I should have been an economist...

Good morning everyone,

I hope you enjoy the nice weather today because we're looking at rain Sunday and Monday as we feel the effects from Typhoon 18. Make sure you keep an eye on it, I've heard it's the biggest one so far this year. After the typhoon passes, we'll see sunny weather return on Tuesday and should last through the week.

Have you looked at the yen recently? It's now at its lowest level in over 5 years and the slide doesn't look like it is slowing down (meaning it's going to get weaker before it gets stronger).

Of course PM Abe and his cronies will tell you that all is good because the 'tankan' says so. The 'tankan' is the short-term economic outlook in Japan-it used to be useful, but now it's basically useless, because it only goes by the business confidence of Japan's largest manufacturers. Well, of course they are doing well, a weak yen helps them.

However, the only way a weak yen helps all of Japan is if the big companies like Toyota, Panasonic and Mitsubishi pass on their profits to their workers and invest back in their companies (by upgrading things and buying new stuff). If they spread that money around a bit, we'd all be doing better. Instead, they are hoarding their profits and we (households) are carrying a heavier burden as the cost of imported goods continues to rise...did you know that the price of coffee is expected to rise around 25% next year!?

And now...only now is the government starting to take notice...not to toot my own horn, but I predicted this months ago!

So, consumer confidence is very low because the weak yen is making everything more expensive, but people's income isn't rising and it is starting to drag the economy down. Sales at supermarkets continue to fall and retailers like Fast Retailing (Uniqlo) and Aeon have seen their stocks drop around 10% because of low sales.

And the government has to react quickly to either boost the yen or improve consumer confidence, because PM Abe still hopes to increase the sales tax again next year...

If you ask me, and nobody ever does (Ha ha!)...I think it's only a 50-50 chance that the sales tax will go up next year. And a note to PM Abe-->if you're looking for an economic advisor that will tell you the truth rather than just being a "Yes-man", give me a call! But to warn you ahead of time, I'm not cheap! Ha ha!

Have a great day!

PS Sorry today's blog is so boring...but it's an important issue in Japan, so you should be able to talk about it in English! :)

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