japanese economictrends aug 2014

Japanese Economic Trends

August 2014Japan External Trade Organization

Copyright (C) 2014 JETRO. All rights reserved.

1. Achievements of Abenomics

2

2. Outlook of Japanese economy

3. JETRO’s services for attracting overseas companies

Copyright (C) 2014 JETRO. All rights reserved. 3

“Three arrows” strategy of Abenomics

1st arrow: Bold monetary policy

20 years of stagnation

○Long-lasting economic stagnation and deflation

○High level of public debt

<Annual average economic growth rate for 20 years until 2012>

(Average for 20 years)

Nominal GDP growth: - 0.2% Real GDP growth: 0.8% Real GNI growth: 0.6%

A new decade of revival

○Improved macroeconomic environment

○Improvement in corporate profits

○Revitalization of the economy, Fiscal consolidation

<Annual average economic growth rate for 10 years since 2013> (Target of the government)

Nominal GDP growth: 3.0% Real GDP growth: 2.0% Real GNI growth: 3.0%

Launch of the Abe Administration ～ Jun 2014

2nd arrow: Flexible fiscal policy

○The process of ending deflation and better economic cycle has started.

Real GDP ：　 growth in 6 consecutive quarters.

Improved business conditions and investment

Job openings ratio ： 1.6

Unemployment ： below 4%

The “Three Arrows” policy is bringing Japan out of deflation, and has started a positive economic cycle. In order to end deflation completely, and spread the benefits of this positive cycle, the

government will continue with the first two arrows, and launch the third arrow to ensure sustained economic growth.

3rd arrow: Growth strategy that promotes private investment

Source: Basic Policies for Economic and Fiscal Management and

Reform (decided at Cabinet meeting on June 14, 2013)Source: Basic Policies for Economic and Fiscal Management and

Reform (decided at Cabinet meeting on May 24, 2014)

Source: same as the right


Abenomics 1 ： Bold Monetary Policy

○ In January 2013, the government and the Bank of Japan (BOJ) released a joint statement introducing a “price stability target” aimed at achieving 2% inflation.

○ In order to reach the above target in 2years, in April 2014 the BOJ introduced quantitative and qualitative monetary easing (QQME).　　　・ Double the monetary base in 2 years　　　・ More than double the average remaining maturity of government bond purchases in 2 years

○ In the statement published after the Monetary Policy Meeting on May 21, 2014, the word “Deflation”, which had been present in the previous statements, was deleted.⇒Mr. Kuroda, president of the Bank of Japan explained “ it was deleted to imply that the QQEM is proving effective”. This was widely accepted as “The silent announcement that deflation is over”.

○”We are still halfway to achie the 2% inflation target. Comparing to the beginning of QQME, it is certain that we have made significant progress. It is a great advancement.” （ Mr. Kuroda’s interview with the WSJ, May 27, 2014)

1st arrow: Bold monetary policy


Abenomics 2 ： Flexible Fiscal Policy

2nd arrow: Flexible fiscal policy

* Firm goal to reduce the primary balance deficit by half in fiscal year 2015. Additional economic measures to be done without issuing new government bonds.

Emergency Economic Measures for the Revitalization of the Japanese Economy

Economic Measures for Realization of Positive Cycles

Goal ： To end deflation and revitalize the economy with compatible public finance.Additional public finance : 10 trillion JPY（ Total project scale: 20 trillion JPY ）

Goal: Take measures to tackle the impact of the increase of consumption tax.

Government expense: 5.5 trillion JPY（ Total project scale: 19 trillion JPY ）

Main Areas: Main Areas:1. Post-quake reconstruction and disaster prevention.2. Creation of wealth through growth.3. Ensuring a sense of security in daily life and revitalizing regions.

1. Strengthening competitiveness2. Support for women/young/elderly3. Reconstruction, disaster prevention and safety4. Care for low-income earners and moderation of rush demand/recoil

Summarized by JETRO based on Cabinet meeting documents.


Abenomics 3 ： Growth strategy

3rd arrow: Growth strategy that promotes private investment

Reflect the fruits of

economic revival to the

daily life of the people.

Fully utilize the ability of the private sector

・ Regeneration of industry and acceleration of venture business.・ Restructuring of the regulations and open up the public sector to the private.

Full participation ・ nurturing global personnel

・ Friendly work environment for women.・ Utilizing the ability of the young and the elderly.・ Educate the young to be global talents.

Creating new frontiers.・ Reviving Japan as “the nation of technology and intellectual property”. ・ Break out into the world and attract the world.

Aims to make the positive economic cycle that was created by the “First Arrow” and the “Second Arrow” a continuous trend, and revive Japan’s “earning ability”.



Japan revitalization

strategy

Industry Revitalization Plan

－ Strengthening the industry base －

Strategic Market Creation Plan

－ Creating new markets through tackling the social

issue －

Strategy of Global Outreach

－ Gaining access to the growing global markets.

－

“Invigorating talent, products and wealth”

・ Revive manufacturing competitiveness.・ Create high-value service industry・ Create society with good business environment and highly utilized personal talent.

Investing public funds in research and Easing regulations in fields with the below conditions. ・ Fields in which Japan has global strength.・ Fields in which global market growth can be expected.・ Fields with certain strategic plans.

“Taking in the global economic growth”

・ Actively promote Japanese technology to the world. ・ Attract global talent, products and wealth to Japan.

The government adopted the “Japan revitalization strategy”, and decided on the below three action plans to carry out the growth strategy.1. “Industry Revitalization Plan” Strengthening the industry base.⇒2. “Strategic Market Creation Plan” Creating new markets through tackling the social issues.⇒3. “Strategy of Global Outreach” Gaining access to the growing global markets.⇒


Speeding up the restructuring of industries

Target: 10% increase in capital investment over the next three years and a return of private investment

to pre-Global Financial Crisis levels

Scientific and Technological Innovations

Target: Number one global innovator on the Global Competitiveness Report

within the next five years

Strengthening Japan's international competitiveness

as a business hub Target: Japan to rank in the top 3 among

OECD member countries in the Ease of Doing Business ranking (currently 15)

Becoming the world's leading IT society

Target: World's highest level of public data disclosure, (with a dataset totaling

over 10,000) by the end of FY 2015

Reinforcing human resource capabilities and reforming the

employment systemTarget: Decrease long-term unemployment

by 20% over the next five years and raise employment turnover to 9%


Industry Revitalization

Plan

By renewing the industries and talent in the private sector, and dispensing with unnecessary regulations and restrictions in the public sector, the private and public will actively carry out economic policies together.



Strategic Market

Creation PlanRealizing clean and economical energy demand and supply

　　　　　　 Building safe, convenient and economical

next-generation infrastructures

Creating new growth sectors through taking initiative in tackling social issues, and resolving social insecurity and nurturing industrial growth in parallel.

Increasing the nation's healthy life expectancyTarget:・ Expand the market scale of the health promotion, preventive care, living assistance industries to 10 trillion yen by 2020.・ Expand the market scale of the pharmaceutical, medical device and regenerative medicine-related industries to 16 trillion yen.

Target:・ Capture domestic and international energy technology sales of approximately 26 trillion yen by 2020.

Target: ・ Implement maintenance and repairs on all important and aging infrastructures, by using advanced and efficient technologies such as sensors by 2030.

Building regional communities that use their unique local

resources to appeal to the worldTarget: ・　 Advance a transition to “the sixth industry”　　　　　　　　　　　 (collaboration of primary, secondary 　　　　　　　　　　　 and tertiary industries).　　　　　　　　　　　・ 30 million foreign visitors to Japan 　　　　　　　　　　　 by 2030.



Strategy of Global Outreach

Strategic promotion of international commerce and economic partnership

> Promoting economic partnership such as TPP and FTA.> Targeting trading FTA ratio of 70% by 2018.

Strategic plan to gain access to the growing global market > Integrating global markets though infrastructure export. > Targeting infrastructure exports of approximately 30 trillion yen by 2020.

Preparing capital and talent base that sustain the growth

of Japan.> Promoting globalization from within.> Doubling inbound investment by 2020.

Actively and strategically gaining access to the global market and nurturing growth sectors,so that Japanese enterprises and people can gain from the growing global market.


Achievements of Abenomics in numbers

Increase

Stock prices(Nikkei Stock Average)

Exchange rates(Yen exchange rate to the dollar)

Unemployment rate

GDP(Real GDP growth rate)

Business conditions(Tankan “current situation”)

10,230 yenDec. 26, 2012

Launch of the Abe Administration

-0.3%2012 Q1-Q4 average

2.45%2013 Q1-Q4 average

15,162.1yenJun. 30, 2014

48%

increase

85.15 yen Dec. 26, 2012

101.39 yenJun. 30, 2014

Sharp

depreciation of

the yen

4.3%2012 average

3.7%　 Q1 2014

Improved

Large firms -3Medium-sized firms -5SMEs -12

Survey in Dec. 2012

Large firms 12Medium-sized firms 19SMEs 1

Survey in Jun. 2014

Greatly

improved

Since the launch of the Abe administration, the Japanese economy has achieved a high standard of growth. GDP, stock prices, exchange rate and unemployment have all improved.


Achievements of Abenomics (examples)

1. A new headquarter institution was set up in May 2014, which will strategically manage R&D in the field of medicine.2. Established a new legal framework to accelerate the commercialization of regenerative medicine.

Healthcare sector

Launched the first fundamental electricity reform in 60 years.→ Legal separation of electricity generation and distribution (to be achieved by 2020).→ Opening up the electricity market to small retailers (law already in place, to be implemented in 2016).

Energy Sector

1. Enhanced economic partnerships （ Participation in TPP negotiations, agreeing on Japan-Australia EPA)2. Enhanced top-level government involvement in sales (2012 ： 25 cases→2013 ： 67 cases ） 3. Relaxed visa requirements mainly for ASEAN countries. 4.Increased number of international flights at Haneda airport by 30 thousand.

Business Globalization and Tourism Sector


Accelerated structural reforms in Japan (1)■Corporate Tax ReformIn order to strengthen Japan’s competitiveness as a global business location, the government is reforming the corporate tax system to lower the rate to a globally competitive level, making it a pro-growth tax structure.

The tax period of the corporate tax for the reconstruction from the Great East Japan Earthquake ended one year ahead of schedule. [The corporate tax was reduced by 2.4% since April 2014]

Special tax system to promote capital investment into productivity increase was launched in January 2014 [10,000 capital investment cases have been recorded]

! !Main Initiatives to Date

New Measures for pro-growth corporate tax reform

New goal to reduce the percentage level of the effective corporate tax rate down to the twenties in the next several years.

The first phase reductions will start from FY2015. In order to make such reduction consistent with the FY2020 target to achieve primary

surplus, permanent revenues will be secured through such measures as broadening the tax base and so forth.


Accelerated structural reforms in Japan (2)■Attracting Talent from Overseas

Create an environment where skilled professionals from overseas can play an active role. Revise the Points-based immigration system for highly skilled foreign professionals.[Starting from April 2015]

Current point-based system for skilled professionals

Further Benefits for highly skilled foreign professionals

More Info: http://www.immi-moj.go.jp/newimmiact_3/en/index.html

Example:Doctor’s degree: 30pts7 year experience: 15pts6 million JPY salary: 15ptsPublished papers: 20pts Total: 80pts

Points given for academic history, employment history, salary and research achievements.

A total of more than 70ptsqualifies as skilled professional.

Qualified to apply for permanent residence after 5years of stay.

Easier to get work

permit for spouse.

If certain conditions fulfilled,

parents can reside in Japan.

・ More points given for certain qualifications 　 (eg. MBA, MOT).・ Salary received from overseas employer can be counted in the point system.

Professionals who are

planning to stay less than

1 year can benefit from the systemReduced the period of stay necessary to

apply for permanent residence

(5years→3Years).

Example:Doctor’s degree: 30ptsMBA: 5pts7 year experience: 15pts8 million JPY salary: 20ptsPublished papers: 25p ts Total: 95pts

http://www.immi-moj.go.jp/newimmiact_3/en/index.html

http://www.immi-moj.go.jp/newimmiact_3/en/index.html


Accelerated structural reforms in Japan (3)

In order to realize the growth strategy, National Strategic Special Zones were created forcarrying out drastic regulation reforms. The below 6 areas were specified, to begin with.

Tokyo Area (including Kanagawa and Chiba)

・ International business and innovation hub > Urban development> Employment guideline> Medical care for foreigners

Niigata City

・ Center for agricultural reform in large-scale farming

Osaka/Kyoto/Hyogo Area

・ Center for international innovation in the field of medical care, etc. and general support

Yabu city , Hyogo

・ Center for agricultural reform in hilly and mountainous areas

Fukuoka city

・ Center for employment system reform to promote new businesses

Okinawa

・ Center for international tourism

■National Strategic Special Zones





16


日本政府民間予測平均0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.2

0.85

国際的に見た日本の対内直接投資の現状 GDP forecast in FY2014

FY2014 real GDP growth rate outlook

Japanese Government : Summary of the Cabinet Office Mid-Year Trial Calculations for FY2014 (2014/7/25 Council on Economic and Fiscal Policy)Private Sector : Aggregation of forecast by 42 Japanese economic forecasters and organizations (Japan Center for Economic Research “ESP Forecast Survey,” July 2014)

FY2014 economic outlook

　 Japanese Government

Japanese Economic Forecasters

Real GDP growth 1.2 0.9

Domestic demand contribution 1.1 0.5

Overseas demand contribution 0.1 0.4

Notional GDP growth 3.3 2.5

Consumer price increase 3.2 3.1

　Excluding the

Impact of consumption tax

increase1.2 1.1

Unemployment rate 3.5 3.6

%

%

17

Japanese Government Japanese Economic Forecasters

Unit: %

Comparison between the forecast by government and private sector

The impact of the consumption tax increase (2014 April) was larger than expected, so the government forecast of GDP growth was slightly lowered. But overall it is generally agreed

between government and private forecasters that all sectors are showing recovery.


2013.1Q 2013.2Q 2013.3Q 2013.4Q 2014.1Q 2014.2Q 2014.3Q 2014.4Q 2015.1Q 2015.2Q 2015.3Q 2015.4Q 2016.1Q

-6

-5

-4

-3

-2

-1

0

1

2

3

4

5

6

7 5.3

2.9

1.30.3

6.7

▲ 4.9

2.71.7 1.5

1.6

2.7

▲ 2.5

1.6

EstimateActual

The general view is that the consumption decline caused by the consumption tax increase will be revived by around July – September 2014.

国際的に見た日本の対内直接投資の現状Impact of consumer tax increase

18

Estimated quarterly real GDP growth rate by private think tank(quarterly, annual rate, seasonally-adjusted)

Apr. 2014Consumer tax increase to 8%

Oct. 2015Consumer tax

increase to 10%(provisional)

Last-minute demand before consumption

tax increase

Source: Compiled from the data of Japan Center forEconomic Research “ESP Forecast Survey,” July 2014


Macro economic effect generated by elimination of tariffs

国際的に見た日本の対内直接投資の現状Impact of TPP

Macro economic effect of participation in TPP by the Japanese Government

Source: Government Task Force for TPP “Unified calculation of the Government” (published in March 2013)

(Reference) Calculation of economic effects by Pacific Economic Cooperation Council (PECC)

19

Total: 3.2 trillion yen

Consumption: 3.0 trillion yen

Investment: 0.5 trillion yen

Export: 2.6 trillion yen

Import: -2.9 trillion yen

GDP increase of 3.2 trillion yen

GDP decrease of 3.0 trillion yen

GDP increase of approx. 10 trillion yen

(2) Amount of agricultural, forestry and fishery products:

(1) Entire economy:

(PECC: A council consisting of the government, industry and academia of 25 countries, mainly in APEC)

Export ＋ 0.55% ( ＋ 2.6T JPY), Import -0.60% (-2.9T JPY),Consumption ＋ 0.61 ％ ( ＋ 3.0T JPY), Investment ＋ 0.09 ( ＋ 0.5T JPY)(*economic effect over 10-year period)

<Conditions for calculation>　 1. Only considers the effect of customs elimination. Liberalization of service and investment not included. 　　 2. Customs are eliminated immediately.　 3. No additional economic policies included.

<Conditions for calculation>　 1. TPP participants consist of 12 countries as of March 2013, including Japan.　 2. The abolition of non-tariff obstacles and the liberalization of service and investment are included.


国際的に見た日本の対内直接投資の現状GDP Long-Term Forecast

Source: Compiled from the forecast values by Cabinet Office, IMF, Euromonitor International and World Bank

Japan’s real GDP growth rate as estimatedby international organizations (until 2017)

20

Unit: %

2013 2014 2015 2016 20170.0

0.5

1.0

1.5

2.0

2.5

3.0

2.0

1.2 1.1

1.2 1.1

1.5

1.7

1.0 1.0

1.5

1.31.3

1.5

2.6

1.2

1.4

1.81.9

IMF Euromonitor International World Bank Japanese Government


76.0% of companies answered that the Tokyo Games would lead to significant demand in the Japanese economy.

33.4% of companies recognized that the Tokyo Games would have “positive effects” on their business performance.

国際的に見た日本の対内直接投資の現状Impact of Tokyo Olympic Games in 2020

Tokyo Metropolitan Government/The Tokyo Organising Committee of the Olympic and Paralympic Games

3.0

　 Japan Center for Economic Research 2.2

　 Mizuho Research Institute 2.5

　 Dai-ichi Life Research Institute 21.0 　

　 The Mori Memorial Foundation 19.4

Estimated economic effects of Tokyo Olympic Games

Approx. 80% of companies anticipate “significant demand in the Japanese economy”

21

Unit: trillion yen

■Towards the 2020 Tokyo Olympic Games, it is expected that there will be large infrastructure development and that the Abenomics policies will be carried out ahead of schedule, to meet the target of 2020.■Estimated economic effects are 3 trillion to 20 trillion yen.

Source: “Survey on Perceptions of Companies about 2020 Tokyo Olympic 　　　　　　

and Paralympic Games” (Teikoku Databank) 　　　　　 November 2013, number of valid respondents: 10,769

companies


国際的に見た日本の対内直接投資の現状Evaluation of Abenomics

22

■The Econominst

…Mr Abe is back with a proper third arrow. There are two reasons for thinking that this time it will hit the target. First, the country has reached a point at which almost all Japanese realize that reform of some sort is needed. Second, Mr Abe is at last pursuing schemes of such breadth that they touch on nearly every area of the economy that demands change.（ The Economist, Volume 411 Number 8893, Article “The Third Arrow” ）

■The Wall Street Journal

Abenomics has succeeded in injecting some much-needed hope into the Japanese economy, and there are signs that deflation is ending and GDP growth is returning. But without structural changes, the trend is unlikely to be sustainable. Labor market reform may be the biggest big test of Mr. Abe's leadership(The Wall Street Journal 2014.05.08 Article “Making Abenomics Work for Japan” ）

■Dr. Jim Yong Kim (World Bank President )

Abe’s commitment to tackling “rock hard regulations” related to employment, agriculture and healthcare is a “very encouraging sign. And so, we remain optimistic that he will be able to deliver on that third arrow,” Kim said. （ Jiji Press 2014.6.29 Article “World Bank Kim optimistic about Abe’s “3rd arrow””)



23




Japanese Government aims to attract 35 trillion yen in inward FDI by 2020

Drastically strengthening the government’s support framework for attracting foreign companies

JETRO to cooperate with embassies in approaching the executives of foreign

companies, and to strengthen the function of attracting foreign investment.

JETRO to work with relevant ministries to build up a one-stop support

functionality and to create opportunities for tying up foreign and Japanese

companies.

JETRO will also aid local municipalities which are actively inviting foreign

companies to set up establishments.

Inward FDI into JapanJapan Revitalization Strategy (June 2013)国際的に見た日本の対内直接投資の現状 Japan Revitalization Strategy (Revised - June 2014)

Source: Japan Revitalization Plan (Revised 2014) 2014/6/24

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JETRO IBSC is a one-stop center for establishing a business base and starting your business in Japan.

国際的に見た日本の対内直接投資の現状JETRO’s activities to attract foreign direct investment

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JETRO will arrange meetings with the relevant authorities and provide comprehensive support.

Consultation regarding 　 investing in Japan

Consultation regarding investing in Japan and regulatory reform requests from foreign companies

JETRO will submit requests for regulatory reforms to the Cabinet Office and METI.

Requests for regulatory reforms

国際的に見た日本の対内直接投資の現状Invest Japan Hotline


Further Information

□Japan Economic Policies (Abenomics)<Abenomics is progressing - Summarized report on the major achievements of the third arrow of Abenomics>http://japan.kantei.go.jp/ongoingtopics/pdf/2014/140627_abenomics.pdf

<Achievements of Abenomics>http://www.kantei.go.jp/jp/singi/keizaisaisei/pdf/seika02shousaiEN.pdf

<Revision of Japan Revitalization Strategy>http://www.kantei.go.jp/jp/singi/keizaisaisei/pdf/10challenge02shousaiEN.pdf □Outlook of Japan EconomyGovernment Estimates: http://www5.cao.go.jp/keizai1/2014/0124mitoshi-e.pdf

Japan Centre for Economic research: http://www.jcer.or.jp/eng/(ESP Forecast July Survey): http://www.jcer.or.jp/eng/pdf/esp/fcst1407_eng.pdf

□JETRO’s Services“How to set up business in Japan”: http://www.jetro.go.jp/en/invest/setting_up/

“JETRO IBSCs”: http://www.jetro.go.jp/en/invest/ibsc/

http://japan.kantei.go.jp/ongoingtopics/pdf/2014/140627_abenomics.pdf

http://japan.kantei.go.jp/ongoingtopics/pdf/2014/140627_abenomics.pdf

http://www.kantei.go.jp/jp/singi/keizaisaisei/pdf/seika02shousaiEN.pdf

http://www.kantei.go.jp/jp/singi/keizaisaisei/pdf/seika02shousaiEN.pdf

http://www.kantei.go.jp/jp/singi/keizaisaisei/pdf/10challenge02shousaiEN.pdf

http://www.kantei.go.jp/jp/singi/keizaisaisei/pdf/10challenge02shousaiEN.pdf

http://www5.cao.go.jp/keizai1/2014/0124mitoshi-e.pdf



http://www.jcer.or.jp/eng/



http://www.jcer.or.jp/eng/pdf/esp/fcst1407_eng.pdf

http://www.jcer.or.jp/eng/pdf/esp/fcst1407_eng.pdf

http://www.jetro.go.jp/en/invest/setting_up/

http://www.jetro.go.jp/en/invest/ibsc/

http://www.jetro.go.jp/en/invest/ibsc/


▲ 16.0

▲ 11.0

▲ 6.0

▲ 1.0

4.0

9.0

▲ 4.1

▲ 12.6 ▲ 15.0

7.0

0.3

7.06.1

4.26.0

▲ 2.1

▲ 6.9

▲ 3.0

10.8

0.9

4.1

▲ 2.5 ▲ 3.0

0.2

5.3

2.91.3

0.3

6.7

28

Japan’s real GDP growth rate (quarterly, annual rate, seasonally-adjusted)

国際的に見た日本の対内直接投資の現状 <Appendix> Achievements of Abenomics (GDP growth rate)

Source: Cabinet Office “National Accounts of Japan (Quarterly Estimates of GDP),”June 9, 2014

Lehman Brothers bankruptcy(Sep. 2008)

Launch ofAbenomics(Dec. 2012)

Great East Japan earthquake(Mar. 2011)

Last-minute demand before consumption

tax increase

2008 201070

80

90

100

110

120

130

Yen response to monetary easing by Bank of Japan


FX market (against US dollar)

* Note: The exchange rates are the Tokyo interbank central rates 　　 Source: The Bank of Japan “Foreign Exchange Rate”

国際的に見た日本の対内直接投資の現状 <Appendix> Achievements of Abenomics (FX market)

Unit: yen

(Jun. 30, 2014)101.39 yen

Launch of the Abe Administration(Dec. 26, 2012)

85.15yen

Max after year 1985(Oct. 28, 2011) 75.86 yen

2009.1 2011.15,000.00

7,000.00

9,000.00

11,000.00

13,000.00

15,000.00

17,000.00

Complied from NIKKEI Stock Average closing price

48% increase between Dec 2012 and Jun 2014


Stock market (Nikkei Stock Average)

国際的に見た日本の対内直接投資の現状 <Appendix> Achievements of Abenomics (stock market)

Lowest in past 20 years(Oct. 28, 2008)

6,994yen

Final session Q2 2014 (Jun. 30, 2014)

15,162.1yen

Unit: yen

Launch of the Abe Administration(Dec. 26, 2012)

10,230yen


2009 2010 2011 2012 2013 2014

-70

-60

-50

-40

-30

-20

-10

0

10

20

30

大企業 / 製造業大企業 / 非製造業中小企業 / 製造業中小企業 / 非製造業

First time in 22 years that over 50% of both manufacturing and non-manufacturing SMEs expressed positive business sentiment.

31

国際的に見た日本の対内直接投資の現状 <Appendix>Achievements of Abenomics(business conditions)

Source: Compiled from the data in the Bank of Japan “National Short-Term Economic Survey of Enterprises in Japan” known as Tankan 　 (current situation diffusion index [DI])

Launch of Abenomics(Dec. 2012)

Business conditions of companiesUnit: “Good” or “bad” % points

Large companies (manufacturers)

Large companies (non-manufacturers)

SMEs (manufacturers)

SMEs(non-manufacturers)

Consumption tax increase

（ April 2014 ）


Unemployment rate declined and jobs-to-applicants ratio surpassed 1.0

32

国際的に見た日本の対内直接投資の現状 <Appendix> Achievements of Abenomics (employment)

Unemployment rate and jobs-to-applicants ratio

Source: Ministry of Internal Affairs and Communications “Labor Force Survey” 　 Ministry of Health, Labor and Welfare “General Job Placements”

Unit: % Unit: ratio

2009 2010 2011 2012 2013.1Q 2013.2Q 2013.3Q 2013.4Q 2014.1Q 2014.2Q0

1

2

3

4

5

6

0

0.2

0.4

0.6

0.8

1

1.2

Unemployment rate Jobs-to-applicants ratio

1990 1995 2000 2005 2010 2013

-2

-1

0

1

2

3

4

On the path toward ending deflation


Consumer Price Index (on the previous year )

Source: Ministry of Internal Affairs and Communications “Consumer Price Index”

国際的に見た日本の対内直接投資の現状 <Appendix> Achievements of Abenomics (consumer prices)

Steep rise in global oil and grain prices

Increase in consumption tax from 3% to 5%

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