From What I Can Tell, The Japanese Economy Is Heating Up
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On paper, the Japanese economy is in the dumps, but from what I can tell, it's really cooking.

As I noted last month, I've been using my own feet as a mode of transportation lately. Having had errands near the corner of Kyoto's Sanjo and Karasuma streets a few times in the last week, I've made the almost-three-mile round-trip stroll down Sanjo Street at various times on various days, and have been astounded with how busy and vibrant everything is. Every shop seems full, every restaurant doing brisk business, every traffic light accompanied by a throng of shopping-bag-laden pedestrians waiting for the green.

To be fair, this was a three-day weekend (not because of Christmas, mind you, but because Friday was the emperor's birthday) and some of the area I walk through is a prime spot for domestic tourism (that is, for Japanese from other parts of Japan visiting Kyoto). Still, it was astounding how hopping things have been.

Two years ago I posted a shocking comparison of the Japanese vs. US economy during the last 20 years, describing how in those two decades the Japanese national stock index had shrunk to a mere third of what it had been, while during the same span the American stock index had quadrupled. Since I wrote that post, the American stock index has gone up 20%, but the Japanese down about 15%.

But with the economy in the dumps for so long, then the agony of the earthquakes earlier this year, I'm wondering whether people have simply had enough and have decided to rebel by enjoying themselves.

The strength of the Japanese yen makes the rest of the world relatively cheap to those who earn in yen, particularly when they're spending it in US dollars: spending in US dollars with Japanese yen five years ago cost 50% more than it does now! That's shocking (and, incidentally, really horrible for people like me spending US-dollar-based savings in Japan.) Yet even with that kind of incentive to spend abroad, Kyoto seems to be really hopping.

I don't know how it all fits together or what it all means, but it certainly seems to bode well.


All 3 comments so far, oldest first...

I’m not very knowledgeable about economics, so I’m always confused when people talk about how “bad” the Japanese economy is. It’s still the third-largest economy in the world–not bad for a country the size of California. And people have a very high quality of life in general.

I think it’s only in the dumps compared to the bubble economy of the 1980s, which seems to have become the lens through which people judge normalness, instead of the aberration it really was.

— comment by Zachary on December 26th, 2011 at 11:43pm JST (6 years ago) comment permalink

Actually, I meant “standard of living,” not “quality of life,” which is a very different thing (physical vs. mental). I think Japanese people tend to have a high standard of living but a low quality of life.

— comment by Zachary on December 27th, 2011 at 7:16am JST (6 years ago) comment permalink

Are you the author of “Mastering Regular Expressions”?

Yes. —Jeffrey

— comment by Christopher Meng on December 27th, 2011 at 10:33am JST (6 years ago) comment permalink
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