Japan Economy Collapsing -- Yet The Worse is still to Come

Japan Economy Collapsing -- Yet The Worse is still to Come





Japan, the world’s third-largest economy, shrank at the fastest rate in five years at the end of 2019 as it was hit by a sales tax rise, a major typhoon, and weak global demand. Japan has suffered its worst quarter since 2014. Japanese GDP shrank by 1.6% in the final quarter of this year, the equivalent of a 6.3% annualized slump. This without counting the impact that the coronavirus will have on the Japanese economy. Economics fear that Japan, the world’s third-largest country, could fall into recession this year. As the coronavirus hits companies exposed to China. The coronavirus spreading across Asia and the world is very likely to hammer Japan and the yen. The coronavirus is already taking a toll on the number of Chinese tourists to Japan and manufacturing activity due to the economy’s close ties with China, prompting some economists to forecast a contraction lasting two quarters. The Japanese economy greatly benefits from the horde of tourists that usually come over from China, and the two nations have developed a very close trading relationship. In Japan, the authorities are growing increasingly concerned about a rising number of cases. Until now, the picture in Japan has largely focused on the cruise ship, the Diamond Princess, which is still more incidentally just down the coast in the port of Yokohama. Although the vast majority of passengers have now disembarked after one over two weeks in quarantine but separate to the 700 or so cases linked to that ship. The Japanese authorities now say there are around a hundred and fifty reported cases elsewhere in the country. They're dotted all over, and the concern really for the health authorities is that they're really struggling to try and work out how and where those people became infected. It is an increasing problem, a big headache for the Japanese authorities. Because in five months' time, Tokyo is due to host the 2020 Olympics. If this epidemic is not contained by the time of the Tokyo Olympic Games, the damage to the economy will be huge. Japan's government is refusing to test hundreds of people who got a severe fever and applied to be checked if they got the coronavirus! In the last month, they only checked no more than 1000 people, while South Korea Government, for example, checked over 40000 people! They are intentionally controlling the numbers for economic reasons! And they let temporary negative people who got off the cruise to take public transportation to return homes all over Japan. And of course some people turned out to have a fever and be positive with the coronavirus later. Now the virus is all over Japan, yet they are still controlling the numbers by not testing people who need to be checked and not taking positive solutions! The outbreak in Japan is now inevitable. There is no confidence in the government. There is a lack of goods in the stores. People are very worried and scared. Many parents are keeping their children at home. Most Japanese believe the government bungled the cruise ship situation completely. Many hospitals are refusing to treat people who want to be tested for the virus. The medical staff who worked on the cruise ship are being bullied by their bosses and coworkers rather than admired for their work like the medical staff in Wuhan. The government is focused on the Olympics more than anything and secondly on the economy. The only reason the number of infected seems low is because nobody is being tested. The criteria to get the test is very rigid, and it is only available at a few hospitals. Welcome back to The Atlantis Report. Please take some time to subscribe to my two back up channels. I do upload videos there, too, on a daily basis. You'll find the links in the description box. Thank You. Japan’s economy is facing the risk of a recession because the coronavirus outbreak is hurting tourism and production. Japan is on the verge of a technical recession. It is a situation generally defined by two consecutive quarters of falling production, but the eyes of the world are now focused on the country to understand if it can turn into a more profound crisis. The Financial Times, for example, wondered if there is anything the government and the Bank of Japan can do and if Premier Shinzo Abe will succeed in his ambition to revive the Japanese economy as his mandate ends. It is not only Germany, the European locomotive, that is entering a recession. The myth of Japan, whose economy is third in the world after the US and China, also creaks. Official data show a dizzying drop in GDP, which fell by 6.3% per year in the last quarter of 2019 (1.6% short-term), a much larger contraction than the 3.8% forecast by analysts, as well as the worst result since the first quarter of 2014. For Japan - the world's third-largest economy - it was the first quarter of contraction after three consecutive positive quarters. On the bench of the defendants responsible for the drop in GDP, the consumption of Japanese citizens who went down by 2.9%. The fault of the increase in the consumption tax passed from 8 to 10% and decided by the government of Abe ((already passed from 5 to 8% in 2014) to restore the state coffers and to meet the greater welfare expenses due to an ever older population. Last but not least, the damage caused by the two typhoons that hit the country between September and October and which caused a total of 69 deaths. The trade war between the USA and China also weighs heavily on the performance of the Japanese GDP, which certainly does not favor the free movement of goods and services. Theoretically, the increase in VAT would have been offset by other measures, given that Abe had made a maneuver with over 100 billion euros to be used to cut taxes. And now, with the arrival of the coronavirus, there is only one more reason to be pessimistic. Due to the epidemic, The Chinese tourists (who are the first in Japan) have drastically decreased, not to mention the fact that numerous Japanese companies, including Toyota, Honda, and Nissan, have suspended their production in Chinese factories. A closure is due not only due to fears of contagion but also, like the case of a Nissan plant in Fukuoka prefecture, to the delay in the arrival of some components from China. Still, Japan's economy is the third-largest in the world, after the US and China: there are numerous private companies - called keiretsu - and they are excellent in numerous sectors, from banks to cars, to microelectronics. The problem is that exports have also fallen exponentially. And despite the agreement between the US and China and Brexit, there are no clearings on the horizon. "Exports are likely to collapse again this spring," said Takeshi Minami, chief economist at the Norinchukin Research Institute, citing a recovery in global semiconductor demand. "Trade is unlikely to serve as the main driver of growth this year due to the economic slowdown in the United States and China," Minami added. In particular, exports to China, Japan's largest trading partner, grew by 0.8% in the year up to December. Driven by the demand for equipment for the production of chips, cars, and plastics. It was the first annual increase in 10 months. Shipments to the United States, the country's number two trading partner, fell by 14.9% year-on-year in December - the fifth consecutive month of decline - dragged down by cars, auto parts, and aircraft engines. Finally, exports to Asia, which represents more than half of Japan's total shipments, declined 3.6% in the year through December. For its part, the central bank (BoJ), last week at its first monetary policy meeting in 2020, decided to leave its monetary policy unchanged. The central institute led by Haruhiko Kuroda awaits the effects of the government's stimulus policy, while it instead revised its GDP estimates upwards. For the fiscal year 2019-2020, the economy is expected to expand to +0.8 % from + 0.6% in October. And for the 2020-2021 period, it is forecast at + 0.8% from the previous + 0.7%. According to those in charge of the Bank of Japan, solid domestic demand should help offset the weakness of exports and manufacturing activity, although uncertainties remain about trade relations between Washington and Beijing. As for the result of GDP, the Abe administration and the Bank of Japan expected a lower impact of the tax increase compared to the experience of 2014, when the economy recorded a decline of over 7%. In short, a backlash on consumption was expected but not of this magnitude. Also, because this time, the increase in taxes was more contained, food products were exempted, and the government adopted a series of countermeasures aimed at mitigating fluctuations in demand. But economists have said that some of the government's measures, such as discounts on spending through cashless transactions, have had limited impact as they have not attracted an older segment of the population unaccustomed to mobile payment platforms. The latest data show that private consumption fell by 11% year-on-year in the quarter, as households reduced purchases of cars, cosmetics, and household appliances. In 2014 the drop had been 18%. What will happen next with the coronavirus? "We will continue to pay attention to the effect of the virus on tourism and the economy in general," Economy Minister Yasutoshi Nishimura said in a statement. "Depending on the level of emergency, we will take the necessary measures flexibly and respond fully." Meanwhile, there are already many cancellations of the visits of hundreds of thousands of Chinese tourists to Japan at the beginning of the Japanese Olympic year. Thus affecting an important source of revenue. The longer the outbreak disrupts Japan's main trading partner's production and domestic demand, the more likely Japanese exporters will be affected. The Bank Of Japan has also signaled its concern about the virus. It is also likely to stress the need for further data to assess the underlying trend. Given the growing side effects of its massive easing schedule and the relative stability of the Japanese currency, economists believe further bank action is unlikely in the near future. The central bank has, however, already cut overnight interest rates to minus 0.1 percent and is, however, reluctant to do more for fear of negative side effects on the banking system. After the launch in December of a stimulus plan for the economy for 120 billion dollars, the economists are now considering an encroachment to combat the effects of the coronavirus. Effects not yet quantified but nonetheless certain, and which will be even more felt on an economy already in difficulty even before the virus hit. It seems pretty obvious that you are going to have severe economic repercussions when you lockdown and quarantine cities with millions of people. And not just in China but in every nation that depends on China. But have no fear. Governments will just steal more money and run up more debt to make the stock market investors happy. This is what you reap when one country controls so much of the economy of the world. No one can compete with China. Not even Japan. So a virus comes along with no cure insight, and it hits the country producing and exporting the most commodities of anyone at a price no one else can compete with. Even Japan cannot produce goods cheaper than China, and they are very good at the competition. The American corporations and businesses created the Chinese superpower, simply because they didn't want to pay American workers American wages. That's why China is a superpower now; plain and simple. We were stabbed in the back by our own businesses and corporations, and the cowards in Congress that allowed the free trade deals, both democrats and Republicans. While it may be bad news for Wall Street, that usually translates into good news for Main Street. Sure, the shelves may be a little bare, for perhaps even a prolonged period of time. We survived it before globalization, and I'm sure we can survive a pullback. In fact, it may even be for the better, as alternative supply lines can be developed. This was The Atlantis Report. Please Like. Share. Subscribe. And please take some time to subscribe to my two back up channels, I do upload videos there too on a daily basis. You'll find the links in the description box. Thank You.