Auto & Transportation

With the new Japanese Prime Minister Fumio Kishida and the new cabinet taking office on October 4, the nationwide COVID-19 vaccination campaign that has lasted for more than half a year has gradually moved to a new stage. According to the vaccination data released by the government on October 4, 60.9% of the population over 12 years old in Japan who completed two vaccinations, and 71.3% of the population who received at least one vaccination, are expected to receive the second dose in the middle of this month. The vaccine population will exceed 70%.

The increase in vaccination rates caused Japan to lift its emergency declaration on September 30, and the streets resumed their previous congestion. The lifting of the epidemic blockade measures will undoubtedly stimulate the economy. The Governor of the Bank of Japan Haruhiko Kuroda said on October 7 that as the impact of the epidemic eases, the Japanese economy may recover early.

The first is the recovery of the international economy, especially the economies of major developed countries, and the strong growth of the Chinese economy, which has led to an increase in Japan’s exports. The manager of the Bank of Japan Osaka branch said that despite the supply constraints, Japan’s exports are showing an upward trend due to the recovery of the overseas economy. And the Governor of the Bank of Japan believes that Japan's economy has recovered, driven by exports and manufacturing. At the same time, Japan, the world's third-largest economy, will show clearer signs of recovery, because Japan's strong corporate profits and capital expenditures partially offset the weak domestic consumption.

According to data released by Japan’s Ministry of Finance a few days ago, Japan’s total exports in August were 6.61 trillion yen, a year-on-year increase of 26.2%, achieving double-digit growth for the sixth consecutive month. Among them, Japanese car exports are still strong. The data shows that from January to August 2021, the top three countries in terms of export volume of auto products are the United States, Japan, and Mexico, accounting for 14.9%, 4.8%, and 4.7% of the total, respectively.

Secondly, consumption in Japan has recovered. Consumption in western Japan is facing strong downward pressure, but as the number of new crown infections begins to decline, especially the lifting of the national emergency on September 30, it will greatly promote the improvement of domestic consumption in Japan.

Moreover, the Governor of the Bank of Japan Haruhiko Kuroda recently emphasized that the central bank is ready to maintain large-scale stimulus measures because the epidemic effect puts pressure on consumption and keeps the inflation rate away from the 2% target. On October 8, Japanese Prime Minister Fumio Kishida instructed relevant government departments to formulate an economic stimulus plan at a cabinet meeting, and the government will prepare a supplementary budget for the 2021 fiscal year and strive to pass it before the end of this year. According to Fumio Kishida's speech after becoming president of the Democratic Party, he plans to formulate an economic stimulus plan of tens of trillions of yen before the end of the year.

In addition, Japanese Prime Minister Fumio Kishida also put forward ideas for reforming the Japanese economy. He believes that Japan’s economic policies need to be reformed, in line with the current laws of development, and strive to achieve a new type of economic growth and a virtuous cycle of distribution in the post-epidemic era. The core content proposed by Fumio Kishida when he was running for prime minister was to reduce consumption tax, and implement a measure of actually zero personal income tax for people whose annual income is less than 10 million yen (approximately RMB 580,000). The financial reduction brought about by tax cuts is borne by large companies and the wealthy class. In addition, the Limin Party of Japan also proposed a progressive tax rate for corporate income tax, raising the maximum personal income tax rate, and including the middle class, to effectively reduce the heavy burden of life. Stimulate consumption to promote economic operation. Kishida Fumio said that we need to spread the fruits of economic growth to everyone, and we must narrow the gap between rich and poor.