"Digital Deficit": IT Giants Influencing Japan's Economy

May 11, 2024 | News On Japan

TOKYO - Payments for digital services provided by overseas IT giants have emerged as a new factor contributing to the yen's decline, reports economic journalist Ideguchi.

The hidden cause of the yen's persistent weakness, beyond what can be addressed by currency intervention or changes in monetary policy, is the "digital deficit."

The digital deficit refers to the shortfall incurred by Japanese companies and individuals from using digital services provided by international IT giants like GAFA (Google, Apple, Facebook, Amazon). This deficit has continued to grow, reaching 5.4 trillion yen last fiscal year.

While Japan has been advancing in digitalization, the majority of the services used originate from companies like GAFA, leading to a significant outflow of Japanese money overseas.

Moreover, this digital deficit could further accelerate the depreciation of the yen. This is because paying these overseas companies involves selling yen to purchase dollars.

Last week, the yen hit a 34-year low at 160 yen to the dollar. As long as Japan remains dependent on foreign digital services, it appears locked in a structure from which it cannot escape.

Developing Japanese digital services that can compete with GAFA is a significant challenge in preventing the outflow of funds.

Source: TBS

Takaichi Gets 5 Hours Sleep for 'First Time in a While'

Prime Minister Sanae Takaichi has drawn criticism over a social media post describing five hours of sleep as a rare luxury, as the extended Diet session prepares to begin Upper House debate on a controversial bill to establish secondary capitals outside Tokyo.

Japan Introduces Stricter Penalties for Drunk Driving

Japan began applying a new numerical alcohol threshold for dangerous driving offenses on July 21, introducing a clearer standard for cases involving impaired driving that could lead to fatal accidents.

Mount Fuji Filmed From a Helicopter

Breathtaking 4K footage filmed from a helicopter offers a sweeping aerial view of Mount Fuji and its majestic surrounding landscape.

Japan Scrambles for Oil

A covert network of shuttle tankers is carrying crude through the increasingly dangerous Strait of Hormuz as renewed fighting between the United States and Iran disrupts shipping and raises concerns over how Japan will secure the oil it needs.

Russia Calls Japan-Ukraine Drone Cooperation a Clear Hostile Act

Russian Deputy Foreign Minister Andrey Rudenko has criticized moves by Japanese and Ukrainian companies to cooperate on drone technology, warning that such ties would be regarded by Moscow as a "clear hostile act."

MEDIA CHANNELS

MORE Business NEWS

Yen Slides on Escalating Middle East Fears

The yen weakened beyond 163 to the dollar as fears of a further deterioration in the Middle East fueled safe-haven demand for the U.S. currency, pushing Japan's currency to its lowest level in about 39 and a half years.

Nikkei Rebounds as Bargain Hunters Return to AI Shares

Tokyo stocks rebounded sharply on July 21 as investors bought back semiconductor and artificial intelligence-related shares after last week’s steep selloff, while attention shifted to upcoming U.S. technology earnings and the government’s new economic policy roadmap.

Oil Surge Tests Tokyo Markets on Marine Day Holiday

Japanese cash equities were closed for Marine Day on July 20, leaving investors to assess whether Tokyo can stabilize after last week’s technology-led rout as oil prices rose above $90 a barrel, the yen remained near four-decade lows and global markets braced for another test of the artificial intelligence trade.

Apple Hikes iPhone Prices in Japan

Apple has raised prices for iPhones sold in Japan, with the top-end iPhone 17 Pro Max now costing more than 210,000 yen, as the prolonged weakness of the yen increases the local cost of products priced and managed in US dollars.

Mexican Crude Oil Arrives in Japan After 70-Day Voyage

A tanker carrying about 1 million barrels of Mexican crude oil arrived off Yokkaichi, Mie Prefecture, on the morning of July 17, marking Japan's first such delivery since the Strait of Hormuz was effectively closed.

Nikkei Enters Correction as Chip Rout Deepens

Tokyo stocks plunged on July 17 as a global selloff in semiconductor and artificial intelligence-related shares pushed the Nikkei 225 into correction territory, while Middle East tensions, higher oil prices and persistent yen weakness added to pressure on investors.

Nissan Unveils First New Elgrand in 16 Years

Nissan Motor unveiled a fully redesigned Elgrand minivan on July 17, marking the model's first complete overhaul in 16 years, while introducing a new brand message as the automaker seeks to rebuild its business and revive sales.

Japan 7/11 Plans Major Polish Takeover

Seven & i Holdings is considering investing several hundred billion yen in Zabka Group, Poland's largest convenience store operator, as the Japanese retailer seeks to expand its presence in Europe.

< 2 3 4 5 >