Bank of Japan and wage problems: 1.8% decline via the Kishida disaster
Kanako Mita and Lee Jay Walker
Modern Tokyo Times
The early period of the administration of Prime Minister Fumio Kishida is resulting in endless negative news. Declining Yen to Dollar rate at a level not seen for over 20 years, over 85 percent of all Covid-19 (coronavirus) cases under Kishida, real inflation-adjusted wages have declined by 1.8 percent, and increasing regional tensions with the Russian Federation (a far cry from positive relations under the late Shinzo Abe).
The “do nothing approach” of Kishida concerning the yen to the coronavirus crisis (outside of the usual reliance on foreign vaccines) is also ushering other negatives. Indeed, Kishida’s “New Capitalism” is equally a sham: it concerns rich people (with assets and high wages) to invest more wisely. This will change nothing for people who are already struggling after over two decades of static wages – and decreasing working rights. Therefore, for the working poor, lower middle-class, temporary workers, workers in the gig economy, and others – it is a gimmick.
Reuters reports, “Inflation-adjusted real wages, a key gauge of consumers’ purchasing power, fell 1.8% from a year earlier, extending a decline to post the biggest year-on-year drop in nearly two years.”
Masayoshi Amamiya, the Deputy Governor of the Bank of Japan (BOJ), implied that Japan will maintain its ultra-loose monetary policy. Hence, the BOJ will continue to buy Japanese Government Bonds (JGBs) when needed because of the internal economic straight jacket.
Amamiya said, “Japan’s economy hasn’t recovered yet to pre-pandemic levels… The foundations for an economic recovery remain weak and the outlook for wages is highly uncertain. As such, we need to support economic activity with accommodative monetary policy.”
The core consumer price index (CPI) highlights that costs have increased by 2.2 percent. This includes energy. Yet, importantly, it doesn’t account for important areas like fresh food. Thus, the real figure is higher than 2.2 percent and sums up the shoddy policies of the Kishida administration. After all, sanctions on the Russian Federation aren’t helping ordinary people in Japan – only pleasing the elites in Washington.
Modern Tokyo Times recently said, “Japan is blighted by the highest ratio of debt in the world. This concerns the endless mismanagement of the economy by the ruling LDP. Not content with this, the government is involved in the unhealthy buying of Japanese Government Bonds (JGBs) via the Bank of Japan (BOJ) – while the BOJ and the Government Pension Investment Fund (GPIF) hold roughly one-eighth of the market capitalization of the Tokyo Stock Exchange (the First Section).”
The only sure thing in Japan is that the ruling Liberal Democratic Party concentrates on manipulating the stock market – to help rich investors and mega-corporations. Hence, Kishida’s “New Capitalism” is focused on the wealthy asset-owning class. Meanwhile, after three squandered economic decades – where countless nations have taken over Japan concerning real GDP per capita: ordinary Japanese people fear for their respective pensions, limited working rights, the price of foodstuffs, low birthrate, and bread and butter issues that Kishida knows nothing about (he comes from the usual family political elites).
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