GEM note on Japan

Cross-post from Alpha.Sources Many clouds surround the coming decision by the BOJ to raise rates to 0.75% or whether to stay put. Today's rather dim data on domestic consumption further adds to the issues facing the BOJ at the August meeting. However, there also seems to be mounting evidence that what seemed to represent a sustainable recovery based on domestic demand at the end of 2006

Blogging The Japanese Elections

Well, since it is a very hot Sunday here in Barcelona, I am going to try and keep cool by live-blogging the Japanese elections. JEW's in-house political analyst Manuel Alvarez of Election Resources on the Internet will also be updating his Global Economy Matters Post as events unfold.Apart from all the heat - and as Claus indicates in his last post here - these elections come at an especially

Japan Goes to the Polls

Japanese voters go to the polls this Sunday to decide the future composition of the upper house of the parliament. As you will read in the analyses this election is not of major importance regarding the government of Japan (see more of the political system at Manuel Alvarez' Electionressources) but the election is still an important test for the ruling party LDP which is set alongside its partner

Why Japanese consumers are feeling even worse off than US consumers

I just discovered Japan Economy News & Blog, mentioned by Edward in a previous post, which has a recent post concerning "Increased tax burdens, consumer pessimism, excessively low interest rates, and the BOJ’s June Standard of Living Survey." That is certainly a mouthful; the gist of the article is that "With many households nervous over future prospects, a potential rise in the consumption tax,

June Trade Surplus

Well, Japan's trade surplus powered ahead again in June, up 53.4% from June 2006, according to Bloomberg. Japan's trade surplus surged in June as a weaker yen and higher overseas demand for electronics and cars helped exports rise at the fastest pace in five months.The surplus expanded 53.4 percent to 1.23 trillion yen ($10.2 billion) from a year earlier, the Ministry of Finance said in Tokyo.

The Eternal Yen Waiting Game?

This is UBS' Jonathan Anderson writing on the Yen (hat tip; RGE's Economonitor) ... This is a well written piece which point to a number of important structural characteristics of the Japanese economy ... the question then becomes, why are we seeing these structural characteristics?Here is Jonathan ...(...)Every one of Japan’s neighbors is strengthening against the dollar ... what will it take to

A Bit of Both from the Domestic Economy

This small snippet is really a recognition of the fine job by Ken Worsley who maintains the Japan Economy and News blog. Between him and JEW you should be able to find top notch economic commentary and coverage on Japan. So what is in store this time? Well, as I have argued before regarding the much hailed August meeting at the BOJ much will depend on the outlook of domestic demand. In fact, I

Price Measurement in Japan

Cross-post from Alpha.SourcesIf you have been following my notes on Japan's economy you might have noticed that the measures of inflation represent something of a maze. Basically, I usually cite three measures of inflation in ny notes on Japan as can be seen from the graph below from one of my recenc posts ... Regarding the official data which comes out of the Japanese statistical office and

Economic consequences of July 16th earthquake

The AP is reporting that "Japanese automakers, including No. 1 Toyota Motor Corp., called production halts Wednesday at factories in Japan because of quake damage at a major parts supplier.The temporary closure of auto parts maker Riken Corp.'s plant at Kashiwazaki city, near the epicenter of Monday's magnitude 6.8 quake, has forced Toyota, Nissan Motor Co. Mitsubishi Motors Corp. and Fuji Heavy

Upping the Pressure on the BOJ

Well today's economic news continues to pile on the pressure over at the BoJ:Demand for services in Japan unexpectedly fell in May, suggesting waning consumer spending is slowing growth in the world's second-largest economy. The tertiary index, a gauge of money spent on phone calls, dining and shopping, dropped 0.1 percent after climbing a revised 1.6 percent in April, the Trade Ministry said

Summer Hike at the BOJ?

Cross-post from Alpha.Sources Things are suddenly getting interesting in Japan and at the BOJ with markets solidifying for a August hike on the one side and somewhat deteriorating economic fundamentals on the other. Yesterday, the BOJ chose to hold rates steady with a vote of 8 to 1 but by taking a quick sweep across market indicators they all indicate that an August hike is in the bag or

BoJ Rate Decision Vote

The fact that the BoJ vote on holding the interest rate were it is came in at 8-1 is causing a bit of a stir:"The 8-1 vote left an impression that BOJ board members were more cautious about a rate hike than previously thought, spurring short covering in bonds," said Takeo Okuhara, a bond strategist at Daiwa Institute of Research.Now back at the end of June Morgan Stanley's Takehiro Sato

Japan's energy dependency

A key quote from the Bloomberg article that Edward referenced in the previous post is the statement that "rising food and energy prices are eating into the cost of living." While the USA's dependence on foreign oil is frequently discussed in mainstream media, it is important to remember that Japan is even more dependent on foreign supplies of essentially all fuels; whether it be oil, natural gas

Consumer Confidence on the Slide

According to Bloomberg this morning:Japan's consumers were the most pessimistic in more than two years last month as higher taxes, falling wages and lost pension records chipped away at people's confidence in the economy. An index that measures confidence among households with two or more people dropped to 45 in June from 47.3 in May, the Cabinet Office said today in Tokyo. Sentiment was the

Machinery Orders and the Economy Watchers Index

Data coming out of Japan at the moment is really mixed at the moment. Really, as Claus Vistesen notes here, we are all busily holding our breath right now.The latest news on the machinery orders front seems, on the face of it, quite positive on the surface:Japan's machinery orders, a key indicator of corporate spending plans, rose at triple the pace economists predicted, reinforcing expectations

Savvy Housewives and Mum and Pop Investors

This time Bloomberg has a new angle on all this:Yen sales by Japanese mom and pop investors this week exceeded professional traders' bets against the currency on the Chicago Mercantile Exchange.Net short positions on the yen against the dollar, or wagers Japan's currency will fall, reached $1.1 billion among traders using borrowed funds on July 4, according to Tokyo Financial Exchange. Based on

Japan's Leading Index

Well, the latest reading on the leading index seems to be causing some controversy. Earlier this week the Tankan came in with an unexciting but basically positive reading.The Bank of Japan's closely watched Tankan survey of business confidence showed the large manufacturers' diffusion index, which subtracts pessimists from optimists, unchanged at +23. However, the index for medium and small