Canada Wood Today | The Canada Wood Group

Japan Economy, Housing and Lumber Shipments

Shawn Lawlor

By Shawn Lawlor

Director, Canada Wood Japan

May 20, 2016

Japan Economic Update

Picture11The Japanese yen surged unexpectedly in April moving from 112yen to 106yen to the US dollar within a month to its strongest level in 18 months. Economic analysts are raising concerns that the strengthening yen is a sign that Abenomics and the Bank of Japan’s monetary shock therapy are backfiring.  While the Bank of Japan introduced negative interest rates in January, the yen has spiked and Bank of Japan Governor is feared to be running out of tools to stoke inflation. The BOJ appears no closer to achieving annualized 2% inflation and a virtuous cycle of rising prices, wages and asset values. Indeed, wage increases for 2015 averaged a scant 0.44% with prospects for this year’s annual wage increases between the major unions and manufacturers not much better.

Meanwhile, Prime Minister Shinzo Abe has hosted a series of meetings with esteemed international economists to hear their views on whether or not Japan should follow through with plans to raise the consumption tax from 8% to 10% in April 2017. Debate on delaying the implementation of the proposed taxes is growing louder and many housing industry analysts are now expecting the tax to be delayed until Japan’s economic recovery is on more solid footing. However, institutions such as the IMF and OECD are encouraging Japan to raise it as planned to deal with the spiraling national debt which is expected to reach 249% of GDP this year.

Japan Housing Starts Summary 

Japanese Monthly Housing Starts Summary for March 2016

japan1March total housing starts posted an 8.4% increase to 75,744 units. Owner occupied single family starts were up 4.3%, with rental housing trailing with a 1.1% increase. After several consecutive months of double digit declines, the mansion condominium market roared back to life with a 26% increase.

Total wooden housing increased 7.6% to 41,154 units. Post and beam starts gained 8.3% to 30,576 units. Wooden pre-fab starts declined 4.8% to 1,025 units. Platform frame starts increased 6.9% to 9,553 units; with custom ordered single family homes down 1.6% to 2,349 units, rentals up 9.3% to 5,892 units and built for sale 2×4 spec housing declining 7.9% to 1,064 units.

B.C. Softwood Exports to Japan

10400233As of the end of March, total year to date BC softwood lumber shipments declined 6.4% to 477,002m3. Year to date total export value fell 4.8% to $170.4 million. By species, SPF shipments declined 3.1% to 329,788m3; Hem Fir Shipments increased 2.8% to 72,446m3; Douglas Fir shipments fell 21.8% to 48,157m3 and Yellow Cedar shipments fell 30.5% to 17,094m3.