At present, Japan's nominal GDP ranks third in the world after the United States and China. Experts also warned that if Japan does not adopt policies to improve labor productivity and international competitiveness, it will be surpassed by Germany within five years at the latest.
Before this amazing forecast was released, the data released by the Cabinet Office of Japan recently showed that Japan's per capita GDP had dropped by 1 bit, ranking 20th among the 38 member countries of the Organization for Economic Cooperation and Development.
The continuous depreciation of the yen is one of the main reasons why Japan's GDP continues to shrink in dollar terms. However, according to market data, the yen against the US dollar may have bottomed out at 10 last year. Analysts pointed out in the comment email sent to national business daily that the yen may be undervalued for a long time, and the yen may strengthen steadily against the US dollar this year.
Japan's nominal GDP may be surpassed by Germany as early as this year.
According to the report in Sankei Shimbun, according to the economic forecast data of the International Monetary Fund, the nominal GDP of Japan will be 4.3006 trillion US dollars by 2023, while that of Germany will be 4.3 1 1 trillion US dollars.
The reporter of National Business Daily noticed that in 1968, thanks to the rapid economic growth, Japan's nominal GDP surpassed that of West Germany, ranking second in the world, second only to the United States. By 20 10, Japan was overtaken by the rising China, and fell to the third place in the world, and at the same time lost its Asian throne which it had maintained for nearly 40 years.
The IMF also predicts that even if Japan can barely avoid being surpassed in 2023-2027, the GPD gap between Japan and Germany will narrow to about 6.7% by 2023.
Screenshot of the report of Sankei Shimbun
According to Hideo Kumano, chief economist of the First Institute of Life Economics, if the exchange rate of Japanese yen against the US dollar depreciates to 1 USD 137.06 yen every year this year, then Japan will be overtaken by Germany.
Hideo Kumano pointed out that the main factors affecting the nominal GDP of Japan and Germany are the continuous depreciation of the yen and the inflation difference between Japan and Germany.
First of all, although the ultra-loose monetary policy implemented by the Bank of Japan in 20 13 boosted the performance of Japanese exporters, the Japanese economy shrank in dollar terms.
On the other hand, the inflation trend in Germany is also extremely strong. However, in Japan, the "four lows" economic miracle of low income, low prices, low interest rates and low growth has lasted for many years.
The data shows that in 2022, the average annual inflation rate in Germany was 8.7%, while in the same year, the average inflation rate in Japan was 1.9%, according to Statista. In addition, from the perspective of hourly labor productivity, Germany is 60% higher than Japan.
Hideo Kumano said: "If we don't have a sense of crisis, it would be really bad. In order to avoid being surpassed by Germany, we need to focus policy resources on improving the productivity of growth strategies. "
France has surpassed the nominal per capita GDP.
The worries of Sankei Shimbun are not groundless.
Japan's per capita income growth is weak, and the sluggish personal consumption has dragged down the overall economic growth. The reporter of China Business Daily noted that the annual calculation results of the national economy released by the Cabinet Office of Japan recently showed that Japan's nominal per capita GDP in 202 1 year was 39,803 US dollars, ranking 20th among the 38 member countries of the Organization for Economic Cooperation and Development, and being surpassed by France.
This is the second time that Japan has fallen to the 20th place after three years since 20 18. In 2020, Japan ranked19,39,984 USD. France ranked 20 th, and this time it reversed.
"Japan Times" report screenshot
Last Wednesday, the Bank of Japan also lowered its GDP growth forecast for the fiscal year ending March 365,438+0, slightly lowered its forecast for 2022 from 2% in June 65,438+0.9%, and raised its inflation forecast from 2.9% to 3%. Meanwhile, the Bank of Japan lowered its GDP growth forecast for the next fiscal year from 1.9% to 1.7%, and raised its inflation forecast for the next fiscal year from 1.6% to 1.8%.
In addition, as the driving force of national economic growth, although Japan's population is nearly 40 million more than Germany's, it still faces the great challenge of declining birth rate. On 28th of last month, Japanese Prime Minister kishida fumio warned that Japan was on the verge of losing its social function due to the rapid decline of birth rate, and promised that the child-rearing policy would be the most urgent agenda this year.
Kishida fumio's warning comes after the Japanese government released an estimate earlier this month that the birth population in Japan may fall below 800,000 for the first time in 2022. Kishida fumio said that the policy aimed at promoting children's upbringing is "the most effective investment in the future" and vowed to "create a child-oriented economy and society" to reverse the downward trend of the birth rate that hinders Japanese long-term productivity growth.
Is the cycle of yen weakness over? Analysts are optimistic about the yen.
The National Business Daily reporter noted that in March 2022, the Federal Reserve started the most radical interest rate hike cycle since the 1980s. Although most other central banks followed suit to raise interest rates, the Bank of Japan stood out from the rest, insisted on ultra-loose monetary policy and continued to buy Japanese government bonds, which directly led to the continuous rise of the US dollar against the Japanese yen and hit an intraday high of 1 in 2022.
The continued depreciation of the yen is also one of the main reasons why Japan's GDP continues to shrink in dollar terms.
Image source: Britain is finance.
On the 20th of last month, the "lone ranger" Bank of Japan, which insisted on easing policy, finally compromised. On the same day, it announced that it would raise the yield target from 0.25% to about 0.5%, but at the same time, it would increase the purchase scale of Japanese government bonds from 1 in March 2023 to 9 trillion yen per month. This policy similar to "raising interest rates" triggered a sharp rise in the yen on the same day, and the Japanese stock market plummeted. Some analysts believe that the Bank of Japan's policy shift on the 20th means that its policy focus shifts to protecting the yen.
However, at the interest rate meeting on June 5438+1October 18, the Bank of Japan "stayed put", not only maintaining the ultra-loose policy unchanged, but also maintaining the target range of benchmark government bond yield unchanged. On that day, the yen plummeted, and the increase of USD/JPY expanded to more than 2%. The yield of 10-year Japanese bonds once broke 0.5%. However, the market is not "dead". Analysts firmly believe that the change of the Bank of Japan is coming, and they are also optimistic about the yen.
BenjaminShatil, JPMorgan Chase's foreign exchange strategist in Tokyo, said that the market thinks that the Bank of Japan will eventually have to give in to the pressure, so it is difficult to interpret the yen's decline as a turning point: "In some respects, the Bank of Japan has decided not to make any changes, neither to change its policies nor to change its forward-looking guidelines, which will cause the Bank of Japan to wage a protracted struggle with the market."
DerekHalpenny, head of global market research at Mitsubishi UFJ Financial Group, said in an email to national business daily that the Bank of Japan's policy change is of great significance. As the Bank of Japan begins to normalize its monetary policy, it will inevitably lead to continuous speculation on its further policy adjustment.
"We suspect that the Bank of Japan's policy adjustment is under the pressure of the Japanese government, that is, kishida fumio wants to get rid of the policy framework designed by the Bank of Japan under the' Abenomics', because this may strengthen market speculation. We mentioned the first candidate to succeed Haruhiko Kuroda before, but now we have another competitor-Hiroshi Yamaguchi, the former deputy governor of the Bank of Japan, who worked under Masaaki Shirakawa, the former governor of the Bank of Japan. Hiroshi Yamaguchi recently publicly advocated increasing the flexibility of BoJ's policies. We expect that the next adjustment of the Bank of Japan's yield curve control will be made after the new governor takes office. This also depends to a large extent on the upcoming wage negotiations. If we can see signs of accelerated wage growth, it may prompt the Bank of Japan to take action. In any case, although the dollar fell by more than 65,438+00% against the yen, the yen is still undervalued. We believe that there is no reason to reverse the trend of strengthening the yen at present. This year, USD/JPY is likely to move steadily to the level of 65,438+020. " DerekHalpenny penny Penny added.