Capital Ideas

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It’s tough to grow when consumers don’t spend

Japanese Consumer Spending Has Been Flat for 20 Years


The Japanese government introduced a new fiscal stimulus plan in early August in hopes of spurring economic growth. This plan was Japan’s 20th round of fiscal stimulus in the last two decades — yet economic growth has remained stagnant. One of the main reasons is low consumer confidence and spending, which has been essentially flat for the past 20 years at just below ¥300 trillion. Contrast that to U.S. consumer spending and it’s easy to see why the Japanese economy has struggled to expand. Nevertheless, some companies have large market share in the Japanese consumer market and continue to grow that share, providing select opportunities to active investors.

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