Organizers claimed that nearly 2 million Hong Kong protesters took to the streets Sunday in a rally to demand the city's top official resign a day after she suspended — but...China Politicsread more
African swine fever, which has already ravaged pig herds in China and pushed up food prices there, could also drive up inflation in the other emerging markets, according to...Asia Economyread more
Consumer goods giant Unilever has taken the unusual step of having some of its marketing staff read their own DNA profiles to see whether finding out about their heritage has...Marketing.Media.Moneyread more
Stocks in Asia traded mixed on Monday as investors await a U.S. Federal Reserve meeting set to happen later in the week stateside.Asia Marketsread more
In the survey, 66% of Democratic primary voters say they'd be enthusiastic or comfortable about Biden as their nominee to take on President Trump in the 2020 election. Just...Politicsread more
Heavy rains caused unprecedented delays in planting this year and contributed to record floods across the central United States.Agricultureread more
Target's registers were down on Saturday for several hours preventing customers from checking out.Retailread more
Although Cook did not mention companies by name, his commencement speech in Silicon Valley's backyard mentioned data breaches, privacy violations, and even made reference to...Technologyread more
U.S. ambassador to Israel David Friedman called the gesture a "birthday present" to Trump, who turned 73 on Friday.Politicsread more
The outlook for Germany's economy and political stability are more uncertain than ever, writes Michael Ivanovitch.World Economyread more
The agreement, which is on the framework for the plan of adjustment, provide for more than a 60% average haircut for all $35 billion, a 36% haircut on pre-2012 general...Bondsread more
Rising prices are forcing Japanese pensioners to reduce spending, undercutting Prime Minister Shinzo Abe's plan to boost economic growth and pay down the hefty public debt burden in one of the world's fastest aging nations.
"There is no solution to the structural problem: the government is running a huge budget deficit, but the only way to coax the elderly into spending more is by increasing public spending on them," said Dai-ichi Life Research Institute (DLRI) chief economist Hideo Kumano.
Japan limped out of a technical recession in the fourth quarter of 2014, but consumers are still struggling. A 3-percentage-point tax hike to 8 percent last April continues to weigh on consumption, while higher import prices have exacerbated the situation due to the yen's over 40 percent decline against the U.S. dollar since Abe's return to power.
In January, Japanese household spending fell 5.1 percent on month – its 10th consecutive decline, marking the longest losing streak since the global financial crisis. Meanwhile retail sales fell 2.0 percent – their first decline in 7 months.
The elderly are reducing spending the most.
"The average Japanese is suffering because of a weaker yen," said Keio Business School associate professor Seki Obata, but "pensioners are suffering the most from the rising prices because there is no prospects of their incomes rising."
No work, no spend
Whether a pensioner can afford to spend or has to cut back depends on their ability or willingness to work, according to according to DLRI's Kumano figures, citing government data.
The 37.8 percent of households with no income from paid work cut back spending by 1.5 percent in 2014 – and nearly all (95 percent) of these households are over 60 years old, according to DLRI's Kumano.
By contrast, the over-60 year olds that do have some income from work are happily parting with their money. Business owners, for example, spent 6.9 percent more on-year in 2014, while non-business owners with paid work increased spending by 1.8 percent.
One out of two Japanese men between 65 and 69 are in paid work, and a quarter of those over 70 do too. Around half of them are self-employed, according to government data.
More spend, more taxes
Still, they won't be able to work forever and Japan's population is set to age at a fiscally alarming pace.
Currently around a quarter of Japanese are over 65; by 2033, the proportion is set to rise to over 30 percent, according to government estimates.
That leaves the government in a bind, analysts say.
Raising taxes to care for the elderly depresses consumer spending and economic growth – but not raising taxes will only increase Japan's debt load, which at 231.9 percent of gross domestic product is among the highest in the world.
The April consumption tax hike was supposed to help pay for the rising social security costs of caring for the elderly, but it may not be enough. Yet economists warn that pushing ahead with a second hike in April 2017 – delayed from October 2015 as the first tax hike wreaked havoc on the economy – will only tip Japan back into recession.
Given how fragile the economic recovery is, "I don't think (Prime Minister) Abe will be able to raise the consumption tax," said Keio Business School's Obata. "What remains to be seen is whether he will concede he won't be able to reduce the budget deficit either."