Japan to consider an overall policy on accepting foreign workers - Rabobank

Michael Every, Head of Financial Markets Reseach at Rabobank, notes that Bloomberg reports it has seen the Japanese government’s new draft stimulus plan.

Key Quotes

“It apparently still aims for a FY2020 primary budget surplus, and thus walks in the opposite direction to any thoughts of ‘helicopter money’; that suggests USD/JPY has further upside and equities further downside. There are also no details of the size of the economic stimulus that will be injected.

Radically, however, it says Japan will “consider an overall policy on accepting foreign workers”. That’s a huge economic and cultural shift; yet it’s ironic that Japan might be embracing free(er) movement of labour just as the UK (and US?) is trying to limit it. Indeed, while immigration might boost consumption, and potentially even reverse Japan’s demographic decline if large enough, would it help to increase real wages, which are the real problem? Evidence from elsewhere suggests only if those invited to work in Japan are at the top-end of the income scale – and if so, into which industries?”