The last issue of Rick's TOE including A Look back on Our Hits and Misses - Twenty Years of TOE, No Easy Reform Options for Japan, Scandal surrounding ultra-nationalist school - Abe’s Takakorobi?, 20 Years of Reform Efforts - Deeper Currents, Mireya Solis - Will Trump Hit Japan on Trade? and Small Talk.
Richard Katz's the Oriental Economist April 2016 issue includes reports Playing Trade Poker with Trump, Will a ‘double-election’ follow this summer - Second Tax Delay, Sad Shunto, Fiscal Straits Pit Elderly Against Children- Daycare Dilemma, and Pharaonic Construction Program - Call of the Crane.
Key points of this TOE Alert include: - Real wages per worker fell 0.9% in 2015, marking the fourth decline in a row; - One of the most disappointing omens for the future in the December report was the 0.8% fall in nominal bonuses, a harbinger for a disappointing shunto negotiations on overall wages; - Some officials and economists keep blaming the data, rather than look at the reality
Key points for Richard Katz's TOE Alert include: - Stock prices fell 5% on Tuesday and another 2.4% Wednesday morning to the lowest level since Kuroda’s “monetary bazooka” of October 2014; - The yen stands at ¥114.6/$, the strongest level since October 2014; - Yields on JGBs out to ten-year maturity are now in negative territory, for the first time; - Banks, pension funds, insurers all invest heavily in JGBs; - Banks have already made big cuts in the rates they pay depositors, but are not expected to go into negative territory for households or SMEs; - All this means a squeeze on earnings at banks, insurers and pension funds
Richard Katz's February 2016 issue of the Oriental Economist
Richard Katz's December issue of the Oriental Economist includes reports of Getting to 2% Real Growth Productivity Revolution, How Much Productivity Growth is Needed? Talk with MOF’s Top Official, Japan's Software Industry - What Went Wrong? Taking the Lead on Climate Change - New Energy Model for PRC, Development Aids Climate Goals, and Cheap Yen, Lots of Buying - Tourism Explodes.
One way to boost labor productivity, and thus potential growth, is to give each worker more tools, and this Japan has done. Over the long haul, however, it is ever more important to give workers “smarter” tools, e.g. moving from animal-pulled plows to tractors, from the stand-alone PC to the Internet. And it is important for companies to use those smarter tools up to their full potential. On this front, as we will detail today, Japan falls short.
We pointed out in our Nov. 16 Alert that Japan’s GDP has grown at a mere 0.6% annual pace in the nearly four years since early 2012,but our gut feeling is that the BOJ’s figure is too pessimistic, and the purpose of today’s Alert is to explore that question.
In our Alert of Nov. 18, we began looking at whether Japan’s potential growth is really as low as the 0.5% rate asserted by the Bank of Japan (BOJ)? Our gut feeling is that the BOJ is too pessimistic and that potential growth is more likely around 0.8%-0.9%, more or less the same as for the last quarter-century.