 )

Some people who live below, on, or just above the poverty level and those who have lost their incomes all need immediate and quick financial support.

7 ( +7 / -0 )

Without doubt it is the most venerable in society that desperately needs Government assistance. Supported by a simplified claimant model i.e a same day response.

1 ( +1 / -0 )

Pretty sure international companies that have a Japan brand will get the money. Others as Aso said can eat ¥100 cup noodles. I know at least 3 people (Japanese) who have lost their jobs. Hello work so far have been of no help as they worked for black companies so no records, no help.

2 ( +2 / -0 )

They are making it ridiculously difficult to claim the money they dont even know how they are going to distribute it yet...

1 ( +1 / -0 )

Bringing back manufacturing

So companies that up and fled Japan seeking a cheaper labour force and lower labour and environmental standards, requiring tax payers pick up the bill for the suddenly unemployed, now get rewarded for bringing back their processing and manufacturing, again leaving the burden of the newly laid off workers for someone else to carry.

This is clearly another example of the Abe government's ongoing class warfare, using this virus shock to further enrich the wealthy.

3 ( +3 / -0 )

Never ending deflationary death spiral.

3 ( +3 / -0 )

LOL - something not right about this paragraph

Bringing back manufacturing ...Business will also be encouraged to diversify foreign sources of necessary supplies, particularly by investing heavily in various countries in Southeast Asia

4 ( +4 / -0 )

Low-income families:

"Middle" income families are getting hit just as hard as low income and are also in need of support. The assumption that middle income families are able to absorb the impact of being laid off/out of work as easily as "high" income families is wishful thinking at best. Japan has been using the term "working poor" for years. People who are middle class in name alone, working and making just enough to pay all the vast and myriad expenses that come with living here from month to month. These people who will be excluded from government support, because on paper they are middle class, will be facing all manner of hardships and possibly destitution.

1 ( +1 / -0 )

This emergency package is more or less a farce! Seems like the business sector and the rich will get the most benefits and the common man doesn’t get anything! The 300,000yen receivers will be less than 1% if the population as it’s just for showing that the Japanese Government is giving cash handouts like other countries!

1 ( +1 / -0 )

@indigo

the main point is that ,all this money is fake.

Free feel to give me your share of the assistance. I'm more than happy to have a wallet stuffed full of yen, no matter where I am in the world.

@itsonlyrockandroll

"Printing more money” only increases the amount of cash circulating in the economy.

"Only"? You forgot the part about how the process takes bonds and other assets out of the system, replacing them with the money credits. It worked pretty well in the US after the 2008 meltdown, supporting the longest economic expansion in history.

Long term Inflation, will also in a crisis of this nature will enhance the risk of stagation.

Yeah, all that inflation that we've been experiencing in Japan. Time to ditch the neo-classical economic theory.

1 ( +1 / -0 )

It doesn't seem like it's just "low income" which will be the threshold. What if a married couple has only one working? That's low income. But they are only going to provide assistance to those "affected" by the virus, such as laid off or such. Right?

0 ( +0 / -0 )

JeffLee, Thank you for pointing that out, I must admit and say I did not forget, honestly I am not fully aware, I have had to do some research. I need to fully gen up on the US finanical system.

What concerns is if the J Government was to instruct BOJ directly to facilitate the purchasing of bonds to pay off the national debt, direct mutualization of debt, the effect that would have on inflation. This increase in inflation would reduce the value of bonds.

0 ( +0 / -0 )

Many people across the board will need financial support. Poor people, people who have lost their employment or business. The people will the most dire needs should be at the front of the line.

1 ( +1 / -0 )

The bulk of the stimulus -- worth 80 trillion yen -- aims to protect jobs and save small and medium-sized businesses.

Stands to reason they'd want to spend most of the money on helping the LDP's support base. Happy days ahead for loyal koenkai members, I suspect.

0 ( +0 / -0 )

So companies that up and fled Japan seeking a cheaper labour force and lower labour and environmental standards, requiring tax payers pick up the bill for the suddenly unemployed, now get rewarded for bringing back their processing and manufacturing, again leaving the burden of the newly laid off workers for someone else to carry.

This is clearly another example of the Abe government's ongoing class warfare, using this virus shock to further enrich the wealthy.

The next part after "Bringing back manufacturing" is contradictory with "Business will also be encouraged to diversify foreign sources of necessary supplies, particularly by investing heavily in various countries in Southeast Asia".

The day, when Toyota and Japanese auto manufacturers offshore their factories to North America, was the end of Japanese manufacturing era. With the Plaza Accord, manufacturing in Japan increasingly becomes impossible. So bringing back any factory job to Japan is impossible at this point.

Abe administration sold the Japanese agricultural sector at the hands of the USA through a recent signatory trade deal with Trump. Since Koizumi, Abe pretty much allowed Americans, Europeans, Chinese and Arabs to freely invest and acquire Japanese firms/assets. Of course, his government bails the zombie companies in an effort to lure foreign investors. Nissans, Sony, Takeda Pharma and Nintendo are pretty much foreign owned at this point. They are just a few examples, as you have American activist investors targeting Softbank and other Keiretsus.

The better statement should be Shinzo Abe enriching the foreign investors at the peril of Japanese people.

0 ( +0 / -0 )

Those that qualify to receive the 300,000 yen if lucky will receive it earliest in June.

0 ( +0 / -0 )

It also aims to distribute 15 million masks to medical institutions in April and secure up to 50,000 hospital beds to treat severe infection cases in the near future.

Aims should be replaced with pledge.

15.3 billion yen from the supplementary budget was allocated in early February to boost mask production, the shortage only got worse.

50,000 beds In the near future.

Near future, with all the meetings, committees may well mean 5 years from now.

Presently, the number of beds nationwide is 1871, the 50,000beds is just to inflate the package amount. 50,000 ICU is just not realistic.

One should not forget that anticipated tax revenue of 26 trillion yen is also included in the package as tax waver to businesses. It is nothing but anticipated and shouldn't be included in the package.

The 6 trillion yen for households is calculated that 10 million households will qualify which is grossly inflated, the conditions to

qualify greatly refuces the number of households.

The package was drawn with the prime objective of making it look massive rather than for the purpose of relief.

0 ( +0 / -0 )

The government should pay everybody who has a 'my number' a sum to tide them over—lets say ¥300,000, then next year when people make their tax returns, if they had not lost income due to corvid-19, they can be made to pay it back. As the system stands at the moment it is too complicated and takes too long for people to get any money.

1 ( +1 / -0 )

What is ¥10000 going to do per child? Electricity bills for one month are ¥20000, what planet are you on abe? 1950s world?

0 ( +0 / -0 )

Electricity bills for one month are ¥20000

What are you doing? Eating it? We live in a large 6DK house and our max power bill is ¥10,000.

0 ( +0 / -0 )

@Zichi: You have no children and probably using three rooms max and the others shut down. Some people with large families with large clothes washing needs etc. can easily do ¥20,000 a month.

My average with two of us is ¥6700 a month.

I feel the whole money scheme as it is evolving is way to complicated for even fluent Japanese users to figure it out.

0 ( +0 / -0 )

TomToday

@Zichi: You have no children and probably using three rooms max and the others shut down. Some people with large families with large clothes washing needs etc. can easily do ¥20,000 a month.

We use all of our rooms on most days. Large family room. Computer room. Dining room. Student room. Large art studio. Bedroom. Laundry room. We do machine washes every day. We are at home 24/7

¥20,000 would be about 740 kWh/month which is much higher than the average family. The average is 450kWh/month. About ¥12,000.

0 ( +0 / -0 )

@Zichi, Do you use a large wood stove by chance? I used to do so in the states.

New wood burning stoves are excellent.

Do you dress with a lot of layers?

0 ( +0 / -0 )

OK - picking up on the following point:

Individuals in need will also be given access to interest-free emergency loans.

In the UK, the Banks were given instructions to provide similar loans to individuals running their own Businesses, but Banks being Banks, decided to add an extra Caveat - the individual taking out such a loan, had to provide Collateral in case of failure to repay... not such a sweet deal after all, especially as it meant that they could loose their own Homes in their attempts to save their small private businesses under that Scheme.

I hope the same doesn't happen here in Japan. But Politicians are Politicans, and Money is Money - Banks don't give out free Lunches.

0 ( +0 / -0 )

One thing, that may come out from this Pandemic, is a new "Risk Factors" in Market Economics - that of local market dependency upon other Countries. Specialist Companies such as "Barra" will undoubtedly be revising their existing scoring methodologies - as todate it's only been indicative.

Now, we have absolute clarity upon the Commercial dependencies between Countries when macro-level events occur - China may be priding itself of coming out of the Pandemic with a few Deaths in comparison to the rest of the World, but that doesnt help it at present... as they are not receiving Orders from overseas, and without Orders they don't need Workers to produce stuff that's not required...

With hope, Supply Chain Risk will become a key focus point in assessing a Companies Resilience. A company that sources 100% of its products from a single overseas source, goes out of business if that source has a problem. But what if they sourced 25% of what they needed locally .... ? Then the risk of that Company going bust is somewhat lessened - they become more resilient.

Car Makers soley sourcing Precious Earth Metals from China, are a good example of where they could find themselves without a source of that material simply because of a GeoPolitical spat between their Government and China's....

And a Classic case of this, closer to home, is here in Japan, nearly all the face-masks were produced overseas in China! Now we can't obtain any. Perhaps the Japanese Government will remedy that situation as the first post-pandemic thing they do (hopefully not by simply stock-piling).

I think the longer the cessation of inter-country trade goes on, the better ... it will bring the matter into all of our minds, and lead us to forcefully raise the matter with our local Politicians and Business Leaders who saw it right previously to offshore everything because it was simply cheaper without considering the consequences....

Mud in face time...

0 ( +0 / -0 )

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