Very interesting post. In particular the last graph is very telling. However, I noticed data from between 2012 and 2021 was omitted. I imagine there was some weird stuff going on with the Great Recession, etc. but would be interesting to see.
I agree, Japan is in a pickle because it has essential become subservient to the US economically and therefore can't fully take on economic headwinds when they arise as they can't control US economic decisions. Do you think it will ever be possible for Japan to have more control of their economic future? What would have to occur?
The period between 2012 and 2021 was the era when Japan transitioned from the higher trend line to the lower one, partly as a result of Abenomics' deliberate effort to cheapen the yen.
Thank you for another extraordinarily clear explanation of the factors -- both short and long term -- behind the current Yen/USD exchange rate.
While there is probably little that Japan can do to increase its dependence on foreign food supplies, it seems that such an approach might help in the long run.
In any case, continuing to invest in U.S. stocks and other U.S.-based financial products certainly seems like the safest bet for the foreseeable future.
I disagree with you about greater "food self-sufficiency." Decades of futile efforts to achieve this goal leave Japanese people paying a larger share of their budget for food than people in other rich countries.
Japanese households are spending an increasing share of their income on food as prices continue to rise, pushing the country's Engel's coefficient to the highest level among key Group of Seven economies. The coefficient, which measures the percentage of household expenditures devoted to food, is commonly used to gauge a country's standard of living, with higher figures typically indicating lower economic well-being. Japan's Engel's coefficient reached 26% in 2022, It hit 28.7% in the third quarter of this year.
Thanks for your quick response and dose of reality. This is disappointing. While I've lived in Japan long enough to know that change comes incrementally in the absence of a real crisis, perhaps something will happen to jolt Japan into realigning its priorities. I won't, however, be holding my breath.
Very interesting post. In particular the last graph is very telling. However, I noticed data from between 2012 and 2021 was omitted. I imagine there was some weird stuff going on with the Great Recession, etc. but would be interesting to see.
I agree, Japan is in a pickle because it has essential become subservient to the US economically and therefore can't fully take on economic headwinds when they arise as they can't control US economic decisions. Do you think it will ever be possible for Japan to have more control of their economic future? What would have to occur?
The period between 2012 and 2021 was the era when Japan transitioned from the higher trend line to the lower one, partly as a result of Abenomics' deliberate effort to cheapen the yen.
Thank you for another extraordinarily clear explanation of the factors -- both short and long term -- behind the current Yen/USD exchange rate.
While there is probably little that Japan can do to increase its dependence on foreign food supplies, it seems that such an approach might help in the long run.
In any case, continuing to invest in U.S. stocks and other U.S.-based financial products certainly seems like the safest bet for the foreseeable future.
I disagree with you about greater "food self-sufficiency." Decades of futile efforts to achieve this goal leave Japanese people paying a larger share of their budget for food than people in other rich countries.
I'm a bit surprised by this statement as I find the grocery prices pretty comparable to the other places I've visited
Nikkei had a recent story on this at https://asia.nikkei.com/Spotlight/Datawatch/Meals-take-a-big-bite-out-of-Japanese-household-budgets
Japanese households are spending an increasing share of their income on food as prices continue to rise, pushing the country's Engel's coefficient to the highest level among key Group of Seven economies. The coefficient, which measures the percentage of household expenditures devoted to food, is commonly used to gauge a country's standard of living, with higher figures typically indicating lower economic well-being. Japan's Engel's coefficient reached 26% in 2022, It hit 28.7% in the third quarter of this year.
Thanks for your quick response and dose of reality. This is disappointing. While I've lived in Japan long enough to know that change comes incrementally in the absence of a real crisis, perhaps something will happen to jolt Japan into realigning its priorities. I won't, however, be holding my breath.
That's a Gandhian tactic: I'm going to hold my breath until you do the right thing.