Posted on 08/20/2024 8:07:16 PM PDT by anthropocene_x
If ever there were an economic example of the dog that caught the car and has no idea what to do now—it’s Japan, circa 2024. For 25 years now, a succession of leaders tried—and largely failed—to defeat deflation and produce sustained inflation.
As many Americans not feeling the economic boom in the globe’s biggest economy will tell you, inflation has a way of clouding all else. Here in Japan, it’s rising faster than wages.
In 1999, the BOJ became the first major central bank to slash rates to zero. Two years later, it pioneered quantitative easing. All that free money deadened the urgency for lawmakers to retool the economy. Corporate CEOs had little incentive to restructure and take risks.
This bull market in complacency now collides with a record stock surge. Inflation’s return means Tokyo got what it wanted. Question is, now what? Rising prices will only be acceptable to Japan’s masses if wages catch up to make households whole. There’s a Catch 22 here. Japan needs higher wages, but fattened paychecks will only exacerbate inflation risks unless coupled with productivity gains. Japanese productivity is among the lowest in the ranks of Organization for Economic Cooperation and Development members.
(Excerpt) Read more at forbes.com ...
Why can’t we have a stable currency or basket of stable currencies?
My wife is Japanese (since ‘94), and both the wife and daughters are ecstatic with the recent yen downturns — which I haven’t seen since the early 90s (and are far fletched of prior to that time).
While I understand the US treasury and Yen carry trade issues that is all Macroeconomics. Trust me - my wife and daughers have been ordering things recognizing the change in the Yen/Dollar exchange rate.
My extended family has seen no inflation in Japan - in fact I think it has been deflation hidden for years economically as most real estate has deflated in value (which one would expect - as a manufacturing guy stuff deteriorates over time)
So I think what we are seeing now is a potential capitulation against actual perceived value vs the dollar in Japan. Not saying either is right - just that the dollar is, IMHO, weaker than the world previously thought...and likely to continue the current trend based on my current experience.
Appreciate your insight
Stable compared to what? And by what mechanism?
it pioneered quantitative easing
What could go wrong?
No inflation in Japan ? You must be kidding ? Many of the goods we regularly purchase have gone up 20/25% since a year or so ago .
Yeah Japan is FULL of tourists. Not so much Koreans, but Chinese and Vietnamese. Some Europeans.
For the same reason that you can’t have a business run by a stable of people, who are each equal. Their competing interests would tear it apart eventually.
Hey struggle, what’s your data source for key countries visiting Japan.
Check this data from Japan’s tourism bureau.
https://www.tourism.jp/en/tourism-database/stats/inbound/
In June 2024, the biggest group of foreign tourists came to Japan from the following countries:
Korea, China, Taiwan, USA, Hong Kong...
Vietnam was much further down the list in June 2024.
Check out the link above for lots of statistics and a comprehensive graph showing all major countries for 2023 tourists.
Korea,
Inflation is normal - and if you expect pay to rise, then that fuels inflation.
Maybe sage workers should wisen up and ask for pay cuts.
Because bankers can’t make money on stable currency. They make money when the value moves around.
I’m not economist, but I don’t think just reduction of salaries can lead to a stable “non-inflation”.
It’s just what I saw this summer. TONS of Chinese tour groups with Viet tour groups second, and free/tour grouped Europeans (mostly Italian) coming in third. I saw a lot of Koreans in Osaka, but not so many in Kyoto or Kobe.
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