Forbes

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.

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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.

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