Shrinking Yen, Growing Concerns: Japan's Economy Feels the Force of Trade Winds

A Disturbance in the Force There Is

Hmm felt a tremor in the Force I have. Japan's economy shrunk it has for the first time in a year. Contracted 0.2% it did. A surprise this is. Expected a mere 0.1% shrinkage the economists did. Like sand through my fingers hope slips away it does. Strong with them economists are not. Truly wonderful the mind of a child is. Much to learn they still have.

Exports: The Empire Strikes Back?

Exports fallen they have. 0.6% down a dark path this is. Trump's trade policies the culprit they may be. Uncertainties they bring. A heavy economy Japan is. Rely on exports it does. Fear leads to anger anger leads to hate hate leads to…economic contraction! Careful we must be. Judge me by my size do you? And well you should not.

Domestic Demand: A New Hope?

But a glimmer of hope there is! Domestic demand grown it has 0.6%. Adding 0.7 percentage points it did. Strong at home Japanese companies are yes. Like a Wookiee defending its home fierce they are. A surprise to be sure but a welcome one. Size matters not. Look at me. Judge me by my size do you? Hmm? Hmm.

Yen Weakness: Use the Force?

Weak yen a double edged lightsaber it is. Competitive advantage it gives. But China's machinery overpowered it. Better after sales they have. Good quality too. Hmph. Difficult to see always in motion is the future. Patience young Padawan patience.

The Bank of Japan: Sitting Sidelines They Are

The Bank of Japan sitting they are. Rates unchanged at 0.5%. Waiting for certainty they are. One hike perhaps this year. Careful they must be. Too hasty action can be. Much like young Skywalker...impatience he has. Train yourself to let go of everything you fear to lose.

Inflation: The Phantom Menace?

Inflation surpassed 2% it has. Three years running it did. At 3.6% in April it stands. A phantom menace or a real threat? Examine both upward and downward deviations the Bank must. May the Force be with them. And with you always.