More than 3,000 companies went bankrupt...
Recently, Japan's economy experienced a shock decline in the third quarter, returning to negative growth. At the same time, Japan is also facing a trade deficit in October that hit a 43-year high in the same period, and the intensification of Japanese corporate bankruptcy, making Japan's recovery from the epidemic more fragile.
Japan's economy "upset" to return to negative growth
Recently, the Cabinet Office of Japan released data that the real gross domestic product (GDP) in the third quarter of this year fell by 0.3% from the previous quarter, and the annual rate of decline was 1.2%. This is the first time the Japanese economy has declined since the third quarter of last year.
At the same time, the initial value of the October trade statistics released by the Ministry of Finance of Japan showed that the trade balance of exports minus imports was a deficit of 2.1623 trillion yen (about 110 billion yuan). This is the 15th consecutive month of deficits, and the deficit has hit a new high for the same period since 1979 when there is comparable data.
The reason for the contraction, the Japanese government attributed it to a sharp increase in imports of 5.2%, while exports increased by only 1.9%, failed to offset the negative growth. The biggest factor is rising energy import costs, mainly oil and coal.
Meanwhile, Japan's domestic consumption rose 0.3%, also not enough to offset the downside and still below the previous quarter's 1.2% rise.
Zhang Jifeng, director of the Japanese Economic Research Office of the Japanese Institute of the Chinese Academy of Social Sciences, said that this unexpectedly shrinking GDP data reflects that the storm of yen depreciation has not been significantly eased, and a series of negative effects caused by it are emerging. Meanwhile, Japan's economic recovery has been set back by concerns that a weaker yen will push up energy costs and inflation.
A plunge in the yen, for example, amplified the energy-hungry nation's already soaring import bill, dragging down net trade.
After the yen fell more than 20 percent against the dollar this year, Japanese policymakers intervened in the currency market at the end of September, stepping into the market to support the yen for the first time in more than 20 years. The Japanese government continued to intervene in foreign exchange markets in October, bringing its intervention spending to billion.
Japan's inflation hits 40-year high
Last Friday, the Japanese Ministry of Internal Affairs released data that the consumer price index (CPI) hit 3.7% in October, the previous value was 3%, the highest level since February 1982, and the fastest growth rate in 40 years.
Currently, Japan's price growth has exceeded the Bank of Japan's 2% target for seven consecutive months.
Data suggest that Japanese companies may be moving away from a deflationary mindset as they gradually raise prices on everything from fuel to food while bearing the brunt of cost-push inflation.
Still, the inflation figures were not enough to convince Bank of Japan Governor Haruhiko Kuroda to change monetary policy.
Haruhiko Kuroda has always believed that the current cost-push inflation is temporary, and the central bank still needs to maintain an ultra-loose policy to support Japan's economic recovery.
The BOJ now expects price growth to fall below 2 percent starting in April of the next fiscal year as the impact of soaring energy and raw material prices fades. The Japanese fiscal year starts in April and ends in March of the following year.
Depreciation of the yen triggers a wave of "high price bankruptcy" of Japanese companies
Small and medium-sized enterprises in Japan are under unprecedented pressure due to rising prices.
According to the statistical results released by the Bank of Japan in November, due to the continuous soaring prices of imported goods and the sharp depreciation of the yen, the Japanese corporate price index has risen year-on-year for 20 consecutive months..
According to the report, the prices of electricity, piped gas and tap water contributed the most to the rise in corporate prices that month, up 43.2% year-on-year. In addition, mineral and steel prices rose 27.5% and 22.4% year-on-year, respectively.
At the same time, Japan's Tokyo Shoko Research (Tokyo Shoko Research) recently announced that the number of bankrupt companies (with debts exceeding 10 million yen) in Japan from April to September 2022 will be 3,141, the second time in two years. over the same period last year. According to analysis, factors such as the sharp rise in fuel prices have increased the burden on enterprises, which eventually led to a substantial increase in bankrupt enterprises.
It is reported that about 70% of the companies said that the reason for bankruptcy was due to "poor sales performance", and the number of bankruptcies due to insufficient working capital has also increased.
The relevant person in charge of the Tokyo Shoko Research Company said: "Because it is difficult to absorb part of the increase in the purchase price of raw materials, many companies cannot continue to operate and there are more and more bankruptcy cases."
In addition, according to data from the Japanese market research company Imperial Data Bank, in October this year, the number of bankrupt companies reached 594, a year-on-year increase of 16%, achieving year-on-year growth for six consecutive months. As of now, the number of bankrupt companies in 2022 is the largest in five years.
Japan's government intervenes in currency markets for first time in 24 years to stem yen depreciation
On September 22, due to the sharp fluctuations in the exchange rate of the yen against the US dollar, the Ministry of Finance of Japan announced on the 22nd that it would intervene in the foreign exchange market to prevent further depreciation of the yen. This is the first time the Japanese government has intervened in the foreign exchange market since June 1998.
The US Federal Reserve announced on the 21st that it would raise interest rates by another 75 basis points, and hinted that the rate hike may continue until next year. Affected by this, the exchange rate of the yen against the US dollar in the Tokyo foreign exchange market weakened significantly on the 22nd.
On the afternoon of the 22nd, the Bank of Japan held a monetary policy meeting, announcing that it would continue to adhere to the current ultra-loose monetary policy and keep interest rates unchanged. Bank of Japan Governor Haruhiko Kuroda said massive monetary easing was necessary to support Japan's economic recovery from the slump caused by the new crown epidemic. After the news was announced, the exchange rate of the yen against the US dollar fell further, approaching the 146 to 1 mark in the intraday session, a record low in 24 years.
In order to prevent the yen from continuing to fall, the Ministry of Finance intervened in the exchange rate by buying yen and selling dollars later in the day, and then the yen-dollar exchange rate once rebounded to 140.78 to 1. As of the close of trading in Tokyo's foreign exchange market, the yen was trading at about 142.2 to the dollar.
Sayuri Ito, a researcher at Nissen Institute of Basic Research, said that the Bank of Japan's adherence to an ultra-loose monetary policy has become the focus of the market, putting the yen under greater downward pressure. It remains to be seen how effective the Japanese government's intervention in the exchange rate will be.
Just now, blood tests for residents in this area of Japan have been launched! "Permanent chemicals" detected in water?
According to news from Tokyo Shimbun on the 24th local time, the Japanese citizen group "Association for the Investigation of Organic Fluoride (PFAS) Pollution in the Tama Area" held a press conference in Tachikawa City, Tokyo on the 23rd and stated that due to the wells used as tap water sources in the Tama area of Tokyo Harmful organic fluorides - per- and polyfluoroalkyl substances (PFAS) - have been detected in the water, and blood tests for residents have been initiated.
Previously, PFAS exceeded the standard in tap water sources and discharged water around the US military bases in Kanagawa and Okinawa. According to the group, although there is a view that the detection of PFAS in the Tama area is related to the Yokota base of the US military, the causal relationship is still unclear considering factors such as the detection location being far from the base. Therefore, they believe that to lock the source of pollution, blood tests are essential.
Per- and polyfluoroalkyl substances (PFAS) are an umbrella term for thousands of chemicals, some of which have been linked to health problems like kidney cancer, testicular cancer, and liver damage.Perfluorinated and polyfluorinated alkyl substances (PFAS) are used in products such as military firefighting foam, so they can be found near military bases and contaminate surrounding water resources.It accumulates in the human body and the environment and cannot be broken down, so it is called a "permanent chemical".According to reports, the US military's foam fire extinguishing agent contains organic fluoride (PFAS).