Asia Minute: Japan’s Economy Showing Strength

Dec 18, 2017

Ginza District, Tokyo
Credit Wikimedia Commons

The economy of Hawai‘i’s top international tourist market continues to show strength. Business confidence in Japan is the latest figure to reach its highest level in more than a decade. HPR’s Bill Dorman has more in today’s Asia Minute.

Big businesses in Japan are feeling pretty confident these days.

In fact, according to the Bank of Japan’s quarterly survey of business confidence, it’s been eleven years since the country’s major manufacturers felt this positive about conditions. Exports are strong, corporate profitability is showing resilience.

Last month, the Nikkei stock index hit a 21 year high.

It’s retreated a bit since then, but at Friday’s close it was still up 15 percent for this year.

Earlier this month, revised figures showed the economy grew at an annualized rate of 2.5 percent in the third quarter. That means Japan has strung together seven consecutive positive quarters – the country’s longest run of economic growth since 1994.

Even so, there are some cautionary aspects.

Similar to other places in the world where businesses are doing well, there is a hesitation about raising wages—despite a continued tightness in the labor market. And large companies are not quite so confident about future conditions.

On the policy front, in a move familiar to the American public, Prime Minister Shinzo Abe wants to cut corporate taxes.

But there’s a big difference from the U.S. tax plan, the Japanese corporate tax cuts would only apply to companies which increase their spending on items such as boosting their payments to employees.