The world ‘s largest asset management company, Black Rock, warned in the half – “Japan is particularly vulnerable to the slowdown in the Chinese economy,” he said. “The Bank of Japan is responding, but the means to use it is limited.” Singapore’s largest bank, DBS, also advised that it should reduce its portion of investment in Japan, referring to the strength of the Japanese yen and sluggish exports. Last month, the US stock market fell on the back of the US Jeffrey Financial Group, saying “the Japanese yen appreciation and the upcoming tax hikes are a wrong mix”.
Abe Nomics, the biggest achievement of Japanese Prime Minister Shinzo Abe, is unimportant. Exports are sluggish due to the US-China trade war and the slowdown in China’s economy, and domestic demand is also staggering. If the abe-nomics are stranded in this way, there is a prospect that it will be a new variable in frozen Korea-Japan relations. This is because it is not easy to drag trade conflicts, which are burdensome for both Korea and Japan economies, for a long time in a situation where the economic situation is unstable.
◇ Japan’s economy is back in a deflationary swamp
The National Bureau of Statistics announced on Dec. 10 that the index fell 0.1 percent year-on-year to a two-and-a-half year low.
Particularly noteworthy is that final goods prices, which have the biggest impact on consumer prices, fell 1.1% YoY. In Japan, “the price of consumer goods that have just been pulled out of the market may turn into a downward trend again,” said Tani Shimizu, a researcher at Mizuho Research Institute.
In fact, in May, Japan’s CPI (CPI, 2015 = 100) annual growth rate was 0.8%. It continued to rise for 29 consecutive months, but it still falls short of the 2% target price target. On the contrary, it decreased by 0.1 percentage points.
In order to achieve the goal, there is a growing voices calling for a stronger card, but it is not easy for both inside and outside. The debt of the Japanese government has already exceeded 1100 trillion yen. Last year, the Japanese government’s debt-to-GDP ratio reached 230%, which is higher than that of Greece (180%) and Italy (130%).
The central bank’s monetary policy capacity is also bottoming out. The benchmark interest rate has already been minus 0.1% and the 10-year Treasury note interest rate is 0%. The Bank of Japan (BOJ) purchased 6 trillion yen a year of ETFs, which are linked to Japanese stock prices, as a way of monetary policy to “take money and raise the economy.” As a result, (KOSPI), which has a market capitalization of 4.9%. It is expected to become the largest shareholder of the Japanese stock market next year. That’s why the central bank is distorting the market.
◇ Abe-nomics broke a crutch … Domestic demand is also sluggish
Above all, the most pressing challenge facing the Japanese economy is the value of the yen. It’s because Abe-nomics is the strongest proponent. The most significant effect of the expansionary monetary policy and monetary easing policy was the rise in export competitiveness of companies due to the decline in yen value.
However, unlike the Obama administration in 2012, when the abe nomics began, US President Donald Trump is blatantly intervening in the market, shouting the dollar weakness. It is not easy for the yen to depreciate as before, as President Roh Trump’s check against the bullish dollar strengthens as the global uncertainty expands and the sentiment for safe currencies strengthens.
If exports are sluggish, the domestic market needs to back it up, but the current situation is far from over. The Nihon Keizai Shimbun reported 80 major retailers and restaurants that had closed their accounts by the end of the month. Sales in the second quarter of this year stood at 2.9 percent, the lowest level in two years.
Net profit also fell 1.1%. The wallet of Japanese tourists who have been driving the Japanese consumer market is also closing.
“The strength of the yen and the weakening of the yuan are affecting Chinese consumers,” said Abe Tooru Vicam, director of the company.
In October, the consumption tax rate will rise from 8% to 10%. The Japanese economy has suffered from economic shocks, such as slowing consumption, in the course of the double taxation. Although Abe’s government has strengthened support measures for low-income brackets to reduce the impact of the shocks, and is returning points raised to taxpayers, President Aitori Nitori of Nitori Holdings, a Japanese general furniture maker, said, “Consumers’ It is getting stronger. ”
When the Japanese economy wobbles, the Japanese government, which has been responding to hard-line changes by now, also turns out to be a turning point.
“It is showing that both Korea and Japan can not solve the problem,” said Professor Miyake Kunihiko Ritsumeikan, a former diplomat. “If there is no real damage, such as corporate and financial markets, It will be difficult. ”