In China, the government has decided that smartphone games should be played on weekends, one hour a day. My family is one of those that can't control children's smartphones.
The effect of the government's order was so great that it cleared up the problem that we have been struggling with for years. It doesn't matter the method as long as the result is achieved. Nevertheless, I have mixed feelings.
The Presidential Election and Japanese Stocks
As I mentioned last month, I raised my exposure to Japanese stocks. I am now overweight on the TOPIX with active, not index. I have raised the risk to the maximum by the end of this year. I expect three patterns of reaction to the new president.
1. Disappointment that Kishi will not bring new major changes
2. Foreigners buying in anticipation of structural reform with Kono.
3. Hold to wait and see what happens with Ishiba.
The base scenario is to sell if Kishi is elected.
Inflation in Japan
Japan has been brainwashed by reports of deflation, and people think inflation is impossible. If you look at the real-time price data that Dr. Watanabe analyses, the price of paying by card has risen 35% in 6 years.
Wages are not going up, so this is putting pressure on household budgets. It's a vicious cycle, and I wonder if the new government will be able to come up with measures to change it.
"EC price data from Consumption Now.
Japan-U.S. Comparison of Labor Productivity
Another structural problem is the low level of labour productivity in Japan. In the U.S., labour productivity rose at an annualised rate of 2.1% in the April-June period. Japan's labour productivity has remained at 0.6% over the past 25 years.
This is an issue that Prime Minister Suga has been discussing with Mr. Atkinson every week. How will the new prime minister tackle this issue?
Labor Productivity in Japan
Japan's labour productivity ranks about 20th among OECD countries. It may be difficult to match Norway, but we want to be better than Italy and the UK.
If concrete measures are introduced, such as the Digital Agency, it may change the way the world looks at the Japanese market.
