Are Government Forecasts Too Optimistic?
The tendency for the government economic outlook to be rosier than those announced by the Bank of Japan and private forecasters has grown stronger since 2013, when Abenomics was launched.
In an article in the January/February 2022 issue of Japan Spotlight, Research Director Nobuo Iizuka compares the various projections over the past several years and notes that the trend is likely to continue for the outlook in 2022.
He points out, though, that CPI forecasts by the government are for all items, while the BOJ and private-sector projections exclude fresh foods.
Medical Attention Can Be Elusive for COVID Patients, Shibuya Tells Bloomberg
A dysfunctional healthcare system in Japan, with many hospitals refusing to admit COVID patients despite the availability of beds, is forcing those infected to stay at hotels that have been converted into makeshift health centers.
In other countries, “when you are tested positive for Covid-19, you get medical attention right away,” Research Director Kenji Shibuya told Bloomberg News. “In Japan, public health center workers are making medical decisions until patients are severely ill and taken to hospitals. It’s a political failure that the nation can’t prepare hospital beds for them.”
“Covid Patients in Japan Are Recovering in Robot-Staffed Hotels,” Bloomberg
Shibuya Says Border Controls to Prevent Omicron “Just Buy Time”
The Japan government has announced the closure of its borders to new foreign arrivals, and its own citizens must isolate on arrival from countries where the omicron variant has been found.
In an article published by Bloomberg News, Research Director Kenji Shibuya notes that “Border controls just buy us time,” adding that Japan “should do whatever it takes to prevent the spread of the variant.”
“Japan to Halt Entry by New Foreigners on Omicron Fears,” Bloomberg News
Another COVID Wave Likely to Hit Japan, Shibuya Says, One to Two Months behind Europe
Despite a very slow vaccine rollout, Japan has now managed to get a higher percentage of its population inoculated than almost “anywhere else on Earth.” In an article on the BBC News website, Research Director Kenji Shibuya notes that the early chaos may be one factor behind its current success.
“Early on, there was a real shortage of vaccine available. That led to a kind of scarcity mentality prevailing, especially among the elderly.” Younger people who had to wait for their shots, meanwhile, saw that hundreds of millions of people in other countries were being vaccinated without dramatic side effects, reassuring them the vaccines were safe.
With people returning to offices and going out again, though, the infection rate may begin rising in Japan, despite almost universal mask wearing and social distancing. “We are one to two months behind Europe,” Shibuya says. “Very soon, we will see another wave developing.”
“Japan: From Vaccine Hesitancy to Vaccine Success,” BBC News
Research Director Iizuka Points to Causes of Negative Inflation
In an article published in the November/December 2021 issue of Japan Spotlight, Research Director Nobuo Iizuka examines recently released values for Japan’s consumer price index indicating that the rate of inflation since the beginning of 2021—previously thought to have been positive—was actually negative.
The downward revision of the rate of inflation, based on figures released in August, was the result of increasingly severe price competition, Iizuka notes. The biggest contributors to the revision were the transportation & communication sector, where major mobile-phone carriers announced lower-priced plans in April 2021, and the culture and recreation sector, in which the use of web scraping technology has facilitated the identification of the lowest prices for airfare and hotel charges.
“Inflation Rate Turns Negative on Reference Year Revision,” Japan Spotlight
Japan’s Slow Start Lent Sense of Urgency to Vaccine Drive, Shibuya Tells Bloomberg
On November 14, Japan pushed ahead of Canada to claim the highest COVID-19 vaccination rate among the Group of Seven nations—a feat considered remarkable given the lack of any inoculation mandates and the public’s historically low level of vaccine confidence.
“The slow start and the shortage made people think that they had to get shots quickly,” Research Director Kenji Shibuya, an epidemiology expert, told Bloomberg.com. “Elderly people were mindful of the health risks and had a strong sense of urgency to get it. Their experience gave a sense of security and encouraged the rest of their families to get it too.”
“Japan Leads the G-7 in Covid Shots Without a Mandate in Sight,” Bloomberg
COVID Infections Appear to Follow Two-Month Cyclical Pattern, Kenji Shibuya Tells Washington Post
The Washington Post quoted Research Director Kenji Shibuya as saying that the recent decrease in COVID-19 cases in Japan suggests that the “virus may be moving in a cyclical pattern of a roughly two-month period of peaking and ebbing.”
The epidemiology expert pointed out that even without a full, draconian lockdown in Japan, people were very stringent “about wearing masks and social distancing.” Shibuya noted that the severity of the pandemic in each country may hinge on the “very complicated interactional role” of seasonal, human, and viral factors.
The decrease in Japan, he added, might be due to unknown characteristic about the virus, given that “social interactions never quite stopped” in Japan. “We need to look into the endemic phase of covid now,” he said.
“Japan and South Korea Never Did Full Lockdowns. It Left Lessons on How to Coexist with the Virus.” Washington Post
BOJ’s Kuroda Distorted Financial Market, Hayakawa Says
Haruhiko Kuroda became the longest-serving governor of the Bank of Japan in September. As the architect of a massive monetary-easing policy, the central bank governor has been lauded by many for rectifying an overvalued yen and attracting overseas investors.
But Senior Fellow Hideo Hayakawa points out that Kuroda “had no Plan B in case he failed to achieve the 2-percent [inflation] target.” As a result, the BOJ “ended up having to keep buying a tremendous amount of assets,” Hayakawa said. “The bank has distorted the market, which is a bigger worry.”
“BOJ’s Longest-Serving Governor: The Impact of ‘Different Dimension’ Monetary Policy,” NHK-World
Parties in a “Race for Redistribution without Funding,” Morinobu Says
With a lower house election scheduled for October 31, both the ruling and opposition parties are appealing to voters with their income redistribution and expansionary fiscal measures. The manifestos of both call for “a mix of policies for times of emergency (amid the coronavirus crisis) and for ordinary times,” Research Director Shigeki Morinobu, told Jiji Press.
“In ordinary times, the government should draw a path to eliminating anxiety about the future through redistribution funded with stable resources,” Morinobu said. “What's going on right now is a race for redistribution without funding.”
“Ruling and Opposition Blocs Appeal for Votes with Income Redistribution Plans,” Japan Times
General Election Timed to Coincide with “Honeymoon Period”: Kato
The decision by newly elected Prime Minister Fumio Kishida to hold the lower house election in October, instead of early or mid-November as had been speculated, is a means of striking while the iron is hot and to put the opposition on the back foot, said Research Director Sota Kato in the Straits Times.
With the improvement in the COVID-19 situation in Japan, “The thinking is possibly that Kishida can ride on the honeymoon period for a new administration and before the next COVID-19 wave hits. It is highly possible that the LDP can maintain its majority even if the opposition parties work together.”
“Fumio Kishida Sworn In as Japan’s 100th Prime Minister, to Hold General Election on Oct 31,” Straits Times