JAPAN’S ECONOMY TO GAIN TRACTION IN 2022
The Asian economic powerhouse is poised for a resurgence in the coming year led by its most dynamic companies.
Like most countries, Japan struggled to find its economic footing in 2021, as it continued to deal with pandemic-related restrictions and prevailing supply chain disruptions around the world.
Despite the challenges brought on by the Covid-19 pandemic, the world’s third-biggest economy is poised to recover, supported by the 56 trillion yen (US$493 billion) economic stimulus unveiled by newly-elected Japanese Prime Minister Fumio Kishida in November. The package will offer cash handouts to families with children under 18, support small businesses and implement measures to offset rising fuel prices. The country’s largest spending reflects the government’s resolve to boost growth and redistribute wealth to households.
“Growth is on course to regain momentum, supported by macroeconomic policies and progress in vaccination,” the Organisation of Economic Cooperation and Development said in a report in December. “Significant progress in vaccination and falling rates of infection are now supporting the resumption of stronger consumption growth and lifting investment, as supply chain disruptions are resolved. A new economic policy package will boost activity.”
While the Japanese economy is expected to accelerate its expansion in fiscal 2022 to 3.4%, corporate leaders must remain vigilant amid the lingering impact of Covid-19. The nation’s corporate CEOs will have to remain steadfast and be prepared for the unexpected, Yuzaburo Mogi, Chairman and Honorary CEO of Kikkoman Corporation, says. CEOs need to be forward-looking and be able to anticipate what lies ahead and act decisively, he adds.
Guided by this philosophy, Mogi has spearheaded Kikkoman’s overseas expansion since the 1970s. Today, the company’s main soy sauce product is enjoyed in over 100 countries, with around 75% of the group’s profits coming from its international business.
As supply chains normalize, Japanese firms are also looking to tap the growing demand for electronics devices and components. One company that’s emerging stronger from the pandemic-induced slump is THK Co., Ltd.—a supplier of industrial machinery, robotics and automation solutions.
THK is benefitting from robust electronics demand driven by advances in automation and robotics, and a boom in the automotive industry as the switch towards electric vehicles gains pace. The firm aims to leverage digital technologies, such as artificial intelligence, Internet of Things and robotics, to boost the efficiency of its manufacturing processes over the next three years.
Japan’s economic resurgence in the coming years will be underpinned by its inherent strengths and the resilience and innovation of its dynamic companies. The long-term outlook for the Land of the Rising Sun is looking brighter than ever.