Japan Economy, Housing & Lumber Shipments
On April 4th newly minted Bank of Japan Kuroda announced sweeping new changes to expand the scale and scope of monetary easing measures. The quantitative easing measures are projected to nearly double Japan’s monetary base to 270 trillion yen by the end of 2014 in view of achieving a 2% annual inflation target. The BOJ measures resulted in a further weakening in the Japanese yen towards near par to the US dollar and a rally in the Nikkei stock exchange.
The implementation of shock therapy quantitative easing and the passing of LDP supplementary fiscal spending now mean that two of the three key pillars or “arrows” of the Abenomics economic recovery plan are now well underway. Japan’s attention is now shifting towards the third arrow: improving Japan’s international competitiveness through deregulation and liberalized trade.
While details of Prime Minister Abe’s plan to deregulate Japan’s economy will not be known until later this summer, certain key initiatives are beginning to emerge. This past April, Japan was formally admitted into the TPP negotiations – an initiative regarded by key industry leaders in Japan as essential to reinvigorating productivity and trade. Proposals on deregulating Japan’s economy are also beginning to emerge from key academics, bureaucrats and industry representatives tasked by the Abe government to develop concrete measures to enhance Japan’s productivity. These include establishing six geographical areas in Japan’s key industrial centers as incubator zones for deregulation. Other proposals include deregulation of Japan’s daycare centers as well as online non-prescription drug sales. With deeply entrenched vested interests, it remains to be seen; however, whether the Abe government can walk the walk.
Housing Starts Summary
February total housing starts increased 3.0% to 68,969 units. Non wood starts edged up 0.5% to 35,727 units. In contrast, the high rise condominium market advanced 15.9%. Recently, real estate analysts point to increased investment activity in the high rise condominium and commercial real estate markets as foreign trusts ramp up their investments into Japan, buoyed by the weakening yen and a recovering real estate market.
February results among housing types varied significantly. Post and beam starts eased 1.3% to 27,196 units, however, average floor area increased 2.7%. Wooden pre-fab dropped 3.4%, but total pre-fab increased 2.3%. Platform frame starts posted another strong month with an 8.5% increase to 7,296 units. Owner occupied single family 2×4 advanced 6.1% to 2,311 units; rentals jumped 14.6% to 3,816 units and built for sale homes declined 4.5% to finish at 1,158 units.
Japan SPF Exports Update
In January and February 2013 SPF exports to Japan increased 12% to 126.6 million fbm. February SPF Shipments totaled 64.1MMFBM compared to 57.2MMFBM a year prior. At the end of February, the value of SPF exports to Japan increased 23% to CAD $69.4 million.