Japan economy: "Japan has had the highest net assets in the past thirty-three years"

CGTN Europe

CGTN Europe interviewed Seijiro Takeshita, Professor of at the School of Management at the University of Shizuoka

Transcript

00:00Earlier, I spoke to Sejuro Takshika, a professor at the University of Sozooka,

00:05and I started by asking him about Japan's debt crisis.

00:08Well, I think this subject had been swirled around very much by the words of Mr. Shiba,

00:15our prime minister, who said that our condition is worse than that of Greece, which is simply wrong.

00:22Now, I hear your point that, you know, our debt condition is in a very dire situation, that's true,

00:27but let's look at the right side of the balance sheet.

00:30In other words, if you look at the net assets, you know, Japan had had the highest in the past 33 years.

00:36It was surpassed by Germany this year.

00:38But basically, and if you look at the also composition of the debt itself, 94% of the debt is consumed within Japan.

00:46So we have a totally different condition to that of Southern Europe.

00:51So, of course, you know, I'm not saying we should relax on the back of the sofa,

00:55but, yes, you know, we are obviously in a very much of, I would say, almost a cornered state.

01:02That's very, very true, but not as serious as many people depict.

01:06So we've had some interesting, important economic data out, a bit of a mixed picture.

01:11So core inflation hitting more than a two-year high in Maine.

01:15What do you think is behind that?

01:16Well, undoubtedly, the inflationary pressure, particularly caused by foodstuffs, which has been rising,

01:23and particularly rice, our main diet, which has risen by 93% year and year,

01:28and also energy prices went up by more than 8%, which basically resulted in gases going up by 6.6%.

01:36And it seems, though, that consumers are wanting to spend more.

01:39They're one of the, if not the most conservative, you know, consumers in the world.

01:45They're very much risk avoidant.

01:48So, you know, they basically would start spending only if, in my opinion,

01:53they could clearly see the outcome of their corporate activities, you know,

01:57that is coming back to its feet and being brisk.

02:01You can throw money, you know, in their faces,

02:03which is what the government had been doing in the past two decades,

02:07which really does not have to multiply to the economy.

02:10It's been proven.

02:11And the reason for that is the conservativeness of the Japanese consumers.

02:15And also, let's not forget that, you know,

02:17the income hasn't risen for well over two decades,

02:21in spite of the fact that Japanese corporations have been making, you know, record profit.

02:26Now, this year, things are different.

02:28You know, of course, if you look at the wage negotiation,

02:31you can see all the companies finally starting to raise, you know, their pay, their wages.

02:37But obviously, you know, the mood, or I should say the atmosphere or the sentiment of the consumer

02:43isn't that positive because, as you just reported, you know,

02:47the rise in inflation is certainly dampening, you know,

02:50their consumer sentiment without a speck of doubt.

02:54And can Japan realistically manage inflation while its key export markets are weakening

02:59due to these increasing trade tensions, especially with the United States?

03:04It would be very, very difficult, to say the least.

03:07In fact, it would be almost impossible,

03:09considering the fact that Bank of Japan do not have the power to alter the trend of weakening at the end.

03:17Many people talk about the rate rise,

03:19but I think Bank of Japan's maneuverability is very limited.

03:23You know, they don't have the deep pockets that, you know, European central banks or Fed has.

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