Sunday, Aug 30, 2009
Japan new gov stimulus
JDP: Japan Democrat Manifesto
The Japanese changed government for the first time in 50 years (ignoring a small change in the 90s). Here is the manifesto of the successful Democratic party. Major policy push directed to increasing the birth rate, more accessibility to education, free health care, more of a guarantee on the pension scheme. To put this into perspective, 250,000 yen is a good monthly wage in Japan, per birth they propose 500,000 yen with an annual stipend after that of 300,000 up to Junior school. This represents a huge fiscal stimulus. They also propose to change the nature of Japan to small government and domestic not external demand. This is relevant because a lot of Japanese savings are ultimately in dollars.
Posted by stillthinking @ 09:42 PM (636 views) Add Comment
7 Comments
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1. paul said...
The Japanese people I know say that very little will change in reality. Give it six months and it'll be business as usual.
The reason most Japanese savings are held in dollars?
Well even after 10 years of ZIRP, foreign currency accounts still look attractive! Did someone say the UK has escaped Japan's lost generation fate?
2. clockslinger said...
Japan is, in theory, a place where the QE thing has been tried already, albeit (i) not to the extent nor as soon into the downturn as it has now been done here nor (ii) in the context of a coordinated effort with foreign governments. As I understand it these are the two main reasons why our masters think "it will be different here" for the property market...oh, and also the demand due to population increase and the birth rate of course. Last time I was in Tokyo residential property looked "cheap" compared to the UK (although it is never a case of comparing like for like). I have no personal knowledge if things have changed although I heard word that commercial property had recovered quite sharply about two years ago (in Koishikawa and other upmarket areas of Tokyo at any rate). Anybody know?
3. Tennouji said...
Stillthinking- I wouldn't say that 250,000 was a "good" wage. It's fine for a young, single person, but a family would struggle on that amount and a lot of young women have no intention of working after marriage. I keep hearing that the average is 400,000 but know a lot of people taking home 200-280,000 (though mostly women it must be said).
4. japanese uncle said...
Clockslinger
Koishikawa is in no way an upmarket area for commercial properties, but a traditionally residential area. Anyway property market in Tokyo experienced another bubble for the past few years indeed, which is again collapsing spectacularly now.
QE just helped Japanese banks replenish their balance sheets that had been severely impaired because of their own follies. We are seeing exact repitition now in the UK.
5. clockslinger said...
JU thanks for that. See, I had no idea that there had been another burst of price growth back in Tokyo despite Mrs Clockslinger coming from there...She, like many other Japanese folk, seem to have a more balanced view of property back home, namely poor investment and better to rent unless you are in for the very long term.
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7. sibley's b'stard child said...
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