Japan
Wood Products Prices
Dollar Exchange Rates of 10th
Aug
2024
Japan Yen 146.20
Reports From Japan
Mega-quake advisory
A mega-quake advisory by Japan's Meteorological Agency
remained in place five days after it was issued on 8
August. Agency officials report they have not observed
any changes in the earth's crust where the jolt is expected
to occur. The agency put out the advisory after a
magnitude-7.1 earthquake struck off Miyazaki Prefecture
in southern Japan.
Officials say the probability of a massive earthquake is
higher than usual along the Nankai Trough which runs
from Shizuoka Prefecture west of Tokyo to the southern
tip of Kyushu.
See: https://www3.nhk.or.jp/nhkworld/en/news/20240813_01/
First quarter disappointment
According to an estimate released by the Japan Center for
Economic Research (JCER), Japan's the economy shrank
month on month by an annualised 0.3% in June pushed
down by increased imports. Private consumption, which
accounts for more than half of Japan's GDP, picked up in
June after a decline in May. The rise in June was the result
of the higher bonuses and the consequent increase in real
disposable income said the research centre.
In contrast, the JCER estimated corporate investment fell
2.8% in June and imports increased by 2.1%, exceeding
the small increase in exports. The JCER now estimates the
Japanese economy grew 2.8% in the April-June
quarter from the previous quarter on an annualised basis.
In related news, in a rare unscheduled revision to gross
domestic product (GDP) the government said the economy
shrank more than initially reported in the first quarter,
darkening prospects for a fragile recovery.
The downward revision is likely to lead to a cut to the
Bank of Japan's growth forecasts in further quarterly
projections and could affect the timing of its next interest
rate rise.
See: https://www.jcer.or.jp/en/economic-forecast/monthly-gdp
and
https://www.asahi.com/ajw/articles/15327146
Weak yen and inflation undermining household
confidence
A recent government report has said the weak yen is
hurting Japanese households' sentiment and eroding their
purchasing power, a signal of the government’s concern
over the negative economic impact of the exchange rate.
In 2013 expectations that inflation was rising helped
improve household spending but now the prospect of price
inflation against the back drop of the weak yen which has
pushed up prices for imports has undermined householder
confidence.
See:
https://www.japantimes.co.jp/business/2024/08/02/economy/japa
nese-economy-weak-yen/
Strengthening yen could dent exports
The Finance Ministry announced that Japan spent over yen
5.5 billion on foreign exchange market interventions
between June 27 and 5 August. This lifted the yen to
below 150 to the dollar. The sharp move up in the yen was
helped by the release of the US consumer price index for
June and the US producer price index both of which were
interpreted as signaling a cooling of the US economy.
In early August stock markets around the world lost
considerable valuations with the Japanese market dropping
around 12% in a day, the worst ever seen.
For Japan there are two main issues, the strengthening yen
could dent exports and the fear that the US economy is not
as strong as previously believed.
See;
https://japannews.yomiuri.co.jp/business/economy/20240801-
202239/
Yen at 140 to the US dollar at year end -
forecast
A media survey of currency strategists reveals that many
are predicting the yen to end the year in the mid-140
range to the dollar stronger than initially expected. As of
mid-August the yen has gained around 10% against the
dollar with the rate around 147.5. In July the rate was
close to 160 to the US dollar.
See:
https://asia.nikkei.com/Business/Markets/Currencies/Currency-
strategists-see-yen-closing-out-the-year-in-the-mid-140s
The lost generation - difficult to find stable
employment
Japanese in their 40s or early 50s, representing the so-
called lost generation, are struggling to secure pay growth
and career advancement, an issue more commonly seen
the older and younger age groups.
The lost generation graduated when Japan was suffering
the worst of the economic downturn after the bubble
economy years with many finding it difficult to find stable
employment. While Japan's overall wage level has started
to pick up data shows that there are still noticeable
disparities among different age groups.
A government survey shows that the average monthly pay
for full-time employees in their 20s and 30s increased by
more than yen 10,000 over the decade through 2023 while
workers in their late 40s experienced a rise of just over yen
1,000 and those in their early 50s saw a decline.
See: https://asia.nikkei.com/Spotlight/Datawatch/Japan-s-lost-
generation-faces-slow-pay-growth-lack-of-
promotion#:~:text=But%20another%20survey%20by%20the,earl
y%2050s%20saw%20a%20decline.
May 2024 wooden office furniture imports (HS
940330)
The value of HS940330 exports from China to Japan in
May were slightly down from a month earlier. In April
shippers in China accounted for around 70% of Japan’s
imports of wooden office furniture but this dropped to
65% in May but the second largest shipper, Malaysia,
almost doubled the value of shipments in May compared
to April.
The other main suppliers in May were South Korea and
Vietnam at around 4% each of total May imports.
Year on year, the value of Japan’s imports of wooden
office furniture in May 2024 increased by over 50% but
the value of month on month imports was down over 20%.
May 2024 kitchen furniture imports (HS 940340)
Year on year, the value of imports of wooden kitchen
furniture items (HS940340) in May was up 10% and
compared to April there was a 6% increase in the value of
May imports.
The top shippers in May were the Philippines, accounting
for about 42% of the value of May imports followed by
Vietnam at 34% with shippers in Germany contributing
another 5% of the value of imports.
In the first five months of 2024 there have been month on
month increases in the value of wooden kitchen furniture
except for the slight dip in April.
May 2024 wooden bedroom furniture imports (HS
940350)
Over the twelve months since June 2023 there has been a
remarkable upward trend in the value of wooden bedroom
furniture imports. While some of the increase in the value
of imports can be attributed to the weakening of the yen of
the period that does not explain the trend. Residential
housing starts have not increased enough to account for
the rise in wooden bedroom furniture which suggests
much of the demand was from the hospitality sector.
Shippers in China and Vietnam continue to account for
over 90% of the value of Japan’s wooden bedroom
furniture imports with 63% coming from China in May
and a further 31% from Vietnam. Shipments from
Malaysia and Thailand combined accounted for just 45 of
the value of May imports
Year on year, the value of May imports was up 23% and
there was a 6% month on month increase in the value of
imports.
May 2024 wooden furniture parts imports (HS 940391)
Japan imports wooden furniture parts from a wide range of
countries. Shippers in China, Indonesia, Malaysia and
Vietnam supplied most with only around 7-8% of the
value of May shipments originating in Europe and N.
America.
In May the value of arrivals of HS940391 to Japan from
the top four shippers accounted for over 80% of the total
value. May arrivals from China were down from a month
earlier, the value of imports from both Indonesia and
Vietnam were around the same level as in April with only
Malaysia posting gains in May.
Year on year the value of May arrivals of wooden
furniture parts was up 10% but compared to the value of
April imports there was a 6% decline.
Trade news from the Japan Lumber Reports (JLR)
The Japan Lumber Reports (JLR) closed its office in early
August so staff could participate in the Obon festival (also
known as Bon festival). This is an annual unofficial
holiday that commemorates deceased ancestors. It is
believed that their spirits return at this time so people visit
family tombs.
These days many people take advantage of the long break
to travel and enjoy a holiday.
News from the JLR will resume at the end of August.
For more see: https://japantoday.com/category/national/People-
start-to-return-home-for-Obon-holidays-amid-megaquake-
advisory
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