what happens to the price lists and why Tokyo is back strong – Corriere.it

The latest closing up of the Nikkei index (+0.77% at 30,808.35 points), pushes the Tokyo Stock Exchange at its highest level since August 1990, the culmination of the bubble was more than 30 years ago. Even the Topix index, which had already reached its highest since August 1990 in recent days, continued to rise up to 2,171.37 points, to close at 2,162 points (+0.18%). Here, all stock indexes and stock market quotes in real time.

When the bubble burst, Japan plunged into deflation and economic stagnation that lasted for over three decades. During which the gigantic financial maneuvers, from the frenzied public works policy (including the innumerable dams, sometimes useful only to block the way for the salmon to return upriver, as happened, for example, on the island of Hokkaido) were of little or no use. to the vouchers distributed free of charge (but ended up unused in the drawers) to get Japanese families to spend and relaunch the growth of the economy with the awakening of consumption. Up to the massive program of Quantitative Easing of the Bank of Japan, started ten years ago by then Governor Haruiko Kuroda, replaced in April by Kazuo Ueda, and still ongoing.

The return of global inflation, after the pandemic and an ongoing war in the heart of Europe, with disruptions in supply chains and the rise in raw materials, has pushed prices also rose in Japan, where the index in April marked an increase of 3.5%, after reaching a peak of 4.3% last January, while the gross domestic product in the first quarter of this year grew by 0.4%, with private consumption up by 0.6% (compared to +0.2% in the fourth quarter). All in all, it is a good start, despite the global slowdown, after the Japanese economy grew by 1.1% in 2022 and 2.1% in 2021.

It contributes to the optimism on the markets the conviction of investors on a possible agreement on the American debt ceiling, which could allow the United States to avoid a catastrophic default. Before leaving for the G7, the president of the United States, Joe Biden, said he was confident that America will not default and assured that discussions will continue until an agreement is reached and that during the trip to Japan he will stay in contact with the negotiators. Even the Speaker of the House, Republican Kevin McCarthy, said he was encouraged by President Biden’s willingness to negotiate. Now he has finally admitted that we intend to negotiate and that we have a structure to do it, the problem is that the time frame is very short, he said.

Confidence in Japan also comes from prospects for new investments in future technologies following the tensions between China and Taiwan. For example, three of the world’s major chip manufacturers are aiming for Tokyo, relaunching the Rising Sun as an avant-garde technological hub.

The American group Micron Tech has estimated new investments of up to 500 billion yen, approximately 3.7 billion dollars, including $320 million in government subsidies, so it can produce advanced memory chips at its Hiroshima plant, where it will build its new dynamic random access memory (DRAM) chips. The announcement by the American company, which plans to cut global investments by 30% at the same time, follows the visit to Japan of the vice president of the United States, Kamala Harris, and the latest example of the growing cooperation between Tokyo and Washington in the production of chip, in a context of growing tension and technological rivalry with China.

Samsung will build a plant, including its first chip packaging test line in Japan, near its current R&D center in Yokohama, boosted by about 15 billion yen (about $110 million) in government aid. Overall, the investments will amount to 40 billion yen, almost a third provided by the government led by Fumio Kishida.

Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest chip maker, also plans to build a second chip plant in Japan to produce 5 and 10 nanometer chips starting from the second half of the decade, according to the Nikkan Kogyo newspaper precisely on the days when the country is hosting the G7. TSMC is building its first foundry in Japan on the island of Kyushu, with production of 12- and 16-nanometer semiconductors expected to begin next year. The Japanese government has offered the Taiwanese group a grant of 476 billion yen, equal to about half of the estimated cost of the factory. Investors also include Sony Group and auto parts maker Denso Corp, which will use the chips produced.

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