The Bank of Japan on July 11 upgraded its assessment of the Japanese economy for the seventh straight month and said that it is “starting to recover moderately” on the strength of various economic indexes turning upward, including improving business sentiment and steady consumer spending.
Certainly the economy and the effect of Prime Minister Shinzo Abe’s economic policy will be important points voters will consider in casting their ballots in Sunday’s Upper House election. For the first time since January 2011, the BOJ used the word “recovery” in its economic assessment. The problem, however, is that the average citizen has yet to benefit from this “upturn.”
In his campaign, Mr. Abe appears confident because the BOJ has provided an optimistic economic assessment and the opposition forces are divided. On the day the BOJ announced the moderate economic recovery, the prime minister, campaigning in Miyazaki, said: “The real economy is improving without fail. Our economic policy is not amiss.”
The prime minister should pay heed to data from other sources besides the BOJ and keep in mind that the people who have recently made money off rising stock prices and splashed out on luxury goods represent a very small portion of the population.
According to a survey in late May by the Japan Business Federation, the average summer bonus paid by large companies increased 7.37 percent from last year to ¥846,376 — the second biggest gain following an 8.36 percent increase in 1990. But the Labor, Health and Welfare Ministry’s July 2 report shows that the average scheduled monthly wage in May was ¥241,691, a drop of 0.2 percent from the same month a year before and representing a decrease for 12 consecutive months.
The nationwide consumer price index, excluding perishable goods, in May, showed no increase or decrease from the same month a year before. Thus consumer prices stopped falling for the first time in seven months. But higher prices for imported resources, attributable to a weaker yen caused by the BOJ’s massive monetary easing, are pushing up prices of food, gas and electricity.
A June survey by the Cabinet Office shows that an index of citizens’ sentiments toward economic conditions deteriorated for three consecutive months. In addition, the consumers’ attitude index, which covers such factors as people’s life circumstances, movement of income, the employment situation and readiness to replace old durable goods, dipped in June for the first time in six months. These figures show that people are becoming cautious about the country’s economic prospects.
To win votes, it will not suffice for opposition parties to simply criticize Mr. Abe’s economic policy. They must present alternative policy measures that are capable of nurturing an economy in which all citizens benefit from economic growth rather than just those who are already well off, as is currently the case. For their part, voters should cast their ballots on the basis of their own economic well-being, not on the basis of the BOJ’s data.