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I haven't seen a thread analyzing what's happening in Japan, despite all the recent changes that have taken place.
I will try to update the topic with good links, and I hope you can help me with that:

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Japan's debt to GDP ratio FAR exceeds any other country in the world (it was okay in a deflationary environment)


Inflation in Japan maintained the same level. Even after the Fukushima disaster, Japan stopped relying on nuclear energy and replaced it with fossil energy and liquefied natural gas, which did not cause inflation.


Can this go on forever? Could Japan be "a deflationary island on its own?"

"Borrow at Yen %, invest at USD %"


Now the question is, HOW BAD is japan's situation?

https://www.mof.go.jp/english/policy/budget/statistics/IMFSDDS/index.html

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Many thanks and source @genesisvol twitter account

Russia's debt to GDP ratio is an interesting statistic cited there. I hope people can compare russia's debt numbers to other nations and comprehend what it means.

Over the past few decades, many prime ministers of japan have unexpectedly resigned. As if they didn't want to be involved in the political agendas taking place. That was one key indication of something not being right about japan's future direction.

Japanese automakers like toyota tried to share industry knowledge to help american automakers improve the quality of their products. When americans refused to improve their methods, even after being shown better methods of production. Japanese automakers seemed to reduce the quality of their own cars and trucks, so they would no longer be distinctly superior to american made automobiles. There were many red flags and indications of behind the scenes dealings going against what was in japan's own best interests.

Japan's military and defense were crippled by post world war II restrictions. Once japan became dependent on the USA and others for protection, it was all downhill from there. A slippery slope of debt and reduced standards.

I guess you need to travel to Japan to understand this country which is unlike any other.
The good and bad thing about Japan is that the country has very strong foundations, and that the people are trustworthy.
It's incredibly difficult for African countries, Albania or Russia (before the sanctions) to get a loan from a foreign bank. Banks are afraid they will default, but the bank of Japan can print money without any fear that the society would collapse, or it can borrow whatever money it wants because everybody knows they will pay back. And that has become a real problem, because governments do not care enough about balancing the budget.

Your title is very good, and there's an easy answer: nothing's happening in Japan.

Prior to the corona virus and omicron pandemic, from an economic point of view, Japan was one of the most developed countries in the world. GDP (gross domestic product, i.e. the value of all goods and services produced in Japan in a year) is the second highest in the world, and Japanese brands such as Toyota, Sony, Fujifilm, and Panasonic are well known worldwide.

but after being hit by inflation and the omicron, Japan's GDP contracted by 1%. namely in the first quarter of 2022 experienced a contraction. The rate of inflation as well as the surge in cases of the Omicron variant of the Covid-19 variant, turned out to be pressing the economy of the country of the rising sun quite deeply.

but I was so impressed with the discipline of the Japanese people and their government that I thought Japan would be fine.

referring to the thread, I personally think that this country has the power and perspective in regulating its economy. Whether it's the printing of the value of the amount of money in circulation so that it has such an impact (inflation) so that the performance of state revenues, both import and export, gains their economy.
I don't think a developed country like Japan will just fall down to share natural resource rights for a cooperation agreement (debt impact).
I think that such debt is used by Japan for other projects (maybe outside of infrastructure or something to do with it)
I think if this is a strategy then Japan will be able to reverse the situation as before.
maybe the current news is horrendous, but we'll see how prepared Japan is with this condition.

A country's Debt to GDP ratio might not be what it seem. Its numbers do not immediately suggest whether a country is economically strong or not, or whether a country is prone to default on its loans or not. This is not a straightforward data. In which case, we cannot jump right into the conclusion that since a country like Russia has 19% Debt to GDP ratio, it is economically doing better than the US which has 134%, or even than Japan which has 256%. This isn't like comparing two similar bananas.

Much of Japan's and the US' debts are domestic debts. These are loans borrowed from themselves. These aren't debts that are owed to China or whatever country.

In other words, these countries are not really buried in debts as if they are having a hard time. We have to take note that the US has the largest economy in the world. Japan has the second largest in Asia. Singapore is also a very rich country and has one of the highest GDP per capita. The same goes to Bahrain. But they all have more than 100% Debt to GDP ratio.

The Yen is already down -20% this year

The country imports products from abroad, so to keep the same prices unchanged, the country must continue burning reserves in the Forex market.

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Assuming that this was true in the past, it is impossible for this statement to continue to be true in the future. If interest rates on the balance sheet are less than 4%, then tax revenues cannot account for those costs.

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According to my information about Japan, the Central Bank was charged with increasing inflation to about 2% from negative rates. It even tried to give negative interest to attract Japanese people to spend. Now, inflation will increase for reasons beyond the control of the state, which leads to reverse deflation on the part of the Japanese, which may increase the matter either.

The Debt/GDP ratio of Japan has been known for decades. Did you recently find out about this info?
I'm not familiar with the structure of the Japanese debt, but it seems that there's no major problem with it, since there's no attention coming from the mainstream financial media. I assume that Japan has lots of domestic debt and domestic debt isn't such a big problem, compared to foreign debts. I also assume that the debt has a pretty long term repayment structure. Most of the payments are postponed for several decades.
The biggest problem of Japan is not the national debt. The biggest problem is the bad demographics: less young people and more old people. This will cause a drastic change in the Japanese economy and social security system in the upcoming decades.

Japan still looks pretty great at the moment as a developed country, but according to some statistics, Japan economy is currently in a deteriorating condition due to high inflation and also the impact of the increasing spread of the corona virus and omicron in the country, according from BBC News media even now Japan economic growth in the third quarter of 2021 contracted 3.6% and in the fourth quarter of 2021 it contracted 4.6%, right now food prices in Japan to rise by almost 20% due to the increasing trade deficit.

Interesting. Japan does have that management and spark to maintaining the same over the period of time. Japan has advantage of small demographic and geographical area thus easy to maintain the finances or at least keep up with the worlds inflation in their own ecosystem. I am not sure how much these factors can affect but it’s important one when you run whole country and maintain the finances. Japan is also very advance country and are capable of emphasising modern era problems in shortest way possible. This helps in reduction of costs, easy to adapt solutions and more. Could be one of these things to help maintain Japan it’s GDP like that.

Yes, it can go like this forever as there is nothing anyone can do about it.
You rise oil prices, people will travel less, you raise food prices people will go only after staple food, the thing is that you can't have any of these commodities rise up in price only in Japan for example at 300% without impacting in the rest of the world, and form here it will be only a matter of who blinks first.
Let's assume gas prices double from now and it forces even Japanese people to spend more of their budget, by the time that happens the demand destruction in other places where others can't afford this will bring prices back in check.

I've always said, Japan is the perfect example of a country that highly depends on imports of both food and energy that goes against every global trend because of its people, if they don't want to there is nothing you can do, simple as that.


It all depends on who owns this debt.
I owe 20 000$ to a loan shark, I'm fucked.
I have a mortgage of $20 000 over 20 years at 100$ a month.
My business owes my parents business 5000$ for different products, is that a problem?
I owe 5000$ to a guy that owes me 6000$, we both have a debt of 11k$ which can be settled with $1k.

Same here, who has all that debt?
Another nice example was the European debt crisis, you know, that things that was supposed to destroy Europe and send it back to the zerohedge , stone age!

https://talkimg.com/images/2023/06/12/A8wRw.jpeg

Remember those?   ;D


Yeah, the 11th most populated country in the world.



High inflation? Lol!

I think I read somewhere that it was about how much of it needs to be paid asap, and how much money they had. So, let's make some numbers up, let's say you have 200 dollars in debt that you have to pay, and you only make 20 bucks, but only 10 bucks of the 200 will be needed to pay today, what do you do?

You pay that 10, and have 190 left, and use the rest of the money you have to build something. That is why Japan might be doing fine, because even though they have big debt, due to inflation and many other aspects, the amount they have to pay asap is not that big deal for them. Many nations have that, USA has that as well, it is quite ordinary to have debt.

In my opinion, Japan's situation is not bad at all. In fact, it's downright enviable! It's amazing how they've been able to get away with this for so long.

They should be more concerned about their aging population and low fertility rate. With how the things are, they might have to import male sperm too in near future lol
But yea, debt is a problem too. But Japan has a very strong industrial base, and its economy is very export-oriented. This has helped Japan to weather the global recession fairly well. Japan's economy is also very efficient, with a very low level of unemployment. This is where the difference comes  ;) A developing country would crumble and won't be able to invest in its future. A developed country like Japan can enjoy a bountiful present & future because of its industrious past.

Japan was suppose to be a super power. There was speculation in the 90's that they could use their economy to propel them as a world leader, but their economic growth stalled out, plus they couldn't keep a large military. Their economy will probably continue to slow with their debt/GDP being unsustainable in addition to their growing elderly population. They essentially don't have enough young workers to subsidize the older folks. That causes an economy to collapse extremely quickly despite what their debt might look like.

BOJ were the originators of this whole QE yellow brick road we're on and they are the first to meet the Wizard.    Its worth a discussion of what we will find behind the curtain, it could shock the world to find QE is a load of baloney when it was supposedly genius.   Seems already obvious to me we're in a trash situation but until the mainstream consensus comes to this unfortunate conclusion we move in circles not progress towards any resolution.

In the past 5 years...  JGB volatility was stable like this


But move above occurred in 3 -days


Now the BOJ has NO CHOICE but to hold rates down.
Can investors afford 0% investments? with about 9% USA CPI inflation


Source and thanks @GenesisVol twitter account https://mobile.twitter.com/GenesisVol/status/1536962330570809344

It seems that the situation in Japan is beginning to take a very dangerous turn, as the media reported that the Japan ex-PM Abe assassinated while making election campaign speech


Source: https://www.reuters.com/world/asia-pacific/japan-ex-prime-minister-abe-may-have-been-shot-taken-hospital-nhk-2022-07-08/


I do not want to talk about political changes because the news is still interacting, but let's see the impact on the economic situation.

USD/JPY fell -0.06% to 135.9 as foreign exchange traders sought out the Japanese currency, following the news about Abe

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That's also their hiring foreigners for their manpower. Japan's economy is suffering right now and lots of aspects are affecting it including the number of their population. However, Japan is a strong country and they have been through lots of economic and political crises yet it still survived and recovered. Even other Asian countries are affected by the global economic crisis but I believe that Japan still has an edge when it comes to the recovery period.

Politically, what's happening right now is that Abe was assassinated shocking the entire world primarily because of the fact that crime rate related to guns is very low in Japan at present.

Economically, they keep piling up pressure on workers like crazy creating a really bad work-life balance for majority of them leading to lower productivity in the long-term.

World leader? Lol. This was the dumbest prediction ever. Japan is a tech giant, but their military strength lags behind several countries primarily because of their numbers.

In terms of growth, if Japan continues to be a deflationary sland of it's own obviously it is going to lag behind many big economies in GDP growth sooner or later. To increase the pace of it's GDP growth it has to enter an inflationary scenario but that could be harmful for them considering the amount of loans that they are carrying also your country isn't a lucrative place for foreign investors as well if you are having a deflationary currency for a very long time.

Japan's crime rate has always been misleading.

If police in japan find a body with cigarette burns and obvious indications of torture. They'll label the case "suicide" if they have no leads. To ensure their statistics for solving cases continue to look good. This trend has been documented for many years. But has not received much publicity.

I think edged weapons like knives and swords are preferred tools of violence in japan. Due to them being harder to trace and identify than guns.

The yakuza were the main faction of organized crime in japan. Recently, japan passed laws cracking down on yakuza which prevents them from owning phones, having bank accounts and barring them from other essential daily necessities. It would seem the yakuza are being replaced by other forms of organized crime. And perhaps we're seeing indications of this with Shinzo Abe's unfortunate assassination attempt.

The economic situation at Japan is simply unsustainable, not only they are the most indebted country around the world in terms of debt to GDP ratio, their demographics are also terrible as their population is going down every year and there is less people working in order to pay the government debt, this means that at some point Japan will have to default on its debt, and when that happens all hell will break loose and most of the economies of the world will enter a recession or even a depression after it.

Japan GDP was top 5 in the world next to USA,China.Inflation in the Japan was the root cause for the variation in the GDP/Debt ratio.The economic conditions of the Japan was unique over a far period of time.Japan was not affected after the Irosima Issue,they come back to the stable situation by the stop of nuclear production.So their economy was easily recovered one.Japan will be the base economy for many of the very small countries.

Japan will stay to be a powerful and rich nation. Just because they are doing worse, doesn't change the fact that other nations are doing even worse to keep them there. So lets assume that you went down %10, if all else went down %20 then you are doing fine. The sad news of Abe will definitely impact it in the coming months, its not a shock that foreigners would not want to further invest at this moment after such deal, which does impact the nation, but they are big enough to do what they want with their own economy. Crime would continue to be whatever it is, its globally known, and have movies about it, so nobody should consider it a calm place. Doesn't mean its like mexico neither, its just a metropolitan place with some crime, just like how New York had/has five families, but doesn't make New York "unlivable" suddenly.

Being the 3rd biggest economy in the world, I would say not bad at all, they are mourning of course because of the death of their longest serving Prime Minister.

They are not a BAD case because of Abenomics, even if Japan's population is decreasing, the workforce policies that are set was to welcome women, and immigrants and even seniors.

When you have one of the most famous presidents of a nation attacked and killed, the economy will collapse a bit, there is no doubt about that. It's not a common thing and maybe it's not really shocking to Japan because they had these type of stuff in their history before, but hasn't been that many since the social media age, we didn't really see it all around the world news all that commonly. Now we are going to see how their economy will be impacted.

I still think it's not going to impact crypto though, like what does Abe assassination and crypto have in common? That looks like something totally unrelated and would not matter to crypto world at all.

It may seem as if Japan is doing well, however the size of its debt is simply too big to ignore and it is not a problem that it is going to go away on its own and it needs to be fixed somehow, and personally I do not see it how they are going to fix that problem as it has gotten to a point in which I think is unmanageable, so even if the size of the economy of Japan is impressive we will not know what is its actual and real size until we see the current scenario playing out completely and they have to face the problem of their debt.

Although Japan has the status of being the third largest economy in the world, still the impact of COVID-19 and also the Russian invasion of
Ukraine it dealt a hard blow to the Japanese economy. There is a lot of data that we can find on the internet that Japanese household spending
has decreased, it is due to rising energy prices, eventually suppressed the pace of business in Japan. So Japan is also now trying to improve
its economy, and the assassination of Shinzo Abe at least affected the Japanese economy a little, although not so much. And also based on
the information I read on the Asahi Shimbun, the killer and his family did go bankrupt and it was proven that economic difficulties could be
a trigger for crime.

Of course the assassination that happened to the former Prime Minister of Japan will not affect the crypto market, because it has nothing to do
with the death of Shinzo Abe and cryptocurrency. So don't because the price of Bitcoin is back down now, it has something to do with Shinzo Abe's
death. The Bitcoin drop was completely unrelated to Shinzo Abe's death. After all, the decline in the price of Bitcoin is still fairly normal, because
it has been a long time the price of Bitcoin has been stable, not far from the price of $20k. What we can do right now is to be patient and wait for
the bull market to come.

How can you make so many mistakes in just 3 lines of text?
Japan is the third-largest economy in the world, inflation was never a factor in Japan, actually, Japan experienced deflation, and there was no Irosima issue, maybe you're thinking of Fukushima but god knows how you can mistype that so bad, and how Jpana will be the base for very small countries, that's another mystery.


Oh really:?
So a decrease in spending of 0.5% in a year is a hard blow?


How can you even quantify this? How can you claim it has affected the economy when it happens just 5 days ago?

Economy of Japan will not be stable for a while, it’s going to get damaged from this. It is not the first time a politician gets attacked in Japan, but this is a big news for sure. I believe that we are going to see Yen getting lower for a while.

It already dropped a small bit, and it is going to probably drop a bit more, and that’s going to be something terrible for all of us because Japan is a g7 rich nation and it is always bad for the rest of the world to have a g7 nation doing badly. It means that less import/export business would be available, because nobody wants to do it when it's volatile. In the end, it will get regular and we will forget about this eventually too.

I think that there is nothing new about the economic situation in Japan. Japan is the third trading power in the world and one of the best economic and technologically advanced countries. The country, like all other countries, was affected by the first and second wave of Corona, which led to a contraction of 0.2%, which is a small percentage as you can see, as I read in Some websites reported that the Japanese Cabinet approved an additional budget of 2.7 trillion yen (21 billion dollars) for the current fiscal year, which began last April. This budget aims to mitigate the factors of rising energy, food and other commodities prices as a result of the Ukrainian crisis. This measure is expected to contribute to improving the economic situation in Japan until the end of the year.

I think so because Shinzo Abe is popular and has influence in Japan. So usually the news of the death of a famous person will affect the Japanese
economy, especially his death due to murder. But after I read some update news and asked my friend who was in Japan, my guess turned out to be
wrong. The sad news of the death of the former Japanese Prime Minister did not have much effect on the Japanese economy. After a few days after
the death of Shinzo Abe, the Japanese stock index was seen to have slightly jumped and the YEN value also seemed to have strengthened.