Japan
Wood Products Prices
Dollar Exchange Rates of 15th
Mar
2025
Japan Yen 148.64
Reports From Japan
Pace of wage growth yet to
keep up with inflation
Many major Japanese companies have agreed to meet the
wage demands of labour unions which have long been
calling for substantial increases to address surging
consumer prices.
The government has been monitoring the annual wage
negotiations to see if the strong push for salary increases
will extend to small and medium-sized companies which
employ around 70% of the country's workforce. Wage
talks for small and mid-size companies are ongoing and it
remains to be seen whether the trend of wage increases by
major firms will spread to smaller firms.
Wages remained flat in Japan for decades following the
bursting of the asset-inflated bubble economy in the early
1990s and ensuing deflation. But in response to inflation
the spring wage talks in 2023 saw the highest pay
increases in 30 years. Nevertheless, the pace of pay growth
has yet to keep up with persistent inflation, with real
wages falling year-on-year for the third consecutive year
in 2024.
Many large corporations have the resources to boost
wages, supported by strong earnings for the current fiscal
year. The combined net profits of major companies are
expected to reach yen 52.65 trillion for fiscal 2024
marking a record for the fourth straight year according to
data from SMBC Nikko Securities Inc.
See: https://japantoday.com/category/business/japan-major-
firms-offer-large-pay-hikes-amid-inflation-labor-crunch
Only non-manufacturing sector held up business
sentiment index
The most recent business sentiment index (BSI) among
Japan's large enterprises across all industries stood at plus
2.0, marking the fourth consecutive quarter of positive
sentiment according to data from Japan's Cabinet Office
and Ministry of Finance. The increase was driven by the
non-manufacturing sector which benefited from improved
cost recovery.
The BSI for the non-manufacturing sector remained
positive for the 10th straight quarter at plus 4.1 supported
by rising customer numbers in the service industry and
increased demand for software development and
advertising revenue in the information and
communications sector.
The manufacturing sector, however, saw a decline with its
BSI at minus 2.4, the first negative figure in three quarters.
Rising raw material costs and increased consumer cost-
consciousness contributed to a sharp drop in the food
manufacturing industry. Capital investment across all
industries, including large and small businesses, is
projected to rise 5.9% in fiscal 2025 with manufacturing
leading the growth.
See:
https://english.news.cn/20250313/7571107a2ad74a9a88eedd392f
1ec52c/c.html
Japan to face US tariffs
The Minister of Trade recently visited the US to try and
convince the new administration to exempt Japan from the
US tariff campaign. The Minister commented "we
explained Japan’s position on the impact on local
industries and with regards to the development of the
business environment,d expansion of investment and
employment in both Japan and the US.”
See:
https://www.japantimes.co.jp/business/2025/03/11/economy/japa
n-trade-minister-us-tariff-exemption
Consumer confidence index continues down
The Cabinet Office reported the seasonally adjusted
Consumer Confidence Index was 35.0 in February which
was below last month's 35.2 and missed expectations. The
income growth indicator was down to 39.7 while the
overall livelihood index lost 0.3 points to 31.9 but the
employment index increased month on month to 41.1.
The index on “willingness to buy durable goods” stood at
27.2, decreasing by 0.3 points from January. The percent
of respondents who expect prices to increase over the next
year was 93%, unchanged from the previous month.
Uncertain US economic outlook to impact yen/dollar
rate
The yen briefly reached 147 against the dollar in early
March, the strongest level since early October last year
boosted by yen buying and dollar selling in anticipation of
the Bank of Japan (BoJ) raising interest rates again but
analysts expect the Japanese currency to eventually
weaken in light of the uncertain US economic outlook.
The latest yen rally was sparked by comments from the
US President that countries such as Japan and China were
holding down their currencies to support export
competiveness.
The BoJ is unwinding the monetary easing policy in place
between 2013-2023 to break Japan free from decades of
deflation. During this time the BoJ deployed a massive
asset-buying programme in 2013 and then negative
interest rates in 2016.
See: https://asia.nikkei.com/Business/Markets/Currencies/Yen-
selling-pressure-persists-despite-Trump-warning-
shot?utm_campaign=GL_JP_update&utm_medium=email&utm
_source=NA_newsletter&utm_content=article_link
New home prices trend higher
The average price of new houses in Tokyo increased 2.4%
month on month in February to a record yen 78.59 million
(US$534,000) driven by demand for homes within an easy
commute to the heart of the city.
However, a recent survey found prices for new
condominiums in Tokyo fell in 2024 after a substantial
increase in 2023. According to the Real Estate Economic
Institute the average price of a new apartment in the
Japanese capital and surrounding areas slipped 3.5% to
yen 78 million (US$498,000), the first drop in six years.
See:
https://www.japantimes.co.jp/business/2025/01/23/economy/toky
o-apartment-prices-drop/
Import update
Assembled wooden flooring imports
The main category of assembled flooring imports in
December was HS441875, accounting for 59% of the total
value of assembled flooring imports compared to the 69%
share reported in November. Of HS441875 imports, 68%
was provided by shippers in China and 19% by shippers in
Vietnam. The three other sources of assembled flooring
(HS441875) in December were Thailand and Italy.
The second largest category in terms of value in December
was HS441873 all of which was shipped from China. In
December HS441873 accounted for 21% of all HS441873
arrivals. The third largest category in value terms was
HS441879 (17%).
After surging in November the value of imports of
assembled wooden flooring (HS441871-79) in December
dropped 20% compared to November and dropped 10%
compared to December 2023.
Plywood imports
December was a quiet month for arrivals of plywood
(HS441210-39). Malaysia and Indonesia were, as usual,
the top suppliers but in December arrivals from Malaysia
were down and arrivals from Indonesia were at around the
same volume as in November. Month on month, arrivals
from China were down while arrivals from Vietnam rose.
The volume of December plywood imports (441210-39)
was 118.9 cu.m (124,90 cu.m in November).
Malaysia and Indonesia held a significant share of Japan’s
plywood imports and in December 2024 accounted for
over 75% of the total volume of plywood imports. The
other two major suppliers of plywood to Japan in
December 2024 were Vietnam and China. Arrivals from
Vietnam in December totalled 19,163 cu.m up from the
16,075 cu.m, in November. Arrivals of plywood from
China in December totalled 8,117 cu.m down from the
9,077 cu.m. in November.
As in previous months, of the various categories of
plywood imported in December, HS441231 was the
largest (85% of total imports) followed by HS441233
(3%). Malaysia and Indonesia accounted for most of the
HS441231 arrivals in December.
Small volumes of HS441239 arrived in Japan during
December from a wide range of suppliers including
Sweden, Finland, Chile, the Philippines, Taiwan P.o.C and
New Zealand.
Trade news from the Japan Lumber Reports (JLR)
The Japan Lumber Reports (JLR), a subscription trade
journal published every two weeks in English, is
generously allowing the ITTO Tropical Timber Market
Report to reproduce news on the Japanese market
precisely as it appears in the JLR.
For the JLR report please see:
https://jfpj.jp/japan_lumber_reports/
North American logs
The movement of North American logs is not lively due to
low demand. However, the orders this year are better than
last year. Since there had been a heavy snow in February,
2025, the schedule for processing lumber would be
delayed. The price of small sized Douglas fir lumber is a
little bit high because a Douglas fir lumber manufacturer
stopped changing the price.
Moreover, the price of KD cypress lumber started to rise
due to a shortage of cypress logs. The price of European
timber is also high. Douglas fir lumber manufacturers in
Japan would raise the price because the yen is weak and
the price of logs in North America is high. Precutting
plants were very careful to purchase logs because they
watch order incoming for new fiscal year.
South Sea logs and products
Movement of South Sea and Chinese lumber has been
sluggish. There are not a lot of inquiries because it is
almost the end of the fiscal year and constructions for
houses and shopping malls are going on. Some companies
purchase a small amount of lumber for decks for the new
business year in April.
It is difficult to say the market is lively. The companies are
very careful to purchase laminated boards even though the
distribution stock is in a shortage because they are not sure
how demand changes in the future. Economy in China is
bad and so as the sales of lumber. Additionally, demand in
Japan is low so Chinese sellers keep the price in level.
Demand and supply for South Sea log has been balanced.
There are enough South Sea logs for lumber and plywood
manufacturers. Demand for blocks for steel and
shipbuilding manufacturers is firm.
In South Asia, the log price has been high and the weather
is stable so it is able to cut down the trees smoothly.
Plywood supply in 2024. Total plywood supply in 2024
was 4,617,000 cbms, 2. 3 % more than 2023. Domestic
plywood falls slightly and imported plywood recovers
slightly from the previous year.
Total plywood supply in 2023 was 4,514,000 cbms so the
result in 2024 rises by 100,000 cbms. However, the results
in 2023 and 2024 are under 5,000,000 units. The result in
2020 was 5,213,000 cbms even though there had been an
influence of the COVID-19.
The new housing starts in 2024 were 792,000 units, 3.4 %
less than 2023 and total floor areas are 5.2 % less than the
previous year. One of the reasons for a decrease is that
one-story house was popular than two-story house. Then,
domestic plywood manufacturers kept controlling
production.
Production of domestic structural softwood plywood is 0.1
% up and shipment is 0.7 % down from last year. The
average shipment in per month at the first half of 2024 is
178,000 cbms and at the second half of 2024 is 194,000
cbms.
The price of 12 mm 3 x 6 structural softwood plywood
kept falling. It was 1,450 yen, delivered per sheet at the
beginning of the year and it declined to around 950 yen,
delivered per sheet, in December, 2024. Distributors and
other manufacturers requested the domestic plywood
manufacturers to lower the price.
The bearish market influenced clients to prefer spot
purchasing. As a result, the movement became sluggish.
However, the inquiries for plywood started to increase
since last autumn and shipment exceeded production
during October to December, 2024. The inventory
declined and the plywood price reached the bottom.
Imported plywood is 2,000,000 cbms, 6.2 % more than
2023. Indonesian and Malaysian plywood increase from
last year. In 2023, inventory in Japan was saturated and it
had to be controlled. Japanese buyers could not purchase a
lot of imported plywood due to sudden changes in
exchange rates.
Trading companies, wholesalers and Japanese importers
were still careful to purchase a certain amount of imported
plywood in 2024. The market condition in Japan was not
lively and the yen was over 160 yen against the US dollar.
There is an increase in Vietnamese plywood. The volume
was the highest ever.
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