Monday, June 8, 2020

Coronavirus factors into Air Force’s typhoon preparations in Tokyo - Japan to the brink of recession

Stars and Stripes is making stories on the coronavirus pandemic available free of charge. See other free reports here. Sign up for our daily coronavirus newsletter here. Please support our journalism with a subscription.

YOKOTA AIR BASE, Japan — The Air Force is ready to house families in separate emergency lodging at Yokota to prevent the spread of the coronavirus if they’re evacuated during typhoon season in Tokyo, officials said June 5.

Preparations are underway at the home of U.S. Force Japan in the Japanese capital with members of the 374th Civil Engineer Squadron trimming trees to protect power lines and clearing drains to stop flooding when the next big storm arrives.

Yokota-based weather officer 1st Lt. Gregg McCambley, 30, of Horsham, Pa., said the Pacific Ocean appeared to be in a “neutral phase” but could enter a La Nina pattern later in the year.

A La Nina involves cooler than average temperatures in the central and eastern Pacific causing more typhoons near the Philippines but likely fewer near Japan, he said.

In October, Typhoon Hagibis pummeled the Japanese capital with wind gusts as high as 104 mph and record-breaking torrential rain. U.S. military bases in and around the city reported minimal damage but 11 people assigned to Yokota, which got a record 15 inches of rain, were evacuated from their off-base homes due to flooding.

In August 2016, more than 300 families living at Yokota were displaced after Typhoon Mindulle caused flooding that knocked out power and water service to their homes.

The Air Force has made sure it has enough space to house any evacuated families separately so that they don’t spread the coronavirus, said Senior Master Sgt. Shawn Jamison, 37, of Aiken, S.C., superintendent of readiness and emergency management at Yokota’s Civil Engineer Squadron.

In a typical year the western Pacific gets 20 to 25 storms that can range from tropical storms to super typhoons in Tokyo, McCambley said.

Ninety-six hours out from a typhoon’s expected arrival, bases will announce Tropical Cyclone Condition of Readiness level 5, indicating that people should prepare food, water and emergency supplies, he said. When sustained winds reach 58 mph or frequent gusts of 69 mph they will declare level 1-E (emergency), meaning people should stay indoors.

SOURCE [ 1 ]


How coronavirus, typhoons and taxes drove Japan to the brink of recession

TOKYO -- Outside Masahisa Noda's secondhand shop in Tokyo's Asakusa district are racks of bargain items, on sale at 30% off; on the glass door is a sign offering a 5% rebate for cashless payments. Inside, surrounded by kimonos and obis stacked neatly on shelves, Noda is gloomy about the future. A hike in the consumption tax last fall hit his sales hard, and he sees little prospect of a recovery.

"People buy a kimono as a small luxury. It's not an essential item," he said. "A tax increase of just 2% can still make people postpone purchases. Sales started slowing even before the higher tax kicked in. People had already become defensive. They tried to avoid unnecessary spending."

The tax rise, from 8% to 10%, came into effect in October. Its impact on consumer spending was far greater than economists had forecast. Consumption dropped 11%, and the economy shrank by an annualized 6.3% in the final quarter of 2019. Any hopes of a quick rebound were then dashed by the outbreak of the new coronavirus, which abruptly cut off tourist arrivals from China.

Asakusa is a popular tourist destination, and foreigners account for 10% to 20% of sales at Noda's store. Chinese visitors have now almost entirely stopped coming, and even locals are staying away. "Japanese people now avoid visiting Asakusa, because it's popular with tourists," he said. "They fear they will catch the virus if they come here."

The consumer slump, falling demand in China and the impact of the virus could push Japan back into technical recession -- defined as two consecutive quarters of economic contraction -- for the second time since Prime Minister Shinzo Abe took office in 2012. Back then, he promised to "break down any and all walls looming ahead of the Japanese economy, and map out a new trajectory for growth."

His strategy, dubbed "Abenomics," was supposed to jolt the moribund economy back to life using three "arrows" -- aggressive monetary policy, fiscal flexibility and major socioeconomic reforms to make corporate Japan more entrepreneurial and efficient. Automation, along with labor and immigration reforms, would help to take the pressure off the overstretched workforce; financial technology would streamline business; and a huge influx of foreign tourists -- toward a target of 40 million per year by 2020 -- would bring a new source of income.

While monetary stimulus did force down the yen, and the government did spend -- and borrow -- enormously on fiscal stimulus, small traders like Noda did not feel the benefits. The tourism boom barely offset falling domestic spending.

"When [Abe] was elected as prime minister in 2012, it gave me hopes that things might improve the next year," Noda said. "But my hopes have shrunk like a balloon losing air."

Abenomics' more profound reforms are still a work in progress. External pressures are mounting, and Abe's time and political space seem to be running out.

"It is very clear that we are, right now, crash-testing Abenomics," said Jesper Koll, economist and senior adviser for the U.S. asset manager WisdomTree. "Quite frankly, we don't know how resilient the system is going to be."

All aquiver

The Matsuya department store is right in the heart of Ginza, Tokyo's high-end retail district. Next to the Louis Vuitton building and across the street from Apple, Chanel and Cartier stores, it has become a place of pilgrimage for wealthier Chinese tourists, who often travel with an extra empty suitcase so that they can stock up on luxury goods -- cosmetics, apparel, bags, pearls and watches -- at Matsuya and its neighbors. Foreign tourists make up a quarter of the store's sales, according to Shimpei Kono, Matsuya's sales planning manager.

Like many retail businesses, Matsuya had braced for the sales tax rise. The store had a surge of business in September, as consumers made large purchases before the hike. Sales rose 18% on the year, before plummeting 20% in October, pushed down by not only higher prices but also the impact of Typhoon Hagibis, which barreled through Tokyo and Yokohama during the three-day weekend of Oct. 12 to 14. A 10% drop in the Chinese currency against the yen was another factor.

Year-on-year sales were down 0.8% in November, and 1.5% in December. Business picked up in January and early February, however.

"Sales were especially strong toward Valentine's Day, as the store attracted many female customers in their 20s, 30s and 40s," Kono said. "It made me expect a full recovery."

Indeed, the Abe government's decision to go ahead with the tax hike in October was a show of confidence that the economy could withstand the blow.

The prime minister took power in the aftermath of the financial crisis, amid a deep slump and after several recessions. There seemed to be no clear route out of the stagnation: Corporations were hoarding cash, and a "lost generation" of people in their 30s and 40s, who had missed the opportunity to secure lifetime jobs during the country's boom, seemed doomed to remain underemployed.

Successive governments had found themselves without the political and fiscal leeway to address the country's long-term challenges. Labor shortages, rising welfare liabilities and falling consumption from a declining population are already pressing issues, and will only get worse. The International Monetary Fund forecasts that Japan's gross domestic product is on track to fall by a quarter in the next 40 years due to a spiraling demographic decline.

"When you lose 500,000 customers per year, you will have a very hard time to have consumer spending be an engine for your country's growth," said Michael Thomas Cucek, assistant professor of Japanese politics at Temple University's Japan campus. "This was always on the horizon."

With the economy in the mire, necessary long-term measures, including raising taxes to meet the inevitable increase in health care and pension liabilities from the aging population, had proved all but impossible. Attempts to raise the sales tax were particularly politically toxic. The IMF says that Japan needs to increase the tax to 15% by 2030, and 20% by 2050, but it took two decades to get the public to accept even a modest 5% rate. Attempts to raise it further have brought down governments.

Abenomics promised to break the cycle of short-termism. Huge stimulus packages, starting with 13 trillion yen (then $117 billion) in 2013, would reflate the economy and give space for structural reforms. Bringing more women and more migrants into the workforce would ease labor shortages. Labor reform would make the workforce more competitive and push up wages. With government support, companies would embrace technology, particularly in payments, where a continued dependence on cash was seen as holding the economy back.

For a while, it seemed to be working. For the first time in decades there was a swagger to the Japanese economy. In 2013, the Nikkei Stock Average jumped 57%. Although growth was still not stellar, hiring increased.

"You have young people with a very positive outlook about their lives, due to the extremely massive hiring that has been possible under both the [fiscal] stimulus and loose monetary policy," Cucek said. "This generation is very upbeat."

But even as the early Abenomics surge fizzled out, the government kept spending. Gross public debt has risen to nearly 240% of GDP after successive stimulus packages. Despite the kick-starts to growth, reform has been slower than the government hoped.

SOURCE [ 1 ]

No comments:

Post a Comment