Japan's automobile sales slumped 31.3% in October from a year earlier to mark the fourth straight month of declines, industry data showed on Monday, a sign output cuts caused by the COVID-19 pandemic were hurting the country's already weak consumption, Reuters reported. The domestic sales data is among few indicators available so far in gauging the strength of consumption since state of emergency curbs to combat the pandemic were lifted on Sept. 30. The sales slump highlights the widening damage of supply disruptions on the economy.
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Japan
Bank of Japan chief Haruhiko Kuroda said there is scant risk of the country’s inflation accelerating in the same way it has elsewhere in the world as he reinforced the message that stimulus will keep rolling in Tokyo even as other central banks pare theirs back, Bloomberg News reported. Inflation trends overseas and moves by the Federal Reserve and other monetary authorities won’t sway BOJ policy or soften the yen, Kuroda said at a press briefing after the central bank stood pat on policy and lowered its price and growth forecasts.
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Japan finally has an inflation pulse and the gains are much stronger than they first appear, a factor that could start to influence speculation over the Bank of Japan’s policy path, Bloomberg News reported. While the first rise in key consumer prices in 18 months was just 0.1% in September, once the impact of slashed mobile phone fees is removed, core inflation is closer to 1.4%, according to a Bloomberg calculation. The sharp reductions in cellphone charges stem from a campaign of public pressure on mobile carriers to reduce fees by former Prime Minister Yoshihide Suga.
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Japanese Finance Minister Shunichi Suzuki said the nation’s incoming government will seek a new type of capitalism that helps tackle wealth inequality, but on questions around the sales tax, debt and the central bank he sounded like the official he replaced a day earlier, Bloomberg News reported. “I’ll be seeking to bring about a new form of capitalism that creates a virtuous cycle of growth and wider wealth distribution,” Suzuki said at his inaugural press conference Tuesday, a day after succeeding long-serving finance chief Taro Aso.
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Japan's business mood improved for a fifth straight quarter in September with manufacturers perking up on robust global demand, a central bank survey showed on Friday, boding well for the next administration's bid to pull the economy out of the doldrums, Reuters reported. Steady progress in vaccinations and hopes of a re-opening in economic activity also helped lift non-manufacturers' mood, the survey showed, underscoring the Bank of Japan's view an end to state of emergency curbs will prop up consumption.
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Mizuho Financial Group's main banking arm said on Thursday a system glitch has been delaying some foreign exchange transactions, just a week after it was slapped with a regulatory punishment over system troubles earlier in the year, Reuters reported. Japan's third-largest lender has experienced a series of technical problems despite a $3.6 billion overhaul of its systems in 2019, prompting the Financial Services Agency (FSA) to become more involved in inspections of its computer system, an unusual move for the banking regulator.
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Bank of Japan Governor Haruhiko Kuroda played down the risk of a crisis from the troubles in China’s real estate market that have been exposed by the downfall of developer China Evergrande Group, Bloomberg News reported. “China’s real-estate problem is somewhat different from the problem we faced” in Japan in the late 1980s and early 1990s, Kuroda said in a virtual panel discussion at a forum hosted by the European Central Bank Wednesday. “Extremely speculative investment in the real estate market does not appear to be the case in the Chinese case,” he said.
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Japan’s Government Pension Investment Fund, the world’s largest pension fund, said it won’t include yuan-denominated Chinese sovereign debt in its portfolio, Bloomberg News reported. The decision comes as FTSE Russell is set to start adding Chinese debt to its benchmark global bond index, which the GPIF follows, from October. The pension fund will instead use a version of the World Government Bond Index that excludes Chinese government bonds, Hiroshi Nagaoka, an official at the pension fund, told Bloomberg News.
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Japan's financial watchdog said it requested Mizuho Financial Group Inc. and its banking arm Mizuho Bank to submit a work plan for system maintenance after a series of system failures this year, in a rare move to effectively oversee the system of a major bank, Kyodo News reported. The Financial Services Agency made the request as part of its business improvement order issued amid lingering concerns over the security of the financial group's system after it experienced seven failures this year.
According to Teikoku Databank, the number of bankruptcies in Japan resulting from COVID-19 (including companies with liabilities of less than ¥10 million and individually run businesses) reached 2,000 as of noon on Sept. 3, 2021, nippon.com reported. Liabilities from the bankruptcies totaled ¥620.6 billion, with 58.2% (1,163 bankruptcies) involving liabilities of less than ¥100 million. The first bankruptcy related to the pandemic was confirmed on Feb. 26, 2020. Following that, 500 bankruptcies were confirmed as of Sept. 8 of that year; 1,000 as of Feb.