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☆ Japan faces labor shortages and demographic crisis as elderly population hits record high
▼ + stars: | 2024-09-18 | by ( Dylan Butts | Cnbc Brand Studio | ) www.cnbc.com time to read: +1 min

Japan commemorated its "Respect for the Aged Day" earlier this week, with the national holiday underscoring a somewhat problematic fact — the country has a record number of elderly citizens to celebrate. Government data released ahead of the event showed that Japan's population of people aged 65 and over had risen to an all-time high of 36.25 million. A survey from Teikoku Databank last month showed that 51% of companies across sectors in Japan feel there is a shortage of full-time employees. Meanwhile, 2023 saw the number of Japan's workers aged 65 and over rise for a 20th consecutive year to reach a record 9.14 million, Statistics Bureau data showed. Feldman warned that as these elderly workers begin to retire from the workforce, there won't be the same number of young workers stepping up to replace them.

Persons: Robert Feldman, Morgan, Databank, Feldman Organizations: Statistics Bureau, Ministry of Internal Affairs and Communications, Morgan Stanley, Securities Locations: Japan

☆ Japan's stock markets are on a tear. Will 'zombie’ firms threaten the bull run?
▼ + stars: | 2024-02-09 | by ( Lim Hui Jie | ) www.cnbc.com time to read: +6 min

What are zombie companies? Japan's "zombie" problem has been around for a long time, said William Pesek, author of the book "Japanization: What the World Can Learn from Japan's Lost Decades." Raising the borrowing cost will put these zombie companies at risk of bankruptcy and bailouts, which could have a broader impact on the economy if there are job losses. "But the aid program has led to an increase in the number of 'zombie' companies that would otherwise have been unable to continue operating," the report added. Japan's stock markets have also been testing new highs since 2023, and higher interest rates could halt the bull run.

Persons: Adam Pretty, William Pesek, we've, Pesek, CNBC's Martin Soong, Warren Buffett's, Warren Buffett, Kazuo Ueda, Ueda Organizations: Getty, Bank of Japan, Tide, Asia Times, Japan Times, CNBC, Nikkei Locations: TOKYO, JAPAN, Roppongi Hills, Tokyo, Japan, Asia

[1/6] A chef cooks tofu as he prepares a dish before the opening for dinner hour at Ukai, a traditional Japanese restaurant, in Tokyo, Japan, July 6, 2023. "There's no doubt rising wages and bonuses are among factors prodding customers to come dine with us despite the price hikes," said Ukai manager Yuka Hoshino. It is also drawing the attention of the Bank of Japan (BOJ), which is shifting away from its view the recent cost-driven inflation will prove temporary. "Japan is seeing early signs of progress in achieving inflation accompanied by higher wages," another source said, a view echoed by two more sources. The BOJ is changing its tone on the drivers of inflation and how they see progress made in sustainably hitting 2% inflation.

Persons: Kim Kyung, Hiroki Wakita, Yuka Hoshino, Kazuo Ueda, Teikoku Databank, Akihito Sato, Shohei Kanai, Ryozo Himino, Seisaku Kameda, Tetsushi Kajimoto, Sam Holmes Organizations: REUTERS, Reuters, Bank of Japan, Research, Workers, Thomson Locations: Tokyo, Japan, TOKYO, French, Ginza

However, there is uncertainty about how long households can weather price hikes and generate inflation driven more by demand, which holds the key to whether BOJ's 2% target can be achieved in a sustainable manner, analysts say. The Tokyo core consumer price index (CPI), which excludes volatile fresh food but includes fuel costs, rose 3.2% in June from a year earlier, accelerating from a 3.1% gain in May. While companies offered wage hikes unseen in three decades this year, inflation-adjusted real pay continues to fall in a sign of pain consumers are feeling from the wave of price hikes. BOJ Governor Kazuo Ueda has repeatedly said the BOJ will maintain ultra-loose policy until stronger wage growth keeps inflation sustainably around its 2% target. "The BOJ may revise up its inflation forecast but probably keep policy steady in July," said Takeshi Minami, chief economist at Norinchukin Research Institute.

Persons: Yoshiki Shinke, Teikoku Databank, Kazuo Ueda, Ryozo Himino, Takeshi Minami, Takahiko Wada, Leika, Satoshi Sugiyama, Kantaro, Sam Holmes Organizations: Bank of Japan, Dai, Research, Reuters, BOJ, Norinchukin Research, Thomson Locations: Tokyo, TOKYO

☆ Japan killed 17 million chickens amid an outbreak of bird flu. Now it's running out of space to bury them.
▼ + stars: | 2023-04-06 | by ( Huileng Tan | ) www.businessinsider.com time to read: +3 min

Japan culled over 17 million chickens this season amid its worst bird flu outbreak ever, per NHK. As a result, egg prices soared in Japan, prompting some restaurants to suspend sales of egg-based items. However, not all of them have enough capacity to incinerate so many carcasses, according to another NHK report in October. The mass culling of so many chickens over bird flu impacts food prices. It's not just Japan as there's an ongoing bird flu outbreak globally that's affecting the poultry industry — and in turn egg prices.

☆ Japan Inc strives to lure skilled workers as inflation, labour crunch bite
▼ + stars: | 2023-01-30 | by ( Tetsushi Kajimoto | ) www.reuters.com time to read: +7 min

[1/2] A worker assembles an air drill at the factory of manufacturer Katsui Kogyo in Higashiosaka, Japan June 23, 2022. About a quarter of Japanese firms have offered inflation allowances or plan to do so, said corporate credit research firm Teikoku Databank. read moreThe private sector expects the drive to help boost productivity, meshing with Prime Minister Fumio Kishida's "new capitalism" initiative on wealth distribution that put a top priority on wage hikes. "Bonuses or inflation allowances would have only a limited impact on easing the pain of cost-push inflation, as consumers tend to save one-off payouts rather than spend," added Kiuchi, now an executive economist at the Nomura Research Institute. Workers have high expectations from this year's labour talks, which they hope will counter cost-push inflation while tackling the tight labour market to help boost the economy.

☆ McDonald's Japan hikes prices for 3rd time in 10 months on surging costs
▼ + stars: | 2023-01-06 | by ( Rocky Swift | ) www.reuters.com time to read: +1 min

McDonald's Holding Company Japan Ltd (2702.T) said it would raise prices on about 80% of its menu from Jan. 16, citing currency fluctuations as well as surging costs for materials, labour, transportation, and energy. The hikes follow previous increases in March and September last year, as Japan grapples with inflation and a slide in the yen that has made imported ingredients more expensive. The price for a single cheeseburger will go up to 200 yen ($1.49) this month from 140 yen a year ago. The cost of the signature Big Mac hamburger will go up to 450 yen from 410 yen previously. Japanese consumers will see price increases on more than 4,000 food items from next month, researcher Teikoku Databank said on Thursday, following an even bigger wave of hikes last October.

☆ BOJ to keep ultra-low rates, hold fire until global outlook clearer
▼ + stars: | 2022-12-15 | by ( Leika Kihara | ) www.reuters.com time to read: +5 min

Markets are rife with speculation that the BOJ will adjust its policy when Kuroda's second, five-year term ends in April. CONTENT WITH STATUS QUOAmid uncertainty over the global outlook and pace of Japanese wage rises, the BOJ is content with maintaining the status quo for now, the sources said. The BOJ expects the inflation rate to slow below its target next year because cost pressure will dissipate. Any chance of a BOJ policy adjustment will disappear if the Fed fails to tame inflation without pushing the U.S. economy into deep recession, analysts say. "But the BOJ will probably find it hard to phase out stimulus if the global economy is in bad shape," he said.

From Tuesday, Japan will reinstate visa-free travel to dozens of countries, ending some of world's strictest border controls to slow the spread of COVID-19. Just over half a million visitors have come to Japan so far in 2022, compared with a record 31.8 million in 2019. GHOST TOWNNarita Airport, Japan's biggest international airport some 70 kilometres from Tokyo, remains eerily quiet, with about half of its 260 shops and restaurants shuttered. Whether overseas visitors wear face masks and abide by other common infection controls in Japan is another concern. "From the start of the pandemic until now, we've had just a few foreign guests," said Tokyo innkeeper Sawa.

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