Good question! My view is that Japan Inc. faces an existential economic threat from Chinese having upgraded their industry - it's quite notable that the most recent period of extended Yen weakness coincides with China having overtaken Japan as the largest auto exporter in the world.
Interestingly China is now heading in that direction.
FDI into China from the US, Germany, Japan etc has collapsed to near zero. Multinationals are partly reinvesting retained profits, but probably pulling out dividends, interest etc...
FDI from China however, especially to non-G7 countries is exploding...
I think Japanese conglomerates have more power than we expected on resisting shifting policies.
Certainly a lot of power on keep wages flat
Good question! My view is that Japan Inc. faces an existential economic threat from Chinese having upgraded their industry - it's quite notable that the most recent period of extended Yen weakness coincides with China having overtaken Japan as the largest auto exporter in the world.
https://www.bbc.com/news/business-65643064
It's one thing to cede steel, textiles or shipping to China, but the auto industry is something else entirely.
Since Japan can't compete on its technical excellence alone anymore, it has to compete on price. This means.... Yen devaluation!
In other words, I don't expect the Yen to rally meaningfully until Toyota and co regain their technical edge. Solid state batteries, anyone?
Until then, enjoy Yen funded carry trades!
Not sure about... if Japan was suffering that much technologically I would expect much higher unemployment etc... and the beginning of savings unwind
Unemployment is low, but the Japanese household savings rate has been consistently falling and is far lower than East Asian peer countries.
I would argue the real difference with Japan is the net international investment position of its corporates. Consistently postiive
Interestingly China is now heading in that direction.
FDI into China from the US, Germany, Japan etc has collapsed to near zero. Multinationals are partly reinvesting retained profits, but probably pulling out dividends, interest etc...
FDI from China however, especially to non-G7 countries is exploding...
Yes - well on the way - I think China would love to displace Japan as funder to the world
Japan is a bug in search of a windshield
I think they need a new growth model. 30 years of failure must be new record
Never
Jgb market says otherwise
True, but it has been doing so for a while already and been wrong