Aktuelle Frage im Economics Forum:
„Wie beurteilen Sie die jüngsten Entwicklungen der japanischen Wirtschaft und welche Aspekte sollten Investoren im aktuellen Umfeld besonders genau berücksichtigen?“
Current question in the Economics Forum:
“How do you assess the latest developments in the Japanese economy and which factors should investors monitor closely in the current market environment?”
"Premierminister Abe hat den „dritten Pfeil“ seines Programms zur „Wiederbelebung“ der japanischen Wirtschaft abgeschossen. Nach fiskalischen Maßnahmen zur Ankurbelung der Konjunktur und einer extremen Lockerung der Geldpolitik zielt dieser auf strukturelle Reformen ab, die der seit vielen Jahren lahmenden Wirtschaft neuen Schwung verleihen sollen. Das vorgestellte Konzept zeichnet sich u.E. jedoch durch eine nebulöse Unbestimmtheit aus und taugt damit kaum als Initialzündung für einen Wirtschaftsboom. Aus diesem Grund ist nicht mit ausländischen Aktienengagements zu rechnen. Daher sollte die derzeit weiter erodierende Realrendite japanischer Rentenpapiere die bestimmende Einflussgröße für die Entwicklung des Yen bleiben. Und dieser Faktor spricht für eine anhaltende Schwäche des Yen – insbesondere gegenüber dem US-Dollar. Damit bleibt Japan für uns kein wirkliches Must Have für internationale Investoren."
"In the second quarter of this year Japan recorded its largest GDP contraction since the earthquake and tsunami hit in 2011. The single most important reason for the downturn is technical: demand surged in the first quarter (and the one before that) as consumers spent more ahead of a sales tax increase in April. The main lesson from the data is that any focus on quarter-on-quarter seasonally adjusted (potentially annuallised) real GDP growth figures is wholly misleading. Looking at such data maximises the amount of potential distortions.
The first lesson in economics is that the truth is usually the opposite of what they tell you. For the decade until including the end of 2012 we had been told that Japan was doing ok, boasting 0.9% real GDP growth on average over the decade. Yet, actually Japan’s economy contracted by 0.4% on average during this decade. What matters to businesses, employees and the government is, however, nominal growth, not so-called "real growth": investment, turnover and profits are in nominal terms, salaries and wages are in nominal terms, and tax revenues and revenues from bond issuance are all in nominal terms. Add to the 0.4% contraction of nominal GDP growth the other major problem, namely of world-record deflation (averaging a whopping 1.3% over the decade), and economists will tell you, ‘real growth’ was plus 0.9% (real growth equals nominal growth minus inflation, hence in this case nominal GDP contraction plus deflation -- -0.4% minus -1.3% -- is, hey presto, positive real GDP growth).
So, revisiting the second quarter 2014 GDP we find that things were not really very bad at all when we consider year-on-year nominal GDP growth. Yes, consumption was flat on this basis, but nominal GDP expanded by a highly respectable 1.9%.
This recovery is due to an expansion in bank credit growth, since bank credit creation for GDP transactions determines nominal GDP (as we know from the Quantity Theory of Credit, see Werner, 1997, 2012). PM Abe would do well to focus on this, and put other measures, such as fiscal stimulus, tax raises or so-called supply-side structural reform on hold, since these are all counter-productive. The fastest way to boost nominal GDP growth and bank credit would be for the Finance Ministry to stop issuing government bonds, and instead fund the public sector borrowing requirement by entering into loan contracts with the nation’s banks. This is in line with my original definition of ‘quantitative easing’ when I proposed it in 1995. This is of course also the best method for Greece, Spain and other European countries to reflate quickly and cost-effectively."
Kwok Chern-Yeh, Director & Head of Investment, Japan, Aberdeen Asset Management (18.08.2014):
"Ahead of the increase in the sales tax in April there was concern that it may derail the economic recovery. The latest GDP figures suggest that policymakers may need to step in to stimulate the economy. Yet the quandary is the country has a huge debt mountain and revenue raising is a priority. It is not as if the sales tax is especially high relative to other countries.
For growth to be sustainable, Prime Minister Abe has to deliver on his promise to restructure the country’s uncompetitive industries and progress on that front has stalled too. It’s a reflection of the difficulties he faces in prising open protected industries and changing corporate Japan’s mindset. For us as long-term bottom-up investors our focus remains identifying good quality, well managed companies that despite the macro headwinds are able to perform well."
