Japan's domestic consumption strengthens.

Japanese Shoppers to Spend More, Credit Suisse Says 
By Masaki Kondo and Akiko Ikeda

April 16 (Bloomberg) -- Japanese service providers and other companies reliant on domestic demand will benefit from increasing consumption, Credit Suisse Group AG said.

An improving job market and a demographic shift in the workplace are likely to boost spending, Credit Suisse’s chief Japan economist Hiromichi Shirakawa, said in an interview yesterday. As the nation ages, there are more opportunities for young people, he said.

Complete article here.



Japan Spending, Wages Rise as Prices Slump 13th Month
By Aki Ito and Keiko Ujikane

April 30 (Bloomberg) -- Japan’s household spending, wages and job openings increased, while consumer prices tumbled for a 13th straight month, signaling a sustained recovery that’s still not strong enough to end deflation.

Today’s statistics were released hours before Bank of Japan policy makers are scheduled to announce their decision on monetary policy. Board members must decide whether to step up their efforts to contain price declines by expanding a 20 trillion yen ($212 billion) lending program. The bank is forecast to keep its benchmark interest rate near zero.

“The economy’s recovery is steadily continuing,” said Hiroshi Miyazaki, chief economist at Shinkin Asset Management Co. in Tokyo. Even so, “deflationary pressures are still deep- seated in the economy,” he said.

Household outlays rose 4.4 percent in March from a year earlier, the biggest gain since May 2004, the statistics bureau said today in Tokyo. Consumer prices excluding fresh food slid 1.2 percent from a year earlier. Wages advanced 0.8 percent, the first increase in 22 months, the Labor Ministry said.

Read complete article here.

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The EU and Asia.

I remember reading as an undergrad that artificial countries will never work out.  Good examples are the former Yugoslavia and Czechoslovakia.  We can never integrate people and their spaces together with other people and their spaces if they are different culturally.  We need very strong leaders to hold such constructs together.

In recent times, we saw problems in China with Tibet and Indonesia with Timor. Now, the problem which is more glaring is the EU. The EU is different in that it is made up of different countries.  These countries have given up their own currencies to embrace a common currency.  This, effectively, surrenders some of the individual countries' control over their economic destinies. This is probably a reason why Baroness Margaret Thatcher, then Prime Minister, refused to have the UK join the EU.

In The Straits Times on 29 April, I read with concern as an article reported that there is little danger to Asia because of our little trade exposure to the EU.  It said that the EU consumes 19.8% of China's exports, 12.4% of Korea's, 11.9% of Japan's, 11.9% of Thailand's, 10.3% of Taiwan's and just 4.9% of Singapore's.  These numbers are based on a 12 month average ending March.

What should be considered, in my opinion, is the missing multiplier effect. If China loses 19.8% of her export market in any substantial way, we can imagine them importing less from other countries and this will impact other countries' trade figures in total.  Same goes for Japan, Korea and also Singapore.  The fallout will have earth moving consequences for us in Asia.

Unfortunately, there is no end in sight to the EU's problems, it would seem.

Blame Germany, Galbraith Says:
"Extreme Brinkmanship" Imperils Europe
Posted Apr 30, 2010 03:43pm EDT by Aaron Task



In sum, the Greek bailout may alleviate the immediate crisis but is far from a "permanent solution," the economist says. European officials will be "fighting fires continuously until they address the constitutional problem" of the EU.