Japan Remains Reptilian
It’s a great metaphor, and we can thank a Morgan Stanley economist Osamu Tanaka for adding such poetry to the dismal science:
[W]e do not think any full-fledged rebound in personal consumption [in Japan] can be expected, because corporations continue to restrain personnel spending and households’ need to restore depleted savings both will weigh heavily on consumption. In this environment, manufacturing and capex activity cannot escape from their dependence on external demand — [Japan’s] economy will remain quintessentially “reptilian,” needing the warming sunlight of external demand to maintain its temperature and activity, and therefore subject to the vagaries of global cycles.
What I wonder is where the US economy’s “warming sunlight” will come from later this year…
p.s. note that this reading agrees with the skepticism many commenters expressed last week about the strength of Japan’s recovery.