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Chart of the Week: Japan’s Robots

2019-03-14T10:24:41-05:00June 12, 2018|

By IMFBlog

June 12, 2018

Version in 中文, 日本語

A Panasonic robot moves around the lounge of Tokyo's Narita International Airport (photo: Yoshio Tsunoda/AAFLO/Alamy Live News)

As Japan’s population ages and the birth rate is too low to sustain growth, the country is no stranger to coping with a limited number of working age people.  (more…)

Chart of the Week: Women Workers Wanted in Japan

2019-03-14T16:28:33-05:00November 21, 2017|

By IMFBlog

November 21, 2017

Versions in 中文(Chinese), 日本語 (Japanese)

A Japanese mother works at home with her child. Encouraging women to take on full time work and have children would help boost growth in Japan (photo: iStock by Getty Images).

Problem: Japan is the most aged society among advanced economies (almost 27 percent of its people are over 65). It also faces a shortage of labor (unemployment is just 2.8 percent). Both limit the country’s growth potential. (more…)

Aging Japan Puts a Strain on the Financial System

2019-03-25T10:33:35-05:00August 10, 2017|

By Gaston Gelos and Sònia Muñoz

August 10, 2017

Versions in 中文 (Chinese), 日本語 (Japanese)

Elderly shoppers in Tokyo’s Sugamo district: As Japan's population ages, demand for financial services shifts (photo: Issei Kato/Reuters/Newscom).

Japan’s population is shrinking and getting older, posing challenges to the nation’s financial system. How Japan copes could guide other advanced economies in Asia and Europe that are grappling with the same trends but are at an earlier phase of similar demographic developments.

(more…)

Higher Policy Uncertainty Could Be Bad News for Japan’s Economy

2019-03-25T15:17:32-05:00May 30, 2017|

by  Elif C. Arbatli, Steven J. Davis, and Arata Ito

May 30, 2017

Version in  中文 (Chinese), 日本語 (Japanese)

Policy uncertainty remains a challenge in Japan, and can harm the country’s economic performance according to a new IMF study. The good news is that credible plans for taxation, spending and structural reforms, as well as greater clarity about monetary policy can reduce uncertainty. (more…)

Can Raising Japan’s Minimum Wage Accelerate Wage Growth?

2019-03-26T14:33:03-05:00November 28, 2016|

By Luc Everaert and Giovanni Ganelli

Version in 日本語 (Japanese)

Japan’s minimum wage is 798 JPY ($6.52) per hour, lower than many other advanced countries, including the United States, and among the lowest relative to the average wage (see chart). For a country that needs consumers to boost spending to pull the economy out of 15 years of deflation and reinvigorate growth, a hike in wages across the board can go a long way. (more…)

Japan: Time to Load a Fourth Arrow—Wage Increases

2019-03-27T11:17:38-05:00March 13, 2016|

By Luc Everaert and Giovanni Ganelli

(Version in 日本語)

Everybody agrees: wages need to grow if Japan is to make a definite escape from deflation. Full- time wages have increased by a mere 0.3 percent since 1995! For example, despite its record profits, Toyota increased its base salary only by 1.1 percent last year. The average of 219 Keidanren firms managed just 0.44 percent. Clearly, an increase in base wages, colloquially referred to as “base up”, is long overdue.

(more…)

Unpicking the Riddle of Sluggish Investment by Japanese Firms

2019-03-27T15:14:10-05:00September 10, 2015|

By Joong Shik Kang and Shi Piao

(version in 日本語)

Japanese-brand cars have become everyday, household items in the United States, and it’s hard to drive in the country without seeing one on the roads. These cars may be manufactured by Japanese firms, but about 70 percent of these vehicles are actually produced in North America. Globally, in 2014, about two-thirds of Japanese cars were produced on assembly lines outside of that country. Despite the increase in overseas demand for Japanese vehicles, this hasn’t been mirrored by an expansion in investment, and the building of factories in Japan to meet that demand.

Against this background, our IMF Working Paper looks at possible reasons for this sluggish recovery of corporate investment in Japan, focusing on the role of Japanese firms overseas.

(more…)

Foreign Help Wanted: Easing Japan’s Labor Shortages

2019-03-27T15:23:44-05:00August 24, 2015|

By Giovanni Ganelli and Naoko Miake

(Version in 日本語)

Take a walk in Tokyo, and you will see the sign スタッフ募集中, or “Staff Wanted”, outside many restaurants and convenience stores. These businesses often find it impossible to recruit the workers they need. According to recent statistics, for each job seeker in Japan applying to work as a waiter, there are more than three available positions. Home helpers and long-term caregivers are equally in demand. If you want to work as a security guard, you can choose from around five openings, and for some positions in the construction business the job-to-applicant ratio is over six.

Japan’s labor shortages are the result of both a shrinking population—which limits the overall pool of workers—and skill mismatches. The reduced supply of labor is one of the factors bringing down medium-term potential growth, which the International Monetary Fund estimates at just 0.6 percent. Labor market shortages are also bad for short-term growth, because they reduce the effectiveness of the monetary and fiscal stimulus that the authorities are using to try to boost demand.

(more…)

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