Labour shortages are forcing firms to automate, giving Japan a significant and important edge in robotics. Production of industrial robots has surged: ‘intelligent’ robots have seen a particularly marked increase over the past three years, more than doubling in number.
Innovation and a shift towards niche industries will also allow Japan to remain competitive in the face of a stronger yen, a point underlined by the recent trade numbers for February. The trade surplus is widening again: the 12-month moving total was the highest since March 2011. Machinery exports have rebounded swiftly over the past year. Japanese chemical company Asahi Kasei has just announced it will increase its output of separators used in lithium-ion batteries by 30%, after strong orders from Tesla.
A strong yen need not be negative for equities. The overseas production ratio remains high. The current account deficit in services has narrowed sharply too. Non-manufacturing firms are driving the rise in profits and employment. This morning’s Shoko Chukin Bank business survey for SMEs underlines the strength of the recovery.
Summary
- Industrial production of robots has surged, with Japan leading on ‘intelligent’ robots
- Exports rebound in February
- Overseas subsidiary sales remain strong too, mitigating any rise in the yen
