View Full Version : Japan Economy & Business 日本経済とビジネス
April 4th, 2004, 10:26 PM
Japan growth 'may reach 3 p.c.'
TOKYO, Japan (Reuters) -- Japan's economy will probably have grown more strongly than government forecasts in the business year that ended in March, Economics and Financial Services Minister Heizo Takenaka said on Sunday.
But he reiterated authorities will continue to intervene to prevent undesirable sudden moves in foreign exchange rates if they threaten to derail the economic rebound.
"The government's scenario calls for about 2 percent growth in the year," Takenaka said on TV Asahi's Sunday Project discussion program.
"But it will clearly exceed that."
When asked if growth could reach 3 percent, he said this was "possible."
In the previous fiscal year, which ended in March 2003, the economy grew 1.6 percent.
Japan's economy is showing real signs of a recovery from a decade of slowness, helped by strong exports to fast-growing neighbor China that are boosting business investment and company profits.
The economy grew at its fastest rate in 13 years in the last three months of 2003, and the momentum has carried on into the current year, spreading beyond exporters to smaller companies and consumer spending, the largest part of the economy.
The Bank of Japan's closely watched "tankan" corporate sentiment survey last week showed more companies felt better about business conditions than at any time in the last seven years.
"Companies' cash is not just going to repaying debts, but is going to investment," Takenaka said.
"And it is going into wages, which should boost spending."
He added that banks were making progress in cleaning up bank loans and returning to health, and noted that foreign investors' appetite for Japanese stocks was proof of the recovery.
"Foreign investors are starting to judge the trend (in the recovery) to be firm, not a one-off," he said.
However Takenaka reiterated that the yen's strength remained a concern, and repeated the government's view that instability in foreign exchange markets was not desirable.
"Exchange rates are determined by the markets," he said. "We will continue to intervene to prevent sudden movements when there is a danger of that."
The Japanese currency reached around ¥103.50 to the U.S. dollar last week, its highest in four years.
But the dollar recovered to around ¥104.50 on Friday after a bigger-than-expected jump in March U.S. non-farm payrolls data raised optimism over U.S. economic growth.
Japan's controversial foreign exchange intervention totalled more than ¥15 trillion ($144.6 billion) in just the first three months of this year, compared with a record ¥20 trillion in all of 2003.
Takenaka said that some strength in the yen was unavoidable because foreign investors were buying Japanese assets, increasing demand for the yen.
"The issue though is not allowing exchange rate changes to be too sudden," he said.
April 8th, 2004, 08:24 AM
Japan Showing Signs That Recovery May Last
By TODD ZAUN
Published: April 8, 2004
TOKYO, April 7 - A string of upbeat economic indicators is powering a rally in Japanese stocks, making Tokyo one of the best-performing major markets this year. And this time, there are glints that the forces driving the upswing are here to stay.
A fledgling recovery in domestic demand, some early signs of a more vibrant real estate market and healthier banks are erasing doubts about the fundamental strength of the economy. At the same time, the prospects for robust corporate earnings are good, as big manufacturers ride a wave of strong exports.
In a sign of the growing confidence in Japan's recovery, Moody's Investors Service raised its credit rating Wednesday on Japan's foreign currency government bonds to its highest grade.
While the Dow Jones industrial average in the United States has risen just 1.1 percent so far this year, its Japanese counterpart, the Nikkei 225 stock average, has gained 12.6 percent. The gain comes after the Nikkei rose 23 percent last year. This week, Japan's benchmark index rose above the 12,000 for the first time in more than two and a half years. The Nikkei slipped 60.08 points, or 0.5 percent, to close at 12,019.62 on Wednesday.
As in the past, the rally has been driven in large part by a recovery in exports that has been lifting shares of electronics, machinery and auto companies.
But the upturn has also been fed by growing confidence that the end may finally be in sight to the worst of the troubles that have plagued Japanese companies for a decade, including a moribund real estate market and a financial system buried in bad loans.
"Japan is becoming a normal economy again after a decade of deflationary distress," says Richard Jerram, an economist at ING in Tokyo.
Real estate stocks, like Mitsubishi Estate and Mitsui Fudosan, have been among the biggest gainers so far this year on expectations that property prices may rebound after a long slide. A government report last month said that while nationwide real estate prices fell for the 13th straight year in 2003, there were modest recoveries in parts of Tokyo, like the upscale Omotesando shopping district.
"I don't think the current trend will continue," Takeshi Fukuzawa, chairman of the Mitsubishi Estate Company, said of the falling prices. "There are regions where prices are already rising."
Since the Nikkei's plunge from its peak of 38,916 at the end of 1989, losing nearly half its value over the next year, the market has been in near continual decline. Investors in Japanese shares have witnessed just two sustained market rallies over the last 15 years. The first, in 1995, lasted for about a year, and the second, begun in late 1998, carried into early 2000. Both rallies were driven by export profits, and both fizzled when demand at home failed to materialize.
Many investors expect the latest stock rally to have more staying power precisely because of some recovery in consumer demand. Japan's economy grew at a 6.4 percent annual clip in the final quarter of 2003, the fastest pace in more than a decade, driven in part by a 0.9 percent increase in private consumption from the previous quarter. In February, spending by Japanese households rose for the fourth consecutive month.
And after a decade of mostly tough times, companies have trimmed payrolls and cut inefficient operations to levels where they can more easily achieve solid profits, said Toru Ohara, who manages a $3 billion Japanese stock fund as the chief investment officer for Franklin Templeton Investments Japan.
"Japanese corporations have changed and the stock market has changed," he said. "After falling for 15 years, I think the market has only just begun to rise."
Mr. Ohara said that despite strong profit growth, shares of Toyota Motor and other top Japanese companies were held back in the past because of broader worries about Japan itself. He expected those shares to rise now that troubles in the financial system and real estate market seemed to be clearing.
To be sure, some analysts say it is by no means sure that the strong recoveries in economic output and share prices will continue for long. One nagging concern is that even though companies are making more money, so far they are not paying their workers more.
"The question is whether wage incomes will improve enough to drive a sustainable consumption recovery," said Robert A. Feldman, chief economist at Morgan Stanley Japan. "I'm still skeptical."
Still, many analysts and investors say they do not expect the corporate earnings reports in the next weeks to dampen enthusiasm for stocks. Japanese companies are expected to report robust profit growth for the fiscal year ended March 31, thanks to both strong exports and improving sales at home. Toyota, Nissan Motor and other automakers are forecast to report record profits, after increasing their shares of the crucial North American market.
Smaller companies, too, are expected to post healthy earnings. The watchmaker Seiko, for example, on Wednesday raised its profit estimate for the fiscal year ended March 31, citing strong sales in Europe and Asia. And analysts say that profits at retailers, hurt for years by falling prices, will grow as consumer spending picks up and deflation eases.
"Japan's economy is getting firmer, both in terms of fundamentals and in the performance of the corporate sector," Heizo Takenaka, the economic and financial services minister, told reporters this week.
April 8th, 2004, 03:50 PM
I notice you are starting local versions of these threads all over! Great job! :D
April 8th, 2004, 04:18 PM
I notice you are starting local versions of these threads all over! Great job! :D
thnxs..Japan-forum needs some postings :)
April 8th, 2004, 04:31 PM
Yeap....thanks for helping out! (I just did something to is too...hehehe)
April 10th, 2004, 03:06 AM
Japan's leading retailers post robust profits
By Financial Times reporters
Published: April 8 2004 12:08 | Last Updated: April 8 2004 12:08
Ito-Yokado, one of Japan's largest retailers, said on Thursday profits jumped 15 per cent last year on robust performance at its convenience store unit, signalling a long-awaited pickup in Japan's consumer spending.
Ito-Yokado said group net profits rose to Y53.6bn ($505m) last year from Y46.6bn a year ago, as revenue rose 3.2 per cent to Y207.8bn. It expects net profits to rise another 16 per cent in the current fiscal year to reach Y62bn.
Convenience store operator Seven Eleven Japan, 51 per cent owned by Ito-Yokado, announced also on Thursday that net profits rose 12.4 per cent to Y93bn on bigger profit margins and strong take-out food business.
The strong results come a day after Aeon, which this year surpassed Ito-Yokado to become Japan's largest retailer by sales, reported a 8 per cent rise in earnings, adding to signs that a broad recovery is underway in Japan's retail sector, which had been depressed by sluggish consumer spending and deflation.
The sector's shares have soared in the past month after recent data showed a recovery in consumption. The robust retail sector boosted Tokyo stocks on Thursday to their highest levels since August 2001.
Ito-Yokado's shares have surged 40 per cent since early February and ended up 5 per cent to Y4960 on Thursday. Seven Eleven Japan's shares rose 1.3 per cent on Thursday to Y3930 having rising 25 per cent since February.
April 14th, 2004, 11:38 AM
Good news :)
April 21st, 2004, 08:33 PM
April 21st, 2004, 08:33 PM
Japanese exports rise in March, recovery on track
Tokyo, April 21
Japan's exports rose in March, thanks to continued strong demand from China, lifting Japan's trade surplus and adding fuel to an economic recovery, government figures showed on Wednesday.
Exports rose 1.3 per cent in March from the previous month on a seasonally adjusted basis for a 13.3 per cent gain from a year earlier, led by robust demand for automobiles, semiconductors and steel products, notably from China.
The trade surplus fell 14.7 per cent from a month earlier but was still up 17.8 per cent from a year earlier. The year-on-year rise was smaller than a consensus forecast of 33 per cent, due mainly to stronger-than-expected imports.
Imports were up 6.5 per cent from a month earlier and up 12.2 per cent from a year earlier.
The figures further confirm that Japan's recovery is on track, following other recent data that showed it spreading to smaller companies that benefit less from exports and to consumers, who have shown signs of spending more.
"If anything, the surplus is a bit lower than expected, mainly because imports seem to be finally picking up, and rising imports might be suggesting that domestic demand is picking up," Richard Jerram, chief economist at ING Financial Markets, said.
"Overall, export growth seems to be holding up pretty well so the cyclical dynamic looks good."
China's runaway economic growth has sucked in huge amounts of Japanese exports, such as steel, cars, electronics and other goods, lifting output and business investment in Japan and driving the country's economic recovery.
Exports to China were up 22.7 per cent year-on-year in March, while imports from the giant Asian neighbour were up 25.5 per cent.
Over the next few weeks, many of Japan's exporting companies are expected to report record earnings for the business year that ended last month.
The Bank of Japan's quarterly "tankan" corporate survey published this month showed that the improvement in the business environment was spreading to smaller companies and non-manufacturers, while household spending numbers have also been improving.
This bodes well for the economy in coming quarters as the yen's rise over the past few years could begin to take a toll on exports, which have so far been the main engine of Japan's recovery from a decade of stagnation.
BOJ Governor Toshihiko Fukui told parliamentarians on Tuesday that there was "no question" the recovery would continue, though growth in January-March 2004 would probably not match the 6.4 per cent annualised pace of the last three months of 2003.
"Overall, the January-March quarter may not have been as strong as October-December, but considering the yen strength these are fairly positive figures," said Azusa Kato, an economist at BNP Paribas in Tokyo.
May 12th, 2004, 11:41 AM
Top trading houses post record earnings
By TAIGA URANAKA
Mitsubishi Corp. and Mitsui & Co., Japan's two largest trading houses, on Tuesday reported record earnings for the year through March, helped by surging petrochemical and natural resources markets.
Mitsubishi, the No. 1 trader in terms of revenue, said its net profit for fiscal 2003 jumped 85 percent to a record 115.37 billion yen. Sales rose 14 percent to 15.18 trillion yen.
It was also the first time for a Japanese trading house to post a net profit topping 100 billion yen, the company said.
The company said strong demand for energy resources such as petroleum and liquefied natural gas, as well as petrochemical and metal products, boosted its revenue and earnings.
A solid performance by its automobile business in Asia also helped, it added.
Likewise, Mitsui said its net profit more than doubled to 68.39 billion yen for the year, on revenue of 12.28 trillion yen, up 7 percent.
The company also said it enjoyed brisk trading in the energy, petrochemical and metal businesses. It said a recent surge in steel demand pushed up its earnings, as it saw an increase in steel exports to China and other parts of Asia.
Moreover, the company said its cell phone handset retailing business fared well.
From convenience stores to aerospace, Japan's trading houses have a diverse business portfolio through far-reaching investments, including in coal and iron ore mines overseas.
Itochu Corp., Japan's third-biggest trading house, said the same day it logged a net loss of 31.94 billion yen, down from a net profit of 20.08 billion yen a year ago, after it wrote down 123.3 billion yen in fixed assets.
During the day's news conference, Mitsubishi chief financial officer Ichiro Mizuno said demand for natural resources will probably remain strong for the current year, with the U.S. and Asian economies expected to remain robust for a while.
Asked about potential financial assistance for Mitsubishi Motors Corp., Mizuno said the troubled automaker must come up with a revival plan that "makes business sense" for his company to pitch in and help.
Citing decreasing cross-shareholdings and the growing presence of overseas and individual investors, he said it has become increasingly difficult for his company to bail out MMC just because it happens to have Mitsubishi in its name.
May 12th, 2004, 11:42 AM
Toyota first firm to exceed 1 trillion yen
By KAHO SHIMIZU
Toyota Motor Corp. said Tuesday it posted a record net profit of 1.16 trillion yen for the year to March, becoming the first Japanese company to exceed the 1 trillion yen mark.
Net profit jumped 54.8 percent from a year earlier, backed by increased overseas and domestic sales and a 230 billion yen reduction in costs.
Operating profit rose 31.1 percent to a record 1.66 trillion yen while revenue grew 11.6 percent to an all-time high of 17.29 trillion yen.
Group sales and operating profit marked record highs for the fourth consecutive year.
"This was a year in which our efforts began bearing fruit," Toyota Executive Vice President Ryuji Araki told a news conference at a Tokyo hotel, adding group sales grew in all regions and production capacity reached full speed.
Araki also pointed to improvements in earnings of Toyota's subsidiaries, whose combined operating profits quadrupled from the corresponding figures five years ago.
One-time pension-related gains helped inflate the company's earnings. Toyota reported a 107 billion yen operating profit generated from returning part of its employees' pension obligations to the government.
Toyota said the yen's rise against the dollar sucked some 140 billion yen from its operating profit.
But Japan's biggest automaker cut 230 billion yen in manufacturing costs and was able to offset the negative impact of the exchange rate. A stronger yen reduces the value of Japanese firms' overseas earnings when repatriated.
In terms of sales volume, Toyota's global sales increased 9.9 percent from the previous year to a record 6,719,363 units, led by robust overseas and domestic sales. These figures include sales by two subsidiaries, Daihatsu Motor Co. and Hino Motors Ltd.
Domestic sales rose 3.8 percent to 2,303,078 units, led by the success of the new hybrid Prius and new Crown luxury sedan.
In North America, Toyota sold 2,102,681 units, up 6.1 percent from a year earlier, with the Siena minivan and Lexus RX 330 sport utility vehicle enjoying brisk sales.
In Europe, sales climbed 15.8 percent to 898,201 units, thanks to the success of the new Avensis model and the Yaris compact.
Toyota hopes to boost its global sales volume to 7,020,000 vehicles for the current fiscal year.
Starting last fiscal year, Toyota is applying generally accepted U.S. accounting principles to its consolidated financial reports.
On a parent-only basis, Toyota reported a net profit of 581.4 billion yen, down 8.3 percent from a year earlier.
Operating profit declined 3.2 percent to 833.7 billion yen while revenues rose 2.6 percent to 8.96 trillion yen.
For the current year, Araki said, the firm hopes to generate the same levels of group profits as last year even though the negative effects of the strong yen are expected to continue. The firm did not disclose its group earning projections.
On a parent-only basis, Toyota expects to generate a net profit of 520 billion yen, an operating profit of 700 billion yen and revenue of 9 trillion yen.
Bond James Bond
May 30th, 2004, 05:51 AM
May 29, 2004
Rising Spending in Japan Fuels Economic Optimism
By TODD ZAUN
TOKYO, May 28 - Consumer spending in Japan grew in April at the fastest pace in two decades, as the economy added jobs and manufacturing increased solidly, official data showed on Friday.
The figures kindled optimism that Japan's two-year-old recovery had solidly taken root and strengthened. The numbers surprised many economists who had expected growth to cool somewhat after the blistering pace of the last six months.
"The economy is recovering,'' Prime Minister Junichiro Koizumi declared in Parliament on Friday.
Private economists said much the same thing. "Everything is looking up,'' said Ryo Hino, an economist at J. P. Morgan Securities Asia. "The economy may not have lost any momentum at all from the first quarter.''
Japan gained 240,000 jobs in April, after a rise of 190,000 in March, as the information and communications sector added jobs. The unemployment rate remained at a three-year low of 4.7 percent.
A separate report showed household spending jumped a much- stronger-than-expected 7.2 percent in April from the year earlier, a sign that the brighter employment prospects may be imbuing consumers with the confidence to spend more. The increase in April was the strongest in 21 years, the government said.
Industrial production, meanwhile, was up 3.3 percent in April from the previous month, official figures showed, helped by increased output of electrical machinery and transportation equipment.
April's advance followed a string of mostly strong output numbers over the last six months and showed that "the economy is in the best condition since the bubble burst, and improving rapidly," Richard Jerram, chief economist for ING wrote in a report, referring to the rapid run-up in stocks that ended suddenly at the beginning of the 1990's.
The string of rosy figures released Friday followed a report earlier this week that Japan's trade surplus continued to balloon, hitting $9.7 billion in April, on rapid expansion of exports to Asia.
Altogether, the numbers show that while exports - the main engine of the economy - remain healthy, the economy is now also benefiting from consumer spending, economists said. The hiring surge is generating optimism that the rebound in consumer spending would continue.
Japan's economy expanded at an annual 5.6 percent in the first quarter of this year, after a robust 6.4 percent spurt in the last quarter of 2003, as a recovery driven largely by exports broadened to include a pickup in consumption.
Economists are still looking for convincing evidence of an increase in incomes, which could cement the rebound in consumer spending. In Japan, twice-yearly bonuses make up a significant portion of earnings for many workers, so economists are watching to see how generous this year's summer payouts will be.
A survey released Friday suggested that many workers might get a pleasant surprise when bonuses are paid in the next few months. The poll of 300 companies by the financial daily Nihon Keizai Shimbun showed that companies are planning to raise summer bonuses for the second consecutive year.
Among the spate of figures released Friday, perhaps the most encouraging were those on household spending. The 7.2 percent increase was the largest since October 1982 and far greater than the 1 percent rise forecast by economists. Private consumption accounts for more than half of Japan's economy.
The report showed that Japanese are spending more on travel, recreation, transportation and education, although the last category may reflect an increase in college tuition. In addition, spending on computers more than doubled in April from a month earlier, according to the report.
The report also showed that disposable income for households headed by wage earners rose for the fourth consecutive month in April, gaining 3.3 percent from a year earlier.
May 31st, 2004, 05:09 PM
well Japan is about 7-8'oclock on the economic circle 6'o clock has been and gone and everyone looks forward to 11-12'o clock
if you get what I mean
August 7th, 2004, 08:31 AM
Pakistanis use global ties to make inroads on used cars
The Asahi Shimbun
The surge to 300 billion in annual sales is just the start.
Selling used cars abroad, once a minor business, has become a 300 billion yen a year industry-and the driving force behind more than half the deals are Pakistani dealers living in Japan.
The booming niche business is led by entrepreneurs with global connections. The secret to their success? Small profits and quick returns. Arrangements are easily made via cellphone, and hardworking dealers do not shy away from even the tiniest of business transactions.
Their Japanese counterparts are feeling the crunch. ``There is no profit,'' says one dejected Japanese used-car exporter in Yokohama. ``I want to quit.''
Until five years ago, the man exported about 100 cars a month. Now, he scrapes by on about 10 transactions a month. He once raked in 100,000 yen to 200,000 yen per car. His profit margin is now slashed by half. He believes his business is suffering from the effects of the wave of Pakistani dealers who he says will export anything-even if there's as little as 10,000 yen to be made.
There are now more than 800 used-car exporting businesses-and over half are Pakistani owned, industry sources say. There were several dozen Pakistani businesses about a decade ago.
A 42-year-old Pakistani used-car exporter, based in Saitama Prefecture, is one such success story.
With a crew of three Japanese and Pakistani employees, he sells about 200 million yen in used vehicles annually.
When he set up his company seven years ago, about 40 of his fellow countrymen were doing business in the area. Now there are more than 300.
He says a worldwide network of Pakistani entrepreneurs contributed to the rise in dealers from his home country.
Another dealer agrees.
``I trade with 20 countries around the world,'' he says. He does business with compatriots in nations such as the United Arab Emirates, Iraq and South America from his trusty cellphone, he says.
According to the Finance Ministry, 720,000 used cars were shipped abroad in 2003, a 50-percent increase in five years. The average price per car was 500,000 yen. The export market pales before the 7 trillion yen domestic used-car market. But it's growing.
``Pakistanis are versatile in languages and have good marketing acumen,'' says Hiroki Fukamachi, a senior researcher at the Institute of Developing Economies at the Japan External Trade Organization (JETRO). ``Their business is just starting to take off.''
JETRO researchers note the network of 50 million Pakistanis around the world, and shipping cars through virtually duty-free Dubai in the Middle East, have given the entrepreneurs in Japan leverage. But it has not all been smooth going.
According to Saitama prefectural police, three Japanese men allegedly belonging to a political group disrupted a used-car auction sale in Koshigaya, Saitama Prefecture, on Feb. 28. The men drove onto the site in sound trucks blaring, ``No illegal parking.'' They also uttered ethnic and racial epithets and fired air rifles into the air. Offended foreign pedestrians threw stones and kicked the vehicles. It was not the first time the trucks appeared.
``As foreigners living in Japan start establishing themselves, they begin to specialize in a specific field, promoting a level of independence,'' says Yasuo Kuwahara, former president of Dokkyo University and professor of labor economics. ``There will be plenty of scenarios in the future in which Japan's level of tolerance will be tested.''(IHT/Asahi: April 6,2004) (04/06)
August 7th, 2004, 01:20 PM
The Kiwi's do it as well.
Although because of the strength and wealth of the Australian economy,the numbers of used cars coming in from Japan to Australia is limited.Australia makes its own cars and other cars like Toyota and Ford.So the pirce for new cars is pretty cheap.
New Zealand on the other hand makes nothing in terms of heavy industry.So the car price is heafty on a new car.They are happy to pay good money for Japanese used cars
October 10th, 2004, 03:24 AM
Yen Strengthens on Optimism Japanese Economy Is Accelerating
Oct. 7 (Bloomberg) -- The yen rose against the dollar for the first day in five after Japan's index of leading economic indicators rose to the highest since March.
The index, which measures job offers, consumer confidence and other indicators of future economic growth, rose to 72.2 percent from 60 percent in July, suggesting the economy will extend its expansion and entice overseas investors to buy Japanese shares.
``There are a few factors driving the yen at the moment -- obviously cyclical recovery and the prospects of foreigners buying Japanese equities is a strong one,'' said Steven Saywell, a currency strategist in London at Citigroup Inc. ``The yen is pretty well placed over the coming weeks and months.'' Citibank forecasts Japan's currency will rise to 106 by year-end.
Against the dollar, the yen advanced to 111.10 at 10 a.m. in New York, from 111.34 late yesterday, according to EBS, an electronic currency-dealing system. The yen climbed to 136.65 per euro, from 136.82.
The Nikkei 225 Stock Average rose 0.8 percent last week as overseas investors were net buyers of Japanese equities for a ninth week in 10, Ministry of Finance figures showed. The average fell 0.3 percent today, ending a 5.6 percent gain in the previous five days.
Foreign investors bought a net 236.3 billion yen ($2.12 billion) in Japanese stocks in the week ended Oct. 1, the biggest net purchase since the week to June 18.
``Amid the weaker yen on higher oil prices, foreign purchases of Japanese stocks is one of supportive factors for the yen,'' said Daisuke Uno, market analyst in Tokyo at Sumitomo Mitsui Banking Corp. ``Foreign investors are likely to continue buying Japanese shares in the medium- to long-term and that should help the yen,'' which may rise to 110 per dollar at the end of this month, he said.
Japan's currency is ``significantly undervalued'' against the U.S. dollar, General Motors Corp. Chief Executive G. Richard Wagoner Jr. said in a Bloomberg News radio interview from Irving, Texas, which will air tomorrow. He reiterated his view that Japan's government shouldn't sell yen to weaken it.
Demand for the dollar may increase against the euro on expectations a government report tomorrow will show U.S. companies created the most jobs in four months in September. The dollar was at $1.23 per euro from $1.2288 yesterday.
The labor market ``has begun to improve,'' Federal Reserve Bank of Kansas City President Thomas Hoenig said yesterday during a talk to business leaders in Lincoln, Nebraska. Hoenig is a member of the Fed's rate-setting committee this year.
Dollar May Gain
U.S. employers probably added 150,000 jobs last month, up from 144,000 in August, according to the median forecast of 73 economists polled by Bloomberg News.
``The dollar will tread higher in the run-up to the employment report,'' said Shogo Nagaya, a trader in Tokyo at Nomura Trust and Banking Co., a unit of Japan's biggest brokerage. ``We may well get confirmation the U.S. labor market is on a good recovery path.'' The dollar may gain to $1.22 per euro today, he said.
The Institute for Supply Management's gauges of employment for both manufacturing and non-manufacturing industries rose to three-month highs in September, monthly reports from the group showed in the past week. A government report today showed first- time jobless claims fell last week to a one-month low of 335,000 from a revised 372,000 the previous week.
Gains in employment may increase the chance of higher U.S. interest rates. Robert McTeer, president of the Federal Reserve Bank of Dallas, on Oct. 5 said the Fed can keep raising rates at a ``measured'' pace, after increasing its benchmark overnight bank-lending rate three times since June to 1.75 percent.
Euro and ECB
The euro also held near a two-week low after the European Central Bank kept its benchmark refinancing rate at a six-decade low of 2 percent, as predicted by all 34 economists surveyed by Bloomberg.
``While some uncertainty has recently arisen concerning the expected strengthening'' of the economy, the recovery is ``ongoing,'' ECB President Jean-Claude Trichet said at a news conference after the decision.
October 22nd, 2004, 06:46 AM
Japan exports hit record levels
Exports from Japan hit their highest level for more than 50 years last month, but high oil prices could still spell economic slowdown, analysts said.
Japan's exports rose 12.5% on 2003 to 5.46 trillion yen ($50.6bn; £27.9bn), a high since records began in 1947.
But an oil-fuelled rise in imports meant the boost to the trade surplus was smaller than expected.
Japan's economy minister said this week that oil prices were the biggest threat to economic growth.
Although the September exports figure showed strong growth over the same month in the previous year, it was down slightly on August when seasonally adjusted.
The same pattern could be found in the trade surplus, the amount by which exports exceed imports.
September produced a surplus of 1.24 trillion yen, up 12.7% in comparison with 2003.
But that figure was 21.8% lower than August's surplus.
The decline, said Shuji Shirota at Dresdner Kleinwort Wasserstein in Tokyo, suggested "signs of peaking out - mostly due to a slowdown in overseas economies and rising crude oil prices".
November 6th, 2004, 06:30 AM
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January 14th, 2005, 06:13 AM
How do Japanese residents on this thread think about the recovery? Is it solid or it may vaporize any time due to the uncertainty looming over China and the US? Thanks for the input.
January 14th, 2005, 09:50 AM
How do Japanese residents on this thread think about the recovery? Is it solid or it may vaporize any time due to the uncertainty looming over China and the US? Thanks for the input.
Are you also the one wishing to claim every trash about the Japanese economy as soon as something positive about the economy appears or...? I hope you aren't one of those pathetic Japan-bashers.
January 14th, 2005, 10:01 AM
Are you also the one wishing to claim every trash about the Japanese economy as soon as something positive about the economy appears or...? I hope you aren't one of those pathetic Japan-bashers.
What the hell are you talking about? I have invested in some Japanese stocks so can't I be a bit more concerned over my own investment? Aren't you a bit too sensitive over a perfectly innocent question?
Am I gonna die under friendly fire or what?
January 14th, 2005, 06:39 PM
What the hell are you talking about? I have invested in some Japanese stocks so can't I be a bit more concerned over my own investment? Aren't you a bit too sensitive over a perfectly innocent question?
Am I gonna die under friendly fire or what?
Just ignore the guy, he's been getting banned for ages now, but he always signs up again and again.
Welcome to the Japanese forum, CarolBrissy.
January 15th, 2005, 12:29 AM
Mitsubishi, Peugeot in tie-up talk
Tuesday, January 11, 2005 Posted: 1223 GMT (2023 HKT)
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TOKYO/PARIS (Reuters) -- Mitsubishi Motors Corp. (MMC) said on Tuesday it was in tie-up talks with PSA Peugeot Citroen, but the French firm ruled out a share deal and Japanese analysts doubted the negotiations would quickly boost the troubled Japanese car manufacturer's business.
MMC, reeling from financial problems and a scandal over its cover-ups of defects, said it was studying the possibility of partnerships with the French manufacturer and others to revitalize its business as soon as possible.
"It is true that Mitsubishi Motors is studying the possibility of a business tie-up with PSA Peugeot Citroen," company spokesman Junji Nishihata said. "(But) there are no concrete details decided at this point."
Media reports at the weekend said that MMC had reached a basic agreement to provide Peugeot, Europe's second-biggest car maker, with some 40,000 vehicles annually.
An official at Peugeot's Japanese sales arm, Peugeot Japon, declined to comment. PSA Peugeot Citroen in France said it was in contact with Mitsubishi but had not agreed on any cooperation project.
A company spokesman also said an exchange of stakes was not on the agenda.
"We are in contact with most international manufacturers as part of our cooperation policy. There are therefore no talks about an equity deal between PSA and other manufacturers," a PSA Peugeot spokesman said.
"We have contact with Mitsubishi as we do with other global car manufacturers," he added.
By 0944 GMT PSA Peugeot shares were down 0.77 percent at 47.76 euros.
In Tokyo shares in Mitsubishi Motors closed up 4.69 percent at 134 yen, outperforming the Nikkei average's 0.93 percent gain.
A strategy of providing vehicles to other car makers is expected to form the centerpiece of MMC's revival plan, which will be unveiled by the end of this month, but analysts say limited production tie-ups would be disappointing.
"MMC certainly needs partners, as they will help raise its under-utilized production capacities, but that won't solve its fundamental problem of a sharp fall in sales," Nomura Securities analyst Shinya Naruse said.
"A production supply agreement of some 40,000 cars a year will hardly bolster the business of a car maker producing 1.3 million cars a year globally."
MMC, Japan's only unprofitable auto maker, is struggling to improve its fortunes after former majority shareholder DaimlerChrysler gave up on its rehabilitation in April last year.
MMC has also suffered one of the industry's worst-ever recall scandals after it was revealed in 2000 that it had been hiding safety records and secretly repairing vehicles for two decades in Japan.
Its car sales dived 41 percent in 2004 but have yet to show any sign of bottoming out.
MMC and Japan's second-biggest car maker, Nissan Motor, are discussing a possible expansion of their tie-up in the mini vehicle segment, such as through a new joint venture.
The Yomiuri Shimbun newspaper reported on Sunday that MMC had agreed to build the mini vehicle "eK wagon" under the Nissan brand, but the two parties had decided to continue talks on a joint venture plan.
Broadcaster NHK said Mitsubishi Motors would build 30,000 newly developed sport-utility vehicles and 10,000 trucks for Peugeot for sale under its brand.
Rich Gilligan, chief executive of the Japanese firm's North American operations, on Sunday declined to comment on a tie-up with Peugeot but said MMC would be "excited" to build products for any auto maker to fill its under-utilized Normal, Illinois plant's capacity.
Last November, Peugeot Chairman Jean-Martin Folz told a Japanese newspaper it might expand its line-up by buying cars from MMC on an original equipment manufacturing basis.
He denied there was any possibility of making a capital investment in MMC.
January 17th, 2005, 01:57 PM
Japan govt sets year to March 2006 real GDP growth target at 1.6 pct
TOKYO (AFX) - The government has set a real GDP growth target of 1.6 pct for the year to March 2006, under a new computation method, lower than a revised target of 2.1 pct expected for the current fiscal year, the Cabinet Office said
The Cabinet Office had earlier forecast growth of 3.5 pct growth for the year to March 2005 under the old method of computing economic performance
"In the year to March 2006, the Japanese economy is expected to maintain a gradual recovery, led by domestic private demand," the Cabinet Office said
The administration, led by Prime Minister Junichiro Koizumi, approved the growth projections at a special cabinet meeting this morning
According to the official forecast released by the Cabinet Office, domestic private demand is expected to make a positive contribution of 1.1 percentage points to the year to March 2006 real GDP growth, while net exports are expected to contribute 0.4 percentage point to growth
Despite the forecast decline in overall economic growth, the government expects the corporate sector-led recovery to continue, with the positive impact on employment and wages possibly boosting consumer spending gradually
"The recovery in the corporate sector in the form of gradual increases in industrial production and capital spending is expected to continue (in fiscal 2006)," the Cabinet Office said
"Reflecting such a development in the corporate sector, the labor and wage environment, which is still challenging, is expected to start moving toward an incipient recovery and that is expected to gradually have a positive impact on the consumer sector." Private consumption in the year to March 2006, on an inflation-adjusted basis, is forecast to rise 1.6 pct, and nominal consumption to expand by 0.8 pct
In the current year to March 2005, real private consumption is forecast to increase 1.7 pct, and expand 1.1 pct on a nominal basis
Non-residential investment, effectively corporate capital expenditure, is expected to rise 3.3 pct in real terms, or a nominal 2.8 pct, in the year to March 2006, compared with a real increase of 5.6 pct and nominal rise of 4.6 pct for the year to March 2005
Residential investment is forecast to fall 0.6 pct in real terms and 0.2 pct nominally in the year to March 2006 compared with the real term rise of 1.7 pct and the nominal gain of 2.6 pct in the year to March 2005
The Cabinet Office also cited the expected decline in the degree of deflationary pressure in Japan in the new fiscal year, as result of the continued recovery of the corporate sector and the possible rebound in private consumption
"By pushing forward combined efforts by the Bank of Japan and the government, Japan is expected to see a progress in the path to move out of deflation," the Cabinet Office said
As evidence of the declining deflationary pressure, the Cabinet Office is now forecasting nominal GDP to grow 1.3 pct in the new fiscal year, up from the 0.8 pct expansion expected for the current term
GDP deflator is forecast to fall by 0.3 pct in the new fiscal year, compared with a 1.3 pct drop in the current term
The Cabinet Office also sees continued decline in the proportion of public sector spending due to strong budgetary constraints
Japan's public deficit is already the highest in the world among industrialized nations relative to economic size
As a result, public sector spending is expected to boost real GDP by a marginal 0.1 percentage point in the year to March 2006, after slashing growth by 0.4 percentage point in the year to March 2005
The outlook assumes the unemployment rate will average 4.6 pct in fiscal 2005, down fractionally from the 4.7 pct projected for the current year
The rate of deflation, as measured by the consumer price index, is expected to rise 0.1 pct
Industrial output will rise 1.8 pct in the new fiscal year, down from the 4.0 pct increase expected this year
The economic outlook assumes the dollar will average 104.9 yen in the year to March 2006, compared with 107.7 yen projected for the current year, and crude oil prices will average 39.8 usd per barrel, up from 38.2 usd per barrel this year
The forecast also assumes that global GDP, excluding Japan, will expand 3.2 pct in fiscal 2005, slower than the 3.8 pct growth forecast for the current term
January 18th, 2005, 03:36 PM
Airbus press release 17.03.2004
The European aircraft manufacturer Airbus announced today the addition of new Japanese partners for the A380 programme. Matsushita Avionics Systems (MAS), Koito Industries and JAMCO Corporation have all been selected as preferred suppliers of new technology equipment for the next-generation very large aircraft programme. Moreover, Sumitomo Precision Products (SPP) and JAMCO Corporation will supply structural assemblies for the A380.
Airbus’ President and CEO, Noel Forgeard, said, “We are honoured to welcome these fine companies in the A380 programme. With their contribution we can provide the most advanced technology for the world’s most advanced airliner programme currently launched in production.”
The addition of these three new partners brings to eighteen the total of Japanese companies collaborating in the A380. The estimated revenue of the Japanese suppliers in the A380 programme will rise to well over US $4.25 billion in the years to come.
The contribution of each company is as follows:
Matsushita Avionics Systems has been selected as preferred supplier of in-flight entertainment equipment for the A380. Development of the next generation eX2 system is underway at MAS’ Development Centre in Lake Forest, CA (USA) and production will be completed at Matsushita Electric Industrial`s Kadoma plant near Osaka (Japan). In 1988 MAS provided the first IFE system to Airbus – the then-most advanced MPES system for the A320 family.
Koito Industries has been selected as preferred supplier of A380 passenger seats. The design and production of the new seats is on-going at Koito Industries’ Yokohama plant (Kanagawa Prefecture). Koito Industries supplies passenger seats for all current models of Airbus aircraft.
Sumitomo Precision Products will be supplying the gear uplock spring strut assembly for the actuation system of the wing landing gear of the A380. The design is underway at SPP’s Amagasaki plant (Hyogo Prefecture) and production will be at Shiga plant near Kusatsu (Shiga Prefecture). Sumitomo Precision has been working in all Airbus programs since 1985.
JAMCO has been selected as preferred supplier of galley systems for the A380. JAMCO will also supply the A380 rear bay electronic rack assembly. JAMCO’s Tachikawa plant (Tokyo) is responsible for design, and serial production will take place at JAMCO’s Murakami plant (Niigata Prefecture). JAMCO is already working in the A380 upper floor beams and VTP center box stringers using its revolutionary advanced pultrusion (ADP) technology.
To date, eleven customers have announced firm orders and commitments for a total of 129 A380s. The 555-seater A380 will enter into service in early 2006.
January 21st, 2005, 02:32 AM
Japan fires up its semiconductor industry
By Michael Kanellos CNET News.com August 24, 2004, 4:00 AM PT
Forward in EMAIL Format for PRINT Processors Asia Sony Corporation Applied Materials Inc
Japan is back in the chips.
After years of watching Asia's chip industry shift toward Taiwan and China, Japanese companies are once again investing heavily in semiconductors. NEC, Sony, Renesas Technology, Toshiba and others are in the midst of building or expanding fabrication facilities, or "fabs," and other plants, according to several executives and analysts.
"We've seen a significant resurgence in Japan. Japan has a reborn semiconductor industry and will once again be a world-class competitor," said Joe Bronson, chief financial officer of Applied Materials, the world's largest maker of semiconductor equipment.
The activity is widespread. Memory maker Elpida Memory, for instance, said in June that it will invest $4.1 billion to $4.5 billion in a new fab that will open in the second half of 2005. It also plans to increase production capacity at a Hiroshima fab this year from 22,000 to 28,000 wafers a month.
The companies are driven in part by sheer competitive necessity. The construction activity is concentrated on erecting new fabs--or expanding a few existing ones--that process wafers with a 300-millimeter diameter rather than the older 200-millimeter versions. These larger wafers allow manufacturers to produce about twice as many chips without inflating their operating budgets, thereby cutting costs immensely.
"Japan is investing very heavily to ensure they don't miss this decade," said Ray Bingham, chairman of Cadence Design Systems, which makes semiconductor design tools. NEC, for one, is very active, he said. "They lost an awful lot of electronics value in the '90s."
A downturn in Japan's gross national product in the second quarter, however, has dented the optimism.
Japanese companies need to keep pace with their rivals overseas. Manufacturers like Intel, IBM and Texas Instruments are expanding their own 300-millimeter operations. Many Japanese companies are also expanding operations and creating alliances in China to capitalize on low costs and local demand.
"Japan underinvested for the past eight or nine years. Now they have to catch up," said Anantha Sethuraman, vice president of strategic marketing at FEI, which makes imaging tools and microscopes that let manufacturers "see" the internal structure of chips. "Japan started coming back early last year. By the latter part of last year, Japan was investing like there was no tomorrow."
The increased investment also comes from a resurgence in confidence that had been building until recently. Japan's gross domestic product grew by just 1.7 percent in the June quarter, much slower than expected. Still, the International Monetary Fund said it expects Japan's GDP to rise by 4.5 percent this year, the fastest pace in a decade. Between October 2003 and March 2004, Japan's economy grew in the 6 percent range.
In July, the Committee of Silicon, an organization of Japanese wafer manufacturers, predicted that production of silicon wafers by Japanese companies would come to 5,700 tons this year, according to a report in EE Times. That's higher than its earlier 5,600-ton forecast, which itself represented a 15 percent increase over 2003.
Current technology trends play into traditional Japanese strengths. Games, consumer electronics and wireless communications have emerged as some of the hottest markets in IT, and the country has been a dominant player in these fields.
"Japan has always been a specialist in computer electronics. They are cutting-edge in wireless," said Bruce Beckloff, the Tokyo-based director of segment marketing for ARM, which licenses processor cores and intellectual property to chipmakers. "(Digital TV) is here. Sony and the gang are putting a lot of investment into it."
ARM does not break out its Japan-related revenue separately, but Beckloff said it is a growing part of the company's overall Asia business. In the second quarter, approximately 40 percent of ARM's bookings came from Asia, up from 33 percent at the same time last year. In the second quarter, the company announced four new licensing deals in Japan. NEC is also working with ARM to develop multicore chips for cell phones.
Toshiba is one of the companies, in particular, that is gearing up for consumer electronics. The company's first 300-millimeter fab, located in Kyushu, will start producing logic chips this fall. Toshiba is one of the companies involved in producing the Cell microprocessor for the next version of Sony's PlayStation, which some believe could become one of the most powerful processors for desktop game station devices.
Toshiba also plans to open, with SanDisk, a NAND flash memory plant in Yokkaichi that will process 10,000 wafers a month in the second half of 2005.
"We expect the market to see 30 percent annual growth from 2003 to 2005, from 380 billion yen to 680 billion yen," or from $3.5 billion to $6.2 billion, Makoto Yasuda, of Toshiba's corporate communications department, wrote in an e-mail.
NAND flash memory comes inside the memory cards found in cameras and phones, and has emerged as one of the fastest-growing markets in semiconductors. Toshiba invented it and, therefore, gets to collect royalties from competitors such as South Korea's Samsung.
Mergers over the past few years have helped the industry reawaken by spreading large capital equipment requirements over a larger base. Renesas was formed by merging the processor operations of Hitachi and Mitsubishi, noted Risto Puhakka, an analyst at VLSI Research. Elpida came from the merger of the memory divisions of NEC and Hitachi.
"Basically, they kind of woke up to the concept that if they don't invest in the industry, it will go away," he said.
Still, Puhakka noted that Japan must contend with the aggressive expansion plans of Chinese and Taiwanese companies. Not only will these companies compete against Japanese giants, but the overall effect of all this construction could lead to a glut.
"The concern right now is that we will reach overcapacity in mid-2005," said Bill Ong, an analyst at American Technology Research.
January 21st, 2005, 08:19 AM
Record 6.14 mil foreign travelers visited Japan in 2004
Friday, January 21, 2005 at 15:31 JST
TOKYO — The number of foreign travelers visiting Japan hit a record 6.14 million in 2004, up some 930,000 from the previous year, Land, Infrastructure and Transport Minister Kazuo Kitagawa said Friday.
The government will promote the "Visit Japan" campaign in 2005 to boost the number to 7 million, Kitagawa told a news conference. (Kyodo News)
January 21st, 2005, 01:01 PM
Record 6.14 mil foreign travelers visited Japan in 2004
Friday, January 21, 2005 at 15:31 JST
TOKYO — The number of foreign travelers visiting Japan hit a record 6.14 million in 2004, up some 930,000 from the previous year, Land, Infrastructure and Transport Minister Kazuo Kitagawa said Friday.
The government will promote the "Visit Japan" campaign in 2005 to boost the number to 7 million, Kitagawa told a news conference. (Kyodo News)
Great news. It's high time for Japan to make a handsome income from tourism.
January 21st, 2005, 01:21 PM
Great news. It's high time for Japan to make a handsome income from tourism.
hope they buy alot of stuff so it fuels the economy.
btw,reading a book right now about the japanese economic history and its structures. The japanese model is pretty interesting:)
'Beyond Capitalism, The Japanese Model of Market Economics', by Eisuke Sakakibara
Harry Potter China
January 21st, 2005, 04:42 PM
What is the percentage share of Japan's economy Tokyo generates?
January 21st, 2005, 06:04 PM
What is the percentage share of Japan's economy Tokyo generates?
According to www.mid-tokyo.com, it's about 30%
January 21st, 2005, 08:35 PM
The government will promote the "Visit Japan" campaign in 2005 to boost the number to 7 million, Kitagawa told a news conference. (Kyodo News)
7 million + 2, my parents are coming this September :D
January 21st, 2005, 10:50 PM
7 million + 2, my parents are coming this September :D
+2 me and my friend from Finland will be going to Japan Dec 2005:)
2005 will be the Asia-tour:)
January 22nd, 2005, 01:15 AM
Which city in Japan makes the most money on tourism?
January 22nd, 2005, 04:31 AM
Which city in Japan makes the most money on tourism?
I think Kyoto, but maybe Tokyo :D
February 11th, 2005, 06:32 PM
Japan's jobless sow the seeds of an underground revival
Leo Lewis in Tokyo
10 January 2005
The Times of London
TOKYO'S investment bankers shortly will be striking their billion-dollar deals above a vegetable farm.
The Otemachi financial district, where office property is among the most expensive in the world, is to host an experimental project aimed at converting former executives to employment in agriculture.
In what used to be the vaults of one of Japan's biggest banks, a 1,000 sq metre "vegetable factory" will grow rice, tomatoes, strawberries and other produce.
The subterranean farm will use hydroponics -a process by which plants are grown in a solution of nutrients, rather than in soil, under artificial lighting.
Because the facility is underground, every aspect of the environment can be controlled, from heat to light to humidity, allowing project managers to tweak the conditions to maximise efficiency.
Although the farm's day-to-day operations will be run by a computer, the project is being used to train Tokyo's jobless -many of whom lost their jobs during the Japanese banking crisis -in the business of commercial agriculture.
The project is run by the Kanto Employment Creation Organisation (Keco), an association of big Japanese companies, including Sony and Canon. Its aim is to explore ways to channel the skills of thousands of workers made redundant by corporate restructuring into sectors that are suffering from a labour shortage.
The farming industry has suffered particularly from the economic trends of the past 30 years as children born in rural areas increasingly have chosen to move into the big cities when they leave school.
By May, the Otemachi underground farm will reap its first harvest and, if it is a success, Keco will launch similar projects in other cities.
Among Keco's members is Pasona, a Japanese staffing agency that has made its name by backing schemes that find work for unemployed men in their 40s and 50s, whom corporate Japan generally ignores.
Its recent initiatives have been aimed at putting to work in the agricultural sector the marketing skills of former white-collar workers.
The Government is keen on any venture that pushes the Japanese back towards farming. In so-called special agricultural districts planned by Junichiro Koizumi, the Prime Minister, private companies will be allowed to rent land to enter the farming business.
The Otemachi financial district has been the target recently of a variety of initiatives to bring together the worlds of banking and farming. Village agricultural co-operative societies have been given special rates on commercial property to open sales offices pitching everything from cabbages to seaweed.
February 11th, 2005, 11:00 PM
very interesting :)
February 12th, 2005, 10:52 AM
Otemachi-grown vegetables! Now, those must be indeed expensive! :lol:
February 12th, 2005, 01:07 PM
"Because the facility is underground, every aspect of the environment can be controlled, from heat to light to humidity, allowing project managers to tweak the conditions to maximise efficiency. "
SMART ey? :D
March 7th, 2005, 02:08 AM
March 7th, 2005, 05:46 AM
big news ,at same time bad news
sadly Idei, current CEO was too idiot :down:
March 7th, 2005, 06:18 AM
sony is done.......
March 7th, 2005, 08:45 AM
what makes u all say that ? :?
March 9th, 2005, 12:42 PM
yeah this sounds like good news for Sony
March 9th, 2005, 03:09 PM
yeah this sounds like good news for Sony
The new CEO is Welish is not good news for us, but it's really good for this great company that the three asshole leaders of Sony (Idei, Ando, Kutaragi) was dismissed.
March 10th, 2005, 04:08 AM
Whats so bad about a welish CEO?
March 10th, 2005, 12:50 PM
March 10th, 2005, 03:42 PM
Aeon acquires Carrefour's Japan unit
TOKYO March 10 Kyodo - French retailer Carrefour SA and Japanese supermarket chain operator Aeon Co. said Thursday they have agreed on the Japanese company's acquisition of Carrefour's Japan unit through the transfer of its all shares.
All of Carrefour Japan Co.'s shares were transferred Thursday to Aeon, based in Chiba Prefecture. The top Japanese retailer did not reveal the amount it paid for the acquisition and denied there would be any effect on its earnings prospects for the business year ending in February 2006.
March 10th, 2005, 03:43 PM
Japan ranks 8th in IT strength: survey
GENEVA March 9 Kyodo - Japan ranked eighth in the world in 2004 in its capacity to use information and communications technology, up from 12th in 2003, a Swiss-based research institute said in a report released Wednesday.
It is the first time Japan has ranked among the world's top ten economies in the World Economic Forum's annual survey assessing countries' IT strength, begun in 2001.
March 13th, 2005, 01:21 AM
oh... so hes saying its bad news just because it is a foreigner running sony?
March 13th, 2005, 02:17 AM
Well, I'm a nationalist, but never a racist. haha
As every Japanese does, I respect two great founders...that is Souichirou Honda (ex-President of Honda Corporation), and Masaru Ibuka (ex-President of Sony Corporation). Both were industrious engineers rather than great managers. What Sony is devoid of now is the passion for the skills IMO. High tech and high touch was Sony's corporate culture before. I'm really dispponited that the non-techie from the US media was designated for next CEO.
March 14th, 2005, 01:35 PM
Japanese economy stages recovery
The Japanese economy expanded slightly in the last three months of last year, emerging from a mild recession.
April 4th, 2005, 03:26 PM
Japan to fully privatise postal savings
By David Pilling in Tokyo
Published: April 4 2005 12:13 | Last updated: April 4 2005 12:13
The Japanese government will sell its entire stake in the savings and insurance arm of the post office over 10 years from 2007, according to details released on Monday of a bill to be presented to parliament this month.
The insistence on selling down the entire stake will be presented as a victory for Junichiro Koizumi, the prime minister, who opposed proposals by some of his own ministers that the government keep a stake.
April 26th, 2005, 03:34 AM
Japan's FY 2004 jobless rate improves to 6-year low 4.6%
TOKYO, April 26, Kyodo - (EDS: ADDING INFO)
Japan's seasonally adjusted unemployment rate averaged 4.6 percent in fiscal 2004, down 0.5 percentage point from fiscal 2003 for the best reading in six years, the government said Tuesday.
The jobless rate for the year to March 31 was the lowest since the 4.3 percent logged in fiscal 1998, suggesting that Japan's economic recovery has taken root, although it has been leveling off in recent months.
The number of people without jobs averaged 3.08 million in fiscal 2004, down 340,000 from the previous year for the second straight yearly decline, the Ministry of Internal Affairs and Communications said in a preliminary report.
The average jobless rate for men came to 4.8 percent, down 0.5 point, and that for women was 4.3 percent, also down a half point.
The number of jobholders increased 120,000 to an average 63.32 million for the second consecutive yearly expansion.
A ministry official said Japan's employment situation has improved, though the job market for the young remains severe.
In March, the nation's jobless rate came to 4.5 percent, down 0.2 point from February, the report said.
The March reading was slightly better than the average private-sector forecast of 4.6 percent.
The jobless rate for men came to 4.7 percent in March, down 0.3 point from February, and that for women was 4.2 percent, unchanged from the previous month.
The number of jobless people came to 3.13 million in March, down 200,000 from a year earlier for the 22nd straight month of decline.
The number of people forced out of their jobs fell 11,000 from a year earlier to 790,000.
Separate data showed the average ratio of job offers to job seekers in fiscal 2004 rose 0.17 point from the previous year to 0.86, meaning there were 86 job offers for every 100 job seekers.
The ratio in March was a seasonally adjusted 0.91, unchanged from February, the Ministry of Health, Labor and Welfare said.
The monthly average number of job offers in fiscal 2004 increased 15.5 percent from the previous year and that for job seekers fell 8.3 percent.
In March, the number of job offers climbed 0.8 percent from February, while the number of job seekers rose 1.1 percent.
April 30th, 2005, 01:13 AM
Winners & losers in FY 2004
This week many big corporations have issued their fiscal year 2004 (from Apr 04 to Mar 05) earnings' reports. Since I'm very interested in the topic and I like to track Japan's large companies, below I post some remarkable figures I've been collecting.
(Figures in $ million at 107 yen/1$. Consolidated sales)
Home Electronics + IT + Office Equip.
Sales / Net income
The big ones:
Hitachi (Tokyo) 84,365 / 481
Matsushita EI (Osaka) 81,436 / 547
Sony (Tokyo) 66,912 / 1,531
Toshiba (Tokyo) 54,543 / 430
NEC (Tokyo) 45,375 / 635
Fujitsu (Tokyo) 44,511 / 298
Canon* (Tokyo) 32,410 / 3,209
Mitsubishi Electric (Tokyo) 31,875 / 664
Sharp (Osaka) 23,737 / 718
Fuji Photo Film (Tokyo) 23,620 / 790
Sanyo Electric (Osaka) 23,221 / -1,282
Ricoh (Tokyo) 16,954 / 777
*Companies with FY ending in December.
Comment: Among the home electronics makers, Sharp is the winner with a 3% profit on sales while Sanyo Electric is the clear loser due, in part, to the damage suffered by their SemiCon factory in Niigata prefecture in October's earthquake. Toshiba, NEC & Hitachi improved their profits but those are still weak compared to sales volume.
In the Office Equip. segment, Canon is the mega-winner with amazing profits once again. Fuji Photo Film and Ricoh have also issued nice results.
If any of you are interested, I'll post new stuff on this topic.
April 30th, 2005, 10:24 AM
NEC products are very popular in the UK
I love them
I am surprised sony did as well as it did as I we hear bad stuff about them here
May 2nd, 2005, 01:53 AM
^Sony's movie division did quite well, electronics did not.
May 7th, 2005, 06:00 PM
U.S. to introduce use of Japan's message authentication technology
TOKYO, May 7, Kyodo - The United States is set to introduce to local and international communication networks a message authentication code technology developed in Japan, a Japanese researcher said Saturday.
The CMAC method, endorsed by the U.S. National Institute of Standards and Technology, marks the first time the institute will employ an information security technology created in Japan, according to Tetsu Iwata, a research assistant at Ibaraki University, who promoted the project along with Professor Kaoru Kurosawa.
With the institute's endorsement, CMAC will not only be used in communication networks within the U.S. government but virtually become a global standard.
An industry group for copyright protection, made up of eight firms worldwide including Microsoft Corp. and International Business Machines Corp., is also considering installing the technology, Iwata said.
The CMAC, or cipher-based MAC, technology secures the authenticity of messages via the Internet and mobile phones by checking if the contents of the message sent have been altered or a third party has assumed being the sender. It also prevents the illegal copying of DVD software.
The new technology is an improved version of the CBC-MAC method used by the institute.
MAC, which means message authentication code, is a short piece of information used to authenticate a message in cryptography.
The message authentication process works by installing software in the computers and mobile phones of both the recipient and sender. The recipient can read the message by unlocking a secret key that is shared with the sender, and is alerted that the message has been altered if an invalid MAC is produced.
May 29th, 2005, 09:58 PM
Mitsubishi Wins $3.4 Billion Dubai Urban Rail Project
May 29 (Bloomberg) -- Mitsubishi Corp., Japan's biggest trading company, won a $3.4 billion contract to build a light-rail network in Dubai, the first urban commuter metro in the Persian Gulf sheikhdoms where record oil revenue is spurring growth.
Tokyo-based Mitsubishi Corp. will lead a group of companies that includes Japan's Mitsubishi Heavy Industries. Ltd., Obayashi Corp. and Kajima Corp. to build the project, digging a 6-mile-long tunnel, laying almost 45 miles of rail line through the city and supplying 44 electric trains, the Dubai Municipality said today.
``This is one of the largest contracts Mitsubishi has ever won,'' Susumu Uchida, a member of the board of Mitsubishi Heavy Industries, said in an interview in Dubai today. ``This is a milestone for us as this is the biggest single light rail project in the world today,'' he said. Uchida wouldn't specify how the contract was divided.
Dubai, the second-largest of the United Arab Emirates' seven Sheikhdoms, is in the middle of a construction boom as it invests billions of dollars to improve its infrastructure to keep pace with the country's near 10 percent growth over the last two years, according to the emirate's government.
Mitsubishi beat off competition for the contract from two other groups including Alstom SA, the world's second biggest train maker, Bilfinger Berger AG, Germany's No.2 construction company and Siemens AG.
Shares of Mitsubishi rose 30 yen, or 2.2 percent, to 1,421 yen ($13.17) on the Tokyo Stock Exchange at the close of trading on May 27. The shares have gained 43.8 percent from a 12-month low of 988 yen on July 7.
Dubai is part of the United Arab Emirates, which is using a windfall profit from record oil prices last year to double revenue from tourism in the next decade. Crude oil in New York has soared more than 30 percent to $51.85 a barrel over the last 12 months.
``While light-rail projects are seen globally as unprofitable, the government has to take the view that the impact of the project will keep Dubai competitive,'' Daniel Hanna, Middle East economist at Standard Chartered Plc, said in a telephone interview in Dubai today.
``Dubai like all big cities needs a transport system,'' he said, and added, that the emirates' population has grown at an annual rate of about 7 percent for the last 10 years to about 1.2 million people.
The metro, built in less than 5 years, will consist of two lines, linking Dubai International Airport with the Middle East's largest container shipping port at Jebel Ali via the city's major business and residential districts that branch off its main traffic congested thoroughfare, known as Sheikh Zayed Road.
Mitsubishi Corp. was added to the recommended stock list of Goldman Sachs, which said on May 18 that the price was relatively cheap. Goldman set a price estimate of 1,650 yen. The company and its partners, known as Dubai Rapid Link, bid $1.6 billion less than its nearest competitor for the contract, Dubai Municipality said.
Gulf Rail Projects
``We're very encouraged to enter this market for rail,'' Mitsubishi's Uchida said, adding that the company is ``tracking'' a $5 billion project to build a freight railway, known as the Saudi Landbridge, across Saudi Arabia.
The Dubai government will finance the project through a mixture of loans and equity, guaranteeing the entire cost of the venture, an official said. ``How we get finance for the project is our own business, but we're discussing this with advisers,'' said Qassim Sultan, director of Dubai Municipality.
The metro will rely on ticket sales from the 760,000 people that are expected to use it on a daily basis to commute, and rental from leasing 43 stations along its route, said Qassim, without giving specific figures on forecasted earnings.
The rail link will require 400 megawatts of power and the construction of five electrical distribution stations, Qassim said. The emirate has plans to quadruple power generating capacity to about 13,000 megawatts by 2012 to meet demand from infrastructure projects like the metro.
June 16th, 2005, 04:25 AM
Canon To Build Y80bn Cartridge Plant In Japan
TOKYO (Nikkei)--Canon Inc. (7751) will invest about 80 billion yen to construct a state-of-the-art factory in southwestern Japan to produce cartridges and ink used in printers and copiers, The Nihon Keizai Shimbun learned Wednesday.
December 6th, 2005, 10:57 PM
More, more, more. 9 Billion more people WITH MONEY expected in next 50 years.....its going to literally take underground and skyscraper farms to feed the masses on equitable or even overconsuming level.
January 10th, 2006, 12:02 PM
pls post it here.. i need it for my homwork.. gomo arigato... :D
January 10th, 2006, 01:34 PM
Mitsubishi and Sumitomo are the biggest. I am not sure about the third.
January 10th, 2006, 03:30 PM
Mitsubishi and Sumitomo are the biggest. I am not sure about the third.
I think the list goes by as below..
Mitsubishi/UFJ ==> #1
Mizuho ==> #2
Mitsui/Sumitomo ==> #3
Correct me if I'm wrong. Cheers.
January 11th, 2006, 07:53 AM
I think the list goes by as below..
Mitsubishi/UFJ ==> #1
Mizuho ==> #2
Mitsui/Sumitomo ==> #3
Correct me if I'm wrong. Cheers.
January 11th, 2006, 08:36 AM
Bank of Mitsubishi Tokyo UFJ is such a ridiculously long name...
January 12th, 2006, 01:24 AM
＾Indeed. I bet they'll drop "UFJ" or "Tokyo" sooner or later.
January 12th, 2006, 03:46 AM
and thats the newest "World Larges Bank" after the merging, right?
January 15th, 2006, 11:49 AM
In terms of assets, it is.
January 15th, 2006, 09:44 PM
Do these banks have office towers? Maybe someone should post pics of their headquarters.
February 24th, 2006, 05:15 AM
Panel Urges TSE To Upgrade System More Flexibly, Consistency
24 February 2006
TOKYO (Nikkei)--In a bid to deal with the sharply increasing number of transactions, an advisory panel to Economic and Fiscal Policy Minister Kaoru Yosano calls on the Tokyo Stock Exchange to upgrade its computer system more flexibly and swiftly.
The panel also proposes the installation of a "simpler system" so that the TSE will be able to expand its capacity more easily.
The proposal, released by the Financial Services Agency on Thursday, will serve as the basis of discussion between the TSE and securities companies as they seek to improve the system and overhaul trading practices, according to FSA officials.
The officials said the panel will work out a timetable by the end of March with regard to a schedule for system development.
The proposal specifically calls on the TSE to raise its trading system's capacity in a timely, consistent manner in order to keep it above the maximum level of trading in preceding days, weeks or months.
Such flexible upgrading is not possible under the system the TSE is currently using. The nation's largest bourse plans to raise the system's daily capacity to 7 million transactions by the end of May, up from 5 million at present.
In another proposal, the panel calls on brokerages to refrain from stock transactions that may place a heavy burden on the trading system.
The proposal refers to the practice of taking buy and sell orders before the market opens and setting the day's opening stock prices when the orders match. This enables a massive amount of trading smoothly but also increases the number of transactions significantly right after the opening bell.
"The creation of a better system will require heavier costs for those concerned," the proposal states, suggesting that the TSE seek higher fees from securities companies for massive small-lot trading which may hinder the system's operation.
(The Nihon Keizai Shimbun Friday morning edition)
February 24th, 2006, 06:08 AM
Now Tokyo stock market is 3rd largest market...
Scandal makes it 3rd... only few month ago, Tokyo stock market was lager markect than NY, London....
Actually the computer system here is out of date.
But TSE seems to intend gradual change of them... even a lot of system engineers say that those process may need more money...
February 25th, 2006, 04:34 PM
I thought TSE is the second largest market after NYSE....
Nikkei 225 is surely the seond largest index after Down Jones...
March 1st, 2006, 02:03 AM
Tokyo bourse to boost capacity to 12 million orders
TOKYO, Feb 21, 2006 (AFP) - The Tokyo Stock Exchange on Tuesday unveiled a plan to raise the number of orders it can handle each day to 12 million in May from nine million now in the wake of a string of technical problems.
The TSE plans to further boost the number to 14 million orders a day by December in the upgrade, which will cost 3.2 billion yen (27 million dollars), the bourse in a statement.
The TSE will also boost the maximum number of stock trades its system can execute every day to seven million from five million, the stock exchange said, adding it might also drop its late afternoon start.
"We will consider a return to normal trading hours while watching moves of daily orders," the stock exchange said.
It has shortened its afternoon session by 30 minutes since January 19 after a scandal at Internet firm Livedoor sparked a stampede to exit the market that threatened to swamp the bourse's trading system and crash its computer system.
It was just the latest in a series of technical problems to beset Asia's largest bourse.
In November the TSE suffered its worst-ever system crash which paralyzed the exchange for most of the trading day.
The bourse's chief executive, Takuo Tsurushima, quit in December to take the blame for another incident in which a securities firm lost 330 million dollars when the slip of a trader's finger triggered a massive accidental sell order.
Japan's economic recovery and the popularity of online dealing by small investors has driven trading volumes to record levels in recent months.
April 6th, 2006, 05:38 PM
EU calls on Japan to remove investment obstacles
BRUSSELS, April 6 (Reuters) - The European Union called on Japan on Thursday to remove obstacles to foreign investment if it wanted to achieve its aim of doubling such inflows by 2011.
EU External Relations Commissioner Benita Ferrero-Waldner told an EU-Japan symposium in Brussels that confidence in Japan had returned and there were prospects for increased investment with its economy heading for a fifth straight year of growth.
She said that for much of this decade, the EU had been the main foreign investor in Japan, averaging 5.5 billion euros ($6.8 billion) in the years 2002-2004, while Japanese firms had invested 10 billion euros in the EU in 2004 alone.
However, she said obstacles to EU investment in Japan remained and the bloc had three concerns:
-- That foreign companies had to pay taxes on unrealised capital gains when undertaking mergers and acquisitions in Japan;
-- That foreign businesses had to undertake complicated triangular schemes involving a subsidiary in Japan when they merged with a Japanese firm;
-- That a new commercial code from next month would make some European companies doing business in Japan, but registered offshore, technically illegal.
"If the target for increasing foreign investment is to be met, issues like these must be addressed," she said.
Ferrero-Waldner said the requirement regarding mergers should be scrapped and the Commercial Code changed to reflect the legislators' intent "which was not to create legal uncertainty for foreign businesses".
She said Japan's stated aim to raise foreign investment to 2 percent of gross domestic product by 2006 from 1 percent when the country began restructuring was "still somewhat low".
"It is particularly important that this remains a key priority," she said, adding that the EU welcomed Japanese Prime Minister Junichiro Koizumi's pledge to double the level of investment again by 2011.
The commissioner also said that while Japan was the EU's main economic partner after the United States, the political relationship between the bloc and Tokyo had not kept pace with global challenges to democracy.
"Enhanced cooperation across the whole spectrum of current challenges will strengthen us both," she said, "whether in Central Asia, the Middle East and Africa, or on very specific subjects like energy and development issues, crisis management and the fight against terrorism."
Ferrero-Waldner said both the EU and Japan wanted China to embrace democracy and respect human rights and the EU had noted Japan's concerns about its neighbour's military spending and a possible lifting of an EU arms embargo on China.
"But it is also certainly in everybody's interest that relations between countries in the region improve and that regional cooperation be strengthened," she said in apparent reference to currently tense Sino-Japanese relations. ($1=.8141 euro)
April 9th, 2006, 04:48 PM
Japan To Begin Free Trade Talks With 6 Persian Gulf Nations
6 April 2006
TOKYO (Nikkei)--The Japanese government is expected to officially agree on Thursday to start free trade talks with six Persian Gulf nations.
The agreement is due to be sealed at a meeting here on that day between Prime Minister Junichiro Koizumi and Saudi Arabia's Crown Prince Sultan bin Abdulaziz.
Following the agreement, Japan and the Gulf Cooperation Council will likely hold a preparatory meeting in Riyadh, Saudi Arabia, in the latter half of May and start negotiations in July toward the goal of signing a free trade agreement in 2008.
The GCC consists of Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates. Crude oil exports from these nations account for 75% of Japan's intake.
The GCC now slaps 5% tariffs on most imports. Through free trade talks, the Japanese government hopes to lower that rate and help domestic businesses increase exports of automobiles and construction machinery. Tokyo is also expected to ask the GCC to ease restrictions on foreign companies in the fields of finance and telecommunications.
The GCC in turn is expected to ask Japan to reduce duties on petrochemical imports.
April 27th, 2006, 11:44 PM
TOYOTA reveals Lexus LS460 to the press at Roppongi Hills.
The new model is equipped with new 4.6L V8 engine mated with the world's first eight-speed automatic transmission. It is estimated to produce 380 horsepower and 370 lb.-ft torque.
May 2nd, 2006, 05:31 AM
its pretty ... i thought lexus are only sold overseas ...
and i thought 280hp is the limit in japan ...
it sure looks like a crossover of bentley and beamer 5 series ...
pretty funky ... looks like lexus is diversifying again ...
May 2nd, 2006, 06:36 AM
Gorgeous : O
July 2nd, 2006, 09:36 PM
The Yomiuri Shimbun, (Jul. 2, 2006)
Nissan Motor Co. and Renault SA are considering purchasing a significant stake in the world's largest automaker General Motors Corp., sources said Saturday.
Nissan Chief Executive Officer Carlos Ghosn, who also is the president of Renault, has expressed interest in acquiring a 20 percent stake in GM, after receiving a request from Tracinda Corp., one of the largest shareholders in GM.
If the deal is finalized, the three major automakers would bring about an alliance with an annual production of 15 million automobiles, or about 25 percent of the world market, and the outcome of the deal would have an enormous influence on the direction of global restructuring in the auto industry.
Tracinda, a U.S. investment firm led by renowned American investor Kirk Kerkorian, with a 9.9 percent stake in GM, made a proposal to Richard Wagoner, GM chairman and CEO, to seek a capital tie-up with Nissan and Renault, saying it would "enable GM to realize substantial synergies and cost savings," in a letter dated June 30.
Nissan and Renault, to whom Tracinda also sent letters, announced Saturday their alliance was an "open partnership" and "the alliance could be expanded further."
Nissan and Renault are seeking a full approval by the GM board and management before proceeding with the deal, and it may take some time until they reach a conclusion, in case GM shows reluctance about forming the alliance.
Ghosn met with Kerkorian in the United States in June, according to reports. Ghosn has shown interest in purchasing a total of 20 percent stake in GM, with Nissan and Renault each taking 10 percent, through a third-party allocation of newly issued shares.
Nissan has undergone major changes under the leadership of Ghosn, after it accepted a capital injection from Renault in 1999 to survive a financial crisis.
Nissan strengthened its ties with Renault even further in 2002 when it, in turn, bought a stake in Renault.
GM has been in trouble since last year, due to declining profits in its North America operation, and has declared a net deficit of more than 1 trillion yen in the fiscal year ending December 2005.
It has sold shares in its alliance partners including Fuji Heavy Industries Ltd., Isuzu Motors Ltd., and Suzuki Motor Corp., to help balance its books.
Tracinda has a seat on the GM board of directors and has exerted a strong influence over GM's recent decisions.
July 16th, 2006, 06:10 AM
Japan media welcome rate hike, call for careful navigation of economy
TOKYO, July 15, 2006 (AFP) - Japanese media welcomed Saturday the Bank of Japan's decision to end an era of zero interest rates and expressed hopes the central bank would carefully manage the economy.
"It was a natural decision amid sustained economic recovery as consumer prices show a steady year-on-year rise," the influential Nihon Keizai Shimbun business daily said in an editorial.
Without the rate rise, Japan risked overheating of capital investment and a continuing rise in consumer prices, while giving unfair support to the banking sector, it said.
"All in all, the decision was only reasonable and it was necessary to restart interest rate functions as the economy becomes healthier," it said.
The central bank on Friday decided to raise the key overnight call rate target by a quarter point to 0.25 percent, marking a return to a more normal monetary policy.
Because the Japanese economy has been "sick" for a while, the patient requires careful monitoring of its health as it recuperates, the Yomiuri Shimbun said in an editorial.
"What is most important is maintaining the health of the Japanese economy, which has just managed to rise from its sickbed after a protracted illness," it said.
The Bank of Japan first adopted the zero-rate policy in February 1999 to try to stop Asia's largest economy from falling into a deflationary spiral.
The bank temporarily increased its overnight call rate to 0.25 percent from zero percent in August 2000, when it believed the economy was recovering.
But the economy quickly reversed course and the bank was forced to drop the rate back to zero in March 2001 when it also introduced its unprecedented quantitative easing monetary policy.
The economy finally pulled itself out of lingering deflation, and the bank ended the policy of quantitative easing in March, followed by Friday's rate hike decision.
Major media cautioned that private banks might use the rate hike as an excuse to sharply raise the cost of borrowing for consumers.
They also warned that central bank governor Toshihiko Fukui must do his utmost to regain public trust after his reputation was tarnished by his association with a scandal-tainted investment fund.
But the rate hike decision, proposed by Fukui, should be regarded as "the first step toward normalizing the economy," the influential liberal Asahi Shimbun newspaper said.
Japan had to rely on the unusual zero rate policy because of years of a sluggish economy, weighed down by an ailing financial sector with massive bad loans, the Asahi said.
"We must not make the same mistakes of the past," it said, calling on the government and the central bank to study past policy mistakes that resulted in the protracted slump.
March 21st, 2007, 07:27 AM
It's common for most multinational companies to setup their Asia Pacific regional offices either in HK or in Singapore. Especially those coming from The United States or Europe.
What about Tokyo and what are some of the advantages and disadvantages of setting regional offices here?
March 21st, 2007, 07:47 AM
Hi, I think that there are many disadvantages and few advantages for Western companies in Japan.
Take a look at Vodafone for exemple: they came to Japan, they failed to keep in touch with a very difficoult and very advanced market, and they sold to a Japanese company (SoftBank).
Japanese market is a bit sophisticated (more than others): there is the problem of language (in HK and rest of Asia the business language is english), completely different way of work and the fact that many western companies doesn't understand very well the requests of Japanese people and market. I think that to do business in Japan is a very hard quest.
Not impossible, but very hard.
March 21st, 2007, 07:54 AM
there is the problem of language (in HK and rest of Asia the business language is english),
Indeed. The language barrier in Japan is immense. very few people speak English well, in contrast to Singapore or Hong Kong.
March 21st, 2007, 07:54 AM
Foreign companies tend to fail miserably in Japan.
If you mean as a base to expand to other parts of Asia then HK and Singapore are better choices, English speaking workforce, lower tax,important shipping and aviation hubs and greater access to growing Chinese market.
March 21st, 2007, 07:57 AM
My friend works at a NY based risk management group. HK is their head office for this region but have two other sub HQ.
Here's how they setup their office in the Asia Pacific and the countries they served.
Tokyo (HQ) - Japan, South Korea
HK (HQ) - HK, Mainland China, Taiwan, Philippines
Singapore (HQ) - Singapore, India, Malaysia, Sri Lanka, Thailand, Indonesia
March 21st, 2007, 08:15 AM
My friend works at a NY based risk management group. HK is their head office for this region but have two other sub HQ.
Here's how they setup their office in the Asia Pacific and the countries they served.
Tokyo (HQ) - Japan, South Korea
HK (HQ) - HK, Mainland China, Taiwan, Philippines
Singapore (HQ) - Singapore, India, Malaysia, Sri Lanka, Thailand, Indonesia
I think this is a very good planning. Japan and Korean markets maybe similar: many Jp companies are linked with South Koreans (think about electronics industry) and the language is a sort of derivate (although is very different).
But if you have the ability to make only one head office for Asian market, I thik that the best maybe Singapore or HK (taxation is a very important thing I forgot to mention before).
March 21st, 2007, 08:31 AM
Forgot, with the case of the Philippines, it is technically located in South East Asia. But because Manila is closer to HK, the company's offices in Manila report to HK than Singapore.
March 21st, 2007, 10:11 AM
Foreign companies tend to fail miserably in Japan.
If you mean as a base to expand to other parts of Asia then HK and Singapore are better choices, English speaking workforce, lower tax,important shipping and aviation hubs and greater access to growing Chinese market.
Hmm I must object to the many foreign companies failing to succeed. There are plenty of them making huge fortune. For example, P&G or my Canadian buddy's company.
But I still vote for Tokyo is not the ideal location to set up the quarter for asian operation of the business. Language is the barrier, I agree. And I want to add that Hong Kong people do have more sense of internationalism. Dont get me wrong. I proud myself as Japanese. Just that I can speak Mandarin and Cantonese. And I am currently in a Canadian university. After being tight with Chinese or Hong Kong people, i say their, especially HK, view to the world is much more advance than Japanese. I believe Tokyo will the headquarter location for operation in Japan for the foreign companies. But not for Asia.
March 21st, 2007, 11:03 AM
1.Tokyo (I think in future Hong Kong will be the most popular choice, for language, work environment, business culture, internationalization and law)
March 21st, 2007, 11:25 AM
1.Tokyo (I think in future Hong Kong will be the most popular choice, for language, work environment, business culture, internationalization and law)
Tokyo is not suited to be Asian center for global companies. Japanese are given to rejecting foreign capitalization.
And more and more Euro-Ameican companies are leaving Seoul. At the same time, Shangai has none effcet on Japan and S.Korea at all. And even Japanese big buisness would not choose Shanghai, risky tactic.
Thus, Hong Kong would be the best location. They have the history of colonial preference.
March 21st, 2007, 03:44 PM
There are way too many disadvantages.
Language barrier is one thing. To name a few other than that, the international airport is far from the city, the cost of living is fairly high, etc...
March 21st, 2007, 04:38 PM
The role of Japan in Asia is very different, hence it is not suitable to compare Tokyo's headquarters advantages with either Hong Kong or Singapore.
Japan is a huge mature market in itself. Due to its unique cultural characteristics and language barrier, they are often set out on their own. Morgan Stanley, for example, has Asia ex Japan indices due to a lack of comparability. Hence, Japan is best distinguished as its own subsidiary.
The rest of Asia is a whole different story. The markets are much smaller, and hence will have to do with reporting to a regional office.
That being said, Japan's historic economic centre has been in Kansai, which includes Osaka.
Is Tokyo an ideal place for an Asia Pacific headquarters? Depends on what the business wants. It's not a definitely or no way answer. If people think it's a matter of a center point for governing a huge, diverse market, then they should do a little more homework to understand the economics and politics of the region.
March 21st, 2007, 05:12 PM
Hong Kong also follows the Anglo tradition of common law, which IMO is the best for business. China S Korea and Japan all have laws that are rooted from continental civil law.
March 25th, 2007, 01:24 AM
The Asia-Pacific region is probably too large and diverse for one regional HQ, and given the sheer size of the Japanese market many companies feel they need to have a presence here whether they have a large share of that market or not.
Tokyo's disadvantages have already been mentioned here: high overheads, greater language barrier, ridiculously distant airport and the local notion that 'Japan is unique' all make life difficult for foreign companies. But it is impossible for business to ignore Japan's large and wealthy population and level of technological advancement. Any business who doesn't have a HQ here would be seen to be ignoring the Japanese market, which is bad press.
March 25th, 2007, 04:15 PM
There is a problem with this poll.
Are you referring Tokyo (as a stand-alone city in itself) or are you referring to Tokyo as a generalization for the entire Japan?
Remember, there are some people that equate Tokyo = Japan so it's important to be specific on this.
So, we go back to the question: Which "Tokyo" are you referring to?
April 30th, 2007, 04:15 AM
The business practices of Japan is completely different and market demands for quality is possibily the most rigorous on this planet.
So I would not think Tokyo or Japan in general would be the idea location to place the regional HQ but I think it would be the best place to do test marketing and/or product analysis. Most products that were successful in the Japanese market proved to be successful anywhere around the globe.
April 30th, 2007, 02:16 PM
June 13th, 2007, 01:25 PM
The Wall Street Journal
TOKYO -- Matsushita Electric Industrial Co.'s protracted effort to sell its Victor Co. of Japan unit highlights the difficulties of restructuring Japan's overcrowded electronics industry.
Matsushita had been in discussions to sell its 52.4% stake in the company, known as JVC, to U.S.-based TPG (the former Texas Pacific Group) over the past several months. But after talks broke down, Matsushita is now negotiating with Kenwood Corp., another Japanese electronics maker, a person familiar with the situation confirmed.
A sale of JVC has long been expected to be the first among several deals involving smaller electronics companies, which have been weakened by tough competition from larger rivals as well as from Chinese and Taiwan companies that can make products cheaper and faster.
There are no fewer than a dozen electronics firms in Japan, ranging from giants like Sony Corp. to smaller companies such as JVC, Pioneer Corp. and Kenwood. In addition, industrial conglomerates including Hitachi Ltd. and Toshiba Corp. also have consumer-electronics divisions.
Analysts say the slow pace of discussions over JVC's fate underscores the reluctance in the industry to embrace mergers and acquisitions, especially when they involve handing control to a foreign investment fund or rival company.
"Everybody knows there are too many players in the industry...but the fact that JVC's talks are encountering difficulties means there's resistance," said Tatsuya Mizuno, an industry analyst for Fitch Ratings. "I didn't think this would take so long," he said, adding that JVC's acquisition was supposed to help pave the way for a badly needed industry consolidation.
The industry's biggest restructuring deal in recent history has been the $2.6 billion bailout of Sanyo Electric Co. by a consortium led by Goldman Sachs Group Inc. early last year. But even Goldman Sachs ran into resistance within the company that made it difficult to make big management changes until this past March.
Like Sanyo, JVC, which is best known for inventing the VHS video-tape standard, has been hurt by price competition in products such as flat-screen television sets from companies like Samsung Electronics Co., Sharp Co. and even parent Matsushita. Its results have weakened sharply over the past four years. For the year ended March 31, it posted a net loss of 7.9 billion yen ($64.9 million), its third straight loss. The company expects another loss this business year.
JVC is one of the last unprofitable areas for Matsushita, which has recently undertaken a significant restructuring. But despite interest from potential buyers, Matsushita initially balked at inquiries, reluctant to sell a longtime partner. While the recent talks with TPG mainly broke down over price, according to a person familiar with the situation, industry watchers say they also believe there was general reluctance to sell the business to a non-Japanese company.
Merging JVC with Kenwood would be a safer option for Matsushita and JVC because it likely wouldn't involve the kind of drastic restructuring that a foreign investment fund would require. But analysts say there are few synergies with Kenwood, which competes in the specialized business of car audios and navigational devices. Kenwood, which is smaller than JVC in terms of revenue, is struggling itself after posting a 75% drop in profit because of price competition in the audio business.
Still, analysts say they hope Matsushita will reach a decision about its unit before JVC's shares decline further. JVC's shares have lost nearly a quarter of their value over the past year. They fell 4.9% to 423 yen ($3.47) each yesterday on the Tokyo Stock Exchange as investors worried that a deal with Kenwood would involve issuing new shares, which would dilute the stock.
Matsushita, TPG, Kenwood and JVC all declined to comment.
June 14th, 2007, 11:28 PM
The japanese electronics industry needs more consolidation, even with economic recovery.
Mergers or adquisitions between similar companies are the best option. I hate those heartless investment funds.
July 25th, 2007, 07:33 AM
TOKYO (Nikkei)--Mitsukoshi Ltd. Japan's fourth-largest department store operator, and fifth-ranked Isetan Co. will step up efforts to reach an agreement by the end of August to set up a holding company by the fiscal year-end, with an eye toward eventually integrating their operations under the firm, sources at the companies said Wednesday.
management integration of Japanese giant department stores
Seibu (hq: Ikebukuro, Tokyo) + Sogo (hq: Osaka)
Hankyu (hq: Osaka) + Hanshin (hq: Osaka)
Daimaru (hq:Osaka) + Matsuzakaya (hq: Nagoya)
Mitsukoshi (hq: Nihonbashi, Tokyo) + Isetan (hq: Shinjuku, Tokyo ) + Tokyu (hq: Shibuya, Tokyo)
August 1st, 2007, 08:23 PM
Japan Retailer Tops Barneys Bid
(The Wall Street Journal)
Fast Retailing Co., Japan's largest mass-market clothing retailer, said it made a bid to acquire Jones Apparel Group Inc.'s Barneys New York Inc. business for $900 million, topping an existing sale agreement and illustrating the Japanese company's ambitions to expand overseas.
Uniqlo Barneys Buyout
Japan-based Fast Retailing Co., owner of casual clothing chain Uniqlo, the Gap of Japan
Barneys New York is a chain of upscale department stores.
August 1st, 2007, 10:58 PM
I recently went to the Uniqlo in SoHo... Probably the nicest Uniqlo I've been to but the prices were about 1.5 to 2 times higher (which is expected for a SoHo store I guess).
August 2nd, 2007, 06:29 AM
I recently went to the Uniqlo in SoHo... Probably the nicest Uniqlo I've been to but the prices were about 1.5 to 2 times higher (which is expected for a SoHo store I guess).
Boy! Uniqlo should be the cheapest clothing retailer as it is in Japan. (but yet, the quality of the clothing in Uniqlo is much better than Gap or Zara, IMO.)
September 27th, 2007, 06:21 PM
Japan ports struggle to attract container ships
TOKYO, Sept 27 (Reuters) - Japan is taking steps to attract more container ships to its shores, driven by concerns that the waning fortune of its ports could hurt the country's economy and industries.
Over the past decade, an increasing amount of goods from Japan have been sent to a neighbouring Asian trans-shipment hub, such as the South Korean port of Pusan, instead of being shipped directly to their destination, adding to time and costs.
Ken Abe, a deputy director at Japan's Ministry of Land, Infrastructure and Transport, said given Japan's expensive distribution costs, the move made sense if goods were being moved from areas on the coast facing South Korea.
"The trouble is that even large Japanese ports like Tokyo, Yokohama, Nagoya, Osaka and Kobe ... are facing the same problem despite the fact that it should be more efficient to ship goods directly from there," Abe said.
Trans-shipment of goods from Japan rose to 15.5 percent in 2003, up from 2.1 percent in 1993, official data showed.
Alarmed by the situation, Japan in 2004 launched a long-term project to expand and improve port efficiency.
Japan has about 60 container ports but the project, according to industry sources, calls for concentrating on three regional ports.
These are Tokyo-Yokohama, Nagoya-Yokkaichi and Osaka-Kobe, with some 52.4 billion yen earmarked for the year ending March 31, 2008 alone for improvement measures, up 37.5 percent year-on-year.
The measures include steps to trim the time needed for goods to be unloaded and moved through customs from the current roughly three days to one day, putting it on a par with Singapore.
It also hopes to cut handling costs by about 30 percent, which would make it about equal to Pusan and Taiwan's Kaohsiung.
Steps are also being taken to improve shallow port drafts.
Tokyo, Japan's top container port in volume, is due to have three ports with a draft of 15-16 metres to accommodate the world's large vessels.
An official at the Tokyo harbour authority said work on the first of the three ports started in April but won't be finished until around 2013 or 2014.
Japan's ports have been eclipsed by their Asian rivals, worrying Japanese industries, although many have moved production centres overseas due to lower costs.
Makoto Yashiki, president of Sony Supply Chain Solutions Inc, said it was very inconvenient to have less ships coming to Japan. The firm handles the Sony Corp group's distribution.
"Just 10 years ago, Japan was a country founded on trade ... there is no doubt now that its ports are languishing," he said.
Abe said that though it was often more expensive to move cargoes to the region's trans-shipment hub, shipping firms often chose to absorb the added cost to remain competitive, but the threat that costs of goods could rise remained.
"Japanese ports have become feeder ports ... and they are increasingly no longer a port of call for large ships or on the main shipping routes," he said.
In contrast to Tokyo, Singapore, Hong Kong and Shanghai, have blossomed to become the world's top three ports in terms of container volume handled.
Tokyo was ranked 23rd, according to a 2006 data by Containerisation International. Pusan was 5th.
This compares with 1980, when Kobe, Japan's western port city, was the world's fourth-largest container port. A devastating 1995 earthquake, which killed more than 6,400 people and caused damages estimated at $100 billion, has been blamed for its decline.
Sony's Yashiki said it would be more effective if Japan were to concentrate its efforts on one port, following South Korea's example.
"We only need one super port," Yashiki said.
March 20th, 2010, 04:34 AM
Dollar trades in mid-90 yen range in Tokyo
TOKYO, March 19 (PNA/Xinhua) -- The U.S. dollar traded in the mid- 90 yen range early Friday in Tokyo, slightly up from its levels in overnight in New York.
At 9 a.m., the dollar fetched 90.48-53 yen compared with 5 p.m. Thursday quotes of 90.32-42 yen in New York and 90.04-05 yen in Tokyo.
The euro was quoted at 1.3611-3613 dollars and 123.16-17 yen versus 1.3602-3612 dollars and 122.97-123.07 yen in New York and 1. 3652-3653 dollars and 122.93-97 yen in Tokyo late Thursday. (PNA/Xinhua)
March 24th, 2010, 08:31 AM
Japan's February exports jump 45.3% on year
TOKYO, March 24 (PNA/Kyodo) -- Japan's exports jumped a year-on-year 45.3 percent in February to 5, to 128.67 billion yen, the third straight monthly expansion, adding to signs that the nation's gradual economic recovery has been driven by growing demand from the rest of Asia and the United States, Finance Ministry data showed Wednesday.
Exports to all regions turned positive for the first time since August 2007, the ministry said, adding that the growth rate is the third largest on record.
Imports rose for the second straight month, up 29.5 percent to 4,477.69 billion yen, registering the biggest growth since February 2006, the ministry said in a preliminary report.
As a result, Japan's trade surplus stood at 650.98 billion yen, up 818.8 percent -- the second largest on record.
Exports to China widened for the fourth consecutive month, up 47.7 percent to 902.42 billion yen, with demand for passenger cars, auto parts and high-tech devices strengthening.
Imports from China, Japan's No. 1 trading partner, grew for the first time in 16 months, up 54.3 percent to 926.98 billion yen, partly because shipments of clothing expanded for the first time since last March.
With its Asian neighbors, Japan's exports rose 55.7 percent to 2,775.59 billion yen, as more semiconductors and electronic components were shipped to such economies as Taiwan and Malaysia.
To the United States, exports increased for the second month running, up 50.4 percent to 837.07 billion yen, as shipments of cars in terms of value ballooned a record 129.9 percent from a year ago.
Finance Ministry officials said the latest figures show that Toyota Motor Corp.'s recall problems did not lead to a slowdown in exports of Japanese cars and other manufactured products to the U.S. market.
However, they noted that the record growth in auto shipments is attributable to a favorable year-on-year comparison.
Yuichiro Nagai, economist at Barclays Capital Japan Ltd., said a notable rise in exports to the United States is a promising sign for the Japanese economy.
"The rise made up for slightly weaker shipments to China, which had a shorter business-day period in February due to the Lunar New Year holiday," Nagai said.
Looking ahead, Nagai said Japan's exports are likely to recover at almost the same pace for the rest of 2010.
In February, Japan's exports reached about 70 percent of their peaks before the economic crisis took a heavy toll on almost all kinds of businesses.
Shipments to the European Union rose for the third straight month, up 19.7 percent to 588.02 billion yen. Imports grew for the first time in 17 months, up 7.3 percent to 422.08 billion yen, with more pharmaceutical products and cars entering the Japanese market.
By region, exports to the Middle East, Central and Eastern Europe, and Russia turned positive in the reporting month for the first time in many months, according to the ministry.
Trade figures are measured on a customs-cleared basis before adjustments for seasonal factors. (PNA/Kyodo) http://www.pna.gov.ph/index.php?idn=3&sid=&nid=3&rid=266127
March 24th, 2010, 12:49 PM
Japan's exports log fastest rise in 30 years
TOKYO (March 24) - Japan's exports soared at the fastest pace in about three decades last month, helping the world's number two economy to extend a recovery from the worst recession in decades, data showed Wednesday.
Worldwide demand for Japanese cars, electronics and other goods is rebounding after collapsing during the global economic crisis which erupted in 2008.
Exports in February leapt 45.3 percent to 5.13 trillion yen (56 billion US dollars), the fastest year-on-year growth since April 1980, according to the finance ministry.
While exports are still about one quarter lower than their level two years ago, the picture has brightened significantly compared with February 2009, when shipments roughly halved from a year earlier.
"Exports, the driving force of a recovery in Japanese corporate earnings, have maintained their steam," said Naoki Murakami, chief economist at Monex Securities.
"The momentum in the global economic recovery is becoming stronger thanks to a US rebound since late 2009," which followed upturns in the Chinese and other Asian economies, Murakami wrote in a note.
Last month Japan's trade surplus surged more than nine-fold to 651.0 billion yen (7.2 billion US dollars) from 70.8 billion a year earlier, topping market expectations.
Shipments of automobiles more than doubled despite the safety woes of Toyota Motor, which has recalled more than eight million vehicles worldwide.
Auto part exports rose 121.7 percent while electronics components were up 69.1 percent.
Imports increased 29.5 percent to 4.48 trillion yen owing to higher prices of oil and nonferrous metals.
Japan's surplus with the United States surged 173.0 percent to 395.9 billion yen and with the European Union it rose 69.9 percent to 165.9 billion yen.
With China, Japan's biggest trading partner, the trade balance slipped into a deficit of 24.6 billion yen from a year-earlier surplus of 10.6 billion yen.
Japan's exports to China grew 47.7 percent on robust shipments of cars and parts but imports rose by a brisker 54.3 percent due to increased purchases of clothing, audio and video devices, computers and other electronic equipment.
The Japanese economy is still relatively weak but domestic demand has been somewhat resilient helped by a recent slight upturn in wages, said Takeshi Minami, economist at Norinchukin Research Institute.
"As long as China's economy grows healthily, Japan will keep benefiting," Minami said. "On the other hand, China's credit-tightening policy, if excessive, could pose risks to Japanese exports."
Japan's economy plunged into its most severe post-war recession in 2008, with its heavy dependence on foreign markets making it one of the worst affected by the global economic downturn.
It returned to growth in the second quarter of 2009 but the recovery remains fragile with falling consumer prices, high public debt and weak domestic demand all major concerns for policymakers.
Toyota's US sales in February of this year dropped 8.7 percent but "exports of automobiles and auto parts from Japan to the United States were not affected," said Minami.
"Now that the recall problem seem to be easing, it is unlikely to have a big impact on Japanese exports in the future," he said. http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/1045515/1/.html
March 25th, 2010, 04:45 AM
Price of Japan's corporate services down 1.3 pct on year in February
TOKYO, March 25 (PNA/Xinhua) -- The price of corporate services in Japan fell 1.3 percent in February compared with the same month of previous year, according to data released by the Bank of Japan (BOJ) on Thursday.
Prices of corporate services have seen year-on-year declines now for more than 18 months, and in February, the index stood at 97.4, where 100.0 marks the average prices in 2005.
On a monthly basis, prices increased by 0.1 percent, after declining by 0.4 percent in January.
Contributing to the monthly rise in prices in February were advertising services and information and communications, while transportation, real estate and finance all saw prices drop slightly over the month.
The fall in corporate services prices will contribute to growing concerns in Japan that the fall in prices may harm the nation's fragile economic recovery. While increases in exports, a growth in positive sentiment and robust production signal the recovery is strengthening, prices in the domestic market continue to fall.
Minutes released earlier in the week from a BOJ meeting in February showed that some members of the board at the bank are concerned that the decline in prices may have a negative impact on the economy.
Finance Minister Naoto Kan has pushed the bank to do more to tackle falling prices. (PNA/Xinhua) http://www.pna.gov.ph/index.php?idn=3&sid=&nid=3&rid=266305
Dollar at lower 92 yen in Tokyo
TOKYO, March 25 (PNA/Xinhua) -- The U.S. dollar changed hands at the lower 92 yen level early Thursday in Tokyo.
The dollar bought 92.00-03 yen at 9 a.m., against 92.26-36 yen in New York and 90.64-65 yen in Tokyo at 5 p.m. Wednesday.
The euro was quoted at 1.3329-3330 dollars and 122.63-68 yen, compared with 1.3310-3320 dollars and 122.88-98 yen in New York and 1.3426-3428 dollars and 121.70-74 yen in Tokyo late Wednesday. (PNA/Xinhua) http://www.pna.gov.ph/index.php?idn=3&sid=&nid=3&rid=266299
March 29th, 2010, 03:37 PM
JBIC to channel up to US$ 300M to finance Japanesse businesses in Asean
KUALA LUMPUR, March 29 (PNA/Bernama) -- The Japan Bank of International Cooperation (JBIC) sealed a long-term US$ 300 million facility with CIMB Group Holdings Bhd today to finance the small-and-medium enterprise (SME) businesses of Japanese companies across Asean minus Singapore.
CIMB Group will disburse the funds for the JBIC Asean facility which is aimed at providing funding stability and financial support not only to Japanese companies but also, and mainly to, domestic companies that have business dealings with Japanese firms in all developing Asean countries.
The fund, available for sectors across the board, is available in both local and foreign currencies, is expected to largely flow into Indonesia due to the current dynamics and its growth outlook, said CIMB Group Chief Executive Datuk Seri Nazir Razak who witnessed a signing ceremony between both parties here Monday.
Also present were JBIC Resident Executive Officer for Asia and Oceania Ryuichi Kaga, Japanese Ambassador to Malaysia Masahiko Horie, CIMB Niaga President Director Arwin Rasyid and CIMB Thai's Chief Executive Officer Subhak Siwaraksa.
"We believe the JBIC Asean Facility comes at an opportune time as Asean businesses are looking to expand and as governments gradually phase out pump priming measures in order for economic growth to be driven by the private sector," he said.
However, Nazir also said the facility was not to fund big projects as the largest fund size for a company is anticipated to be around US $ 25 million.
"JBIC's intention is to provide access to funds for companies that are less able to access funds and not for the big corporates," he said, adding that the facility was the largest facility provided to a commercial financial institution.
It is also the fifth to be channeled directly to businesses across the entire region via a single banking group.
"Through CIMB Group's position as the leading universal bank in the Asean region, JBIC will expand its access and offer facilities, albeit, directly to local companies through Asean countries," said Kaga.
There are more than 1,400 Japanese firms operating in Malaysia and approximately 10,000 Japanese live in the country. (PNA/Xinhua)http://www.pna.gov.ph/index.php?idn=3&sid=&nid=3&rid=267057
March 29th, 2010, 06:44 PM
Japan retail sales rise 4.2 percent in February
TOKYO (AP) -- Japan's retail sales jumped for the second straight month in February, offering a sign the country's economic recovery is broadening to households.
Sales rose 4.2 percent from a year earlier, driven by higher demand for cars, energy and machinery, the Ministry of Economy, Trade and Industry said Monday. Retail sales rose 2.3 percent in January from a year earlier.
But the gains may not mean that demand is strong enough to reverse dangerous deflationary pressures. The country's core consumer price index fell 1.2 percent in February from a year earlier for the 12th consecutive month of decline.
Before January, retail sales had declined for 15 straight months as the world's second biggest economy struggled to emerge from its worst recession since World War II.
Robust export demand from emerging economies like China is helping Japan grow again but the recovery has been slow to reach workers and families as companies continued to cut costs.
In January, wage declines decelerated and the unemployment rate fell to a 10-month low of 4.9 percent. Growing consumer confidence unexpectedly pushed up retail sales 0.9 percent from a month earlier.
Large-scale retailers, which includes supermarkets and department stores, did not fare as well. Sales fell 4 percent from the previous year after adjusting for a change in the number of stores.
(Mainichi Japan) March 29, 2010
March 30th, 2010, 06:29 AM
Nearly 270,000 contracted workers to lose jobs by June in Japan
TOKYO, March 30 (PNA/Xinhua) -- A March survey released by the Labor Ministry in Japan on Tuesday showed that 269,790 non-permanent workers are expected to lose their jobs from October of last year to June.
The survey shows the number of noncontracted workers, known as "hakken" in Japanese, has increased by 7,192 compared to the previous month.
Aichi Prefecture, where the head office of Toyota Motor Corp. is based, is expected to see 44,525 non-permanent workers lose their jobs over the period, the highest among all the areas of the country. Tokyo expects to lose 15,932 non-contracted workers, and both Nagano and Shizuoka prefectures are also expect to see job losses of more than 10,000.
An official with the ministry expressed concern that a large number of non-contracted workers were expected to lose their jobs in March, the end of Japan's financial year when firms look to balance their books for 2010.
The plight of non-contracted workers has become a symbol of the recent economic downturn in Japan, after thousands were left in shelters for the New Year of 2008, when conditions worsened in the aftermath of the collapse of Lehman Brothers.
The Democratic Party of Japan (DPJ) campaigned last summer on a pledge to "stabilize the employment of temporary workers," and earlier in the month, the cabinet, led by Prime Minister Yukio Hatoyama, decided to put forward a bill banning the hiring of such employees at manufacturing companies.
The bill has been criticized by some analysts, but is in line with the party's objective of seeing a Japan in which more focus is given to social security than short-term profits.
Other employment data released Tuesday showed that the number of unemployed remained stable in February at 4.9 percent, while the ratio of job offers to job seekers stood at 0.47, its highest level since April last year. (PNA/Xinhua) http://www.pna.gov.ph/index.php?idn=4&sid=&nid=4&rid=267164
April 1st, 2010, 12:03 PM
Japan's business sentiment improves for fourth consecutive quarter
TOKYO, April 1 (PNA/Xinhua) -- Business confidence among major Japanese manufacturers improved for the fourth straight quarter during the three months through March from the previous quarter, the Bank of Japan (BOJ) said on Thursday.
The headline figures improved for the fourth straight quarter, but a negative reading still shows more Japanese companies are pessimistic than optimistic, the BOJ's highly watched Tankan survey revealed.
The index of big makers' sentiment came to minus 14, up 11 points from minus 25 booked in the quarterly survey released in December.
Major non-manufacturers' confidence stood at minus 14, up from minus 21 in the previous quarter, the Japan's central bank revealed.
The March Tankan also showed that large companies in both manufacturing and non-manufacturing sectors plan to cut their capital expenditures by 0.4 percent this new fiscal year, better than analysts' consensus estimate for a cut of around 0.8 percent.
The survey covers thousands of Japanese companies with a specified minimum amount of capital, although firms deemed sufficiently influential may also be included. The companies are asked about current trends and conditions in the business place and their respective industries as well as their expected business activities for the next quarter and year. Once the Bank of Japan has conducted their survey, the results are used to direct optimal monetary policy.
In November last year, sentiment on the economy dropped by the highest margin in history amid difficult conditions that saw deflation start to take hold and prompted the government and the BOJ to implement a series of measures to try to stimulate spending and business investment. (PNA/Xinhua) http://www.pna.gov.ph/index.php?idn=3&sid=&nid=3&rid=267524
April 2nd, 2010, 08:12 AM
Japan's monetary base rises for 19th successive month in March
TOKYO, April 2 (PNA/Xinhua) -- Japan's monetary base rose 2.1 percent in March from a year earlier, marking the 19th successive month of increase, said the Bank of Japan (BOJ) in a report on Friday.
According to the central bank the average daily balance, comprised of both cash in circulation and the balance of current account deposits held by financial institutions at the BOJ, totaled 96.46 trillion yen (1.27 trillion U.S. dollars).
Additionally, the current account deposit balance rose 13.0 percent to 15.13 trillion yen (161.22 billion U.S. dollars).
The balance of BOJ bank notes in circulation increased 0.4 percent to 76.82 trillion yen (818.59 billion U.S. dollars), although the balance of coins in circulation decreased 0.6 percent to 4.50 trillion yen (47.95 billion U.S. dollars), the BOJ said.
Prime Minister Yukio Hatoyama's government has applied mounting pressure on the central bank to bring an end to consumer- price declines this year and Finance Minister Naoto Kan has repeatedly urged the BOJ to step up its efforts to defeat deflation, which threatens to erode corporate earnings and make outstanding corporate debt harder to pay off.
Subsequently the central bank has been injecting more liquidity into the financial system as a means to combat increasing deflation.
However, signs of a sustained economic recovery in Japan, including the central bank's Tankan survey Thursday which showed big manufacturers have become less pessimistic about business conditions, may be enough for BOJ Governor Masaaki Shirakawa to put off any decision to increase the central bank's liquidity injections until the next BOJ policy meeting at the end of the month.(PNA/Xinhua) http://www.pna.gov.ph/index.php?idn=3&sid=&nid=3&rid=267651
April 3rd, 2010, 12:36 AM
I have renamed this thread to include business :)
April 3rd, 2010, 12:46 AM
Toyota sales booming despite global recalls
TOKYO (AP) -- Toyota sales are booming in Japan, up a hefty 50 percent last month, shrugging off any fallout from massive global recalls.
Toyota Motor Corp. sales in Japan totaled 204,514 vehicles, up from 135,700 the same month last year, for the eighth straight month of on-year rise, the Japan Automobile Dealers Association said Thursday.
Japan's auto sales have been recovering, with sales jumping 10 percent in the year ending in March from the same period a year earlier to 3.2 million vehicles, according to the group. It said that was the first year-on-year increase in seven years.
Sales have gotten a lift from government tax breaks and incentives for fuel-efficient vehicles, helping a recovery from a sharp slowdown the past year.
Overnight, Toyota Group Vice President Bob Carter told The Associated Press that Toyota's U.S. sales surged 40 percent in March, as the automaker offered its biggest incentives ever, including zero-percent financing on models that previously were subject to recalls, low-priced leasing and free maintenance.
Automakers are scheduled to report March U.S. sales on Thursday. Toyota's sales fell 9 percent in February while the broader industry's climbed 13 percent.
Toyota has been fighting to regain its once-sterling reputation for quality after recalling more than 8 million vehicles around the world starting in October for faulty gas pedals, defective floor mats and braking software glitches.
Toyota President Akio Toyoda headed a meeting of quality officials from around the world at the company's headquarters Tuesday to speed up communication on consumer complaints and beef up training of quality professionals.
Toyota's brand power has been relatively unscathed in Japan because the only recalls here have been for the braking problem.
Panasonic sees extra profit boost from Sanyo -Nikkei
TOKYO, April 1 (Reuters) - Japan's Panasonic Corp's (6752.T) purchase of Sanyo Electric (6764.T) is set to boost profits more than expected as they now plan additional cost savings by merging their accounting systems and procuring materials together, the Nikkei business daily said.
Panasonic, the world's largest plasma TV maker, now expects an operating profit boost in the year beginning April 2012 of 100 billion yen ($1.1 billion), 20 billion yen more than its initial estimate, it said.
This number could be bigger if the consolidation of manufacturing sites for household appliances proceeds well, it added.
Panasonic in December acquired a majority stake in Sanyo, the world's largest rechargeable battery maker.
A Panasonic spokesman said officials from the two companies are still discussing specific steps to create synergies, and it is too early to update its previously projected profit-boosting effect.
Panasonic is set to announce a business strategy plan including the integration of the two companies' operations in early May, when it releases its annual earnings results.
With Sanyo offering solar cells as well as lithium-ion batteries, and Panasonic making fuel cells, the new Panasonic group is well positioned to take advantage of growing demand for renewable energy-related products and services.
Shares in Panasonic rose 0.2 percent to 1,433 yen, underperforming the Tokyo stock market's electrical machinery index .IELEC.T, which gained 1 percent. (Reporting by Bijoy Koyitty in Bangalore and Kiyoshi Takenaka in Tokyo; Editing by Edwina Gibbs)
Mitsubishi to refocus on energy, environment
Mitsubishi Electric Corp. will increase its stake in environmental and energy fields, starting by doubling its investments in energy-efficient power semiconductors this fiscal year, according to Kenichiro Yamanishi, the new president and CEO.
Yamanishi, 59, a former senior executive officer, took up the post Thursday, succeeding Setsuhiro Shimomura, who became chairman.
Power semiconductor devices, used to optimize energy use in power-control systems, are one of Mitsubishi Electric's core products. They are widely used in various electronic devices, such as computers, home appliances, hybrid vehicles and trains.
Yamanishi said in a recent interview with The Asahi Shimbun that the company will channel about 10 billion yen ($107 million) into this key area in fiscal 2010, which began Thursday.
Annual sales of products incorporating power semiconductor devices come to about 700 billion yen, accounting for about 20 percent of Mitsubishi's group sales.
Yamanishi is no stranger to playing a leading role in strengthening Mitsubishi's power-chip business, having previously headed up the company's Semiconductor & Device group.
"We will pursue the development of next-generation power semiconductor devices that have greater power-saving functions," he said.
Mitsubishi has maintained its TV business as a "face of home appliances" despite its single-digit share in the domestic market and sales results often in negative territory. But the company expects profits from TV sales in the 2009 business year, he said.
"Rather than pursue a greater sales volume or share, we will differentiate our products by adding special features," Yamanishi said.
Like other electronics makers, Mitsubishi has its eye on overseas markets, especially in emerging economies.
"For the past 10 years or so, (Mitsubishi's overseas push) has lagged behind those of South Korean rivals and others," Yamanishi admitted.
He said Mitsubishi will raise the proportion of its overseas sales overall from the current 30 percent to more than 40 percent at an early date.
Yamanishi said the company will strengthen its efforts to sell electronic parts and equipment for trains in China and India. It plans to double overseas sales of electric motors and other railway products by fiscal 2015 from 40 billion yen in fiscal 2008.
A sharp growth in demand is expected abroad in projects to build social infrastructure, such as railways and power generation plants.
Mitsubishi also started building a new plant to produce turbine generators in Kobe in February. About 70 percent of Mitsubishi's turbine generators are made for export.
April 4th, 2010, 08:01 AM
Toyota's U.S. new car sales surge 40.7% / March figure claws back market share
NEW YORK--New car sales in the United States by recall-hit Toyota Motor Corp. in March soared 40.7 percent from the same month last year as the company regained its second-largest market share for the first time in three months, a U.S. research firm announced.
With sales of 186,863 units, Toyota posted a market share of 17.5 percent, up 4.7 percentage points from the previous month, surpassing Ford Motor Co. and closing in on General Motors Co. by just 0.1 percentage point, according to Autodata Corp.
Compared with its sales in February, when Toyota suffered an 8.7 percent decline year-on-year following the massive recall of its vehicles for accelerator problems, the automaker's sales rose by nearly 90 percent in March, and the company can now expect to put behind it fears its U.S. sales would be negatively impacted.
Toyota's sharp recovery is believed attributable to its aggressive, incentive-laden sales campaigns since March, featuring up to 60 months of interest-free auto loans and two years of complementary after-sales maintenance.
Negative consumer perceptions of recall-hit Toyota vehicles apparently have lessened, partly because of the favorable media response to Toyota's efforts to mend its tarnished brand image.
Meanwhile, GM said its new U.S. car sales in March rose 22 percent to 188,011 units, while Ford posted sales of 178,188 units, up 42.8 percent.
Among Japanese automakers, Honda Motor Co.'s sales rose 22.5 percent to 108,262, to earn the fourth-largest U.S. market share of 10.2 percent. It was followed by Nissan Motor Co., whose sales rose 43.3 percent to 95,468 units, ranking fifth in market share.
Chrysler Group LLC, now under corporate reconstruction, saw its sales decline by 8.3 percent, its first year-on-year sales decline in two months.
New car sales in the U.S. market as a whole rose 24.3 percent from a year earlier to 1,066,205, posting a double-digit increase for the second month in a row.
On an annualized basis, March's overall U.S. sales totaled 11.78 million, the second largest after August, when sales on an annualized basis reached 14.09 million. The latest figures show a definite recovery in new U.S. auto sales.
Electric vehicle price war erupts
The first shots have been fired in a price war in the electric vehicle market.
Nissan Motor Co.'s announcement Tuesday that its Leaf electric vehicle will sell for less than 3 million yen after factoring in a government electric vehicle purchase subsidy triggered an almost immediate retaliatory strike from rival Mitsubishi Motor Corp.; a hefty cut in the price of its i-MiEV.
The electric vehicle market has become a battleground that will likely see plenty more action as the cars become more popular. "EVs are no longer vehicles of the future. They're just ordinary cars," Nissan Senior Vice President Takao Katagiri declared proudly Tuesday morning at a press conference at Nissan headquarters in Yokohama.
The Leaf is priced at 3.76 million yen, but a customer will actually only pay 2.99 million yen once the scheduled government subsidy is included.
The figure sent alarm bells ringing at MMC, which urgently called an executive meeting the same day and decided to cut the i-MiEV price by 619,000 yen to 3.98 million yen. MMC executives were concerned that potential i-MiEV purchasers could be tempted to instead wait until the cheaper Leaf goes on sale in December. The timing of Nissan's announcement could not have been worse for MMC, which was to start marketing the i-MiEV on Thursday to individual clients.
MMC last year started leasing and selling the i-MiEV to central and local government offices, as well as private companies.
The price of the i-MiEV with the subsidy is 2.84 million yen, 150,000 yen less than the Leaf.
In the room where Nissan held its press conference Tuesday, a panel showed how the electricity bill for charging the Leaf was considerably cheaper than the cost of keeping a hybrid vehicle on the road. The panel did not name the hybrid vehicles it was referring to, but subtly implied they were Toyota Motor Corp.'s Prius and Honda Motor Co.'s Insight. The electricity charges for the Leaf are about one-third of the gasoline cost for the hybrids, the panel suggested.
Electric cars are more expensive than hybrid cars. But if customers are persuaded that electric vehicles are cheaper to run than hybrid cars over the long run, the shares held by electric vehicles and hybrids in the eco-car market could be in for a shake-up.
While the price war will energize the domestic spread of electric vehicles, automakers will not be able to squeeze a profit from their electric vehicle programs for some time.
MMC initially forecast it would need to sell 30,000 units a year to make a profit and that it would take many years until its i-MiEV program became a money-spinner. MMC's decision to cut prices could sting its business showing.
Nissan poured a huge amount of money into developing the Leaf. The company's electric vehicle program is not forecast to be running in the black anytime soon, especially with a price war in full cry.
Further muddying the waters, it is unclear when the government will end its subsidy, the main support for sales of electric vehicles.
Depending on how things pan out, electric vehicle manufacturers could find themselves scrapping in a price war similar to the one being waged by electrical appliance makers.
April 5th, 2010, 04:57 AM
E-tags eyed for car transport
Three major domestic automakers and a leading shipping company will jointly develop a system to more efficiently transport cars by using electronic tags, it has been learned.
Toyota Motor Corp., Nissan Motor Co., Mitsubishi Motors Corp. and NYK Line aim to cut costs by reducing inventory and streamlining logistical facilities with the introduction of electronic tags.
They also are sounding out Honda Motor Co. to join the development project. South Korea's Hyundai Kia Automotive Group and China's Shanghai Automotive Industry Corp. (Group) also have shown strong interest in the project.
The electronic tag system is expected to develop into a global standard, analysts said.
The joint development of the system--which the companies aim to implement in 2013--is likely to start in late April, with NYK Line playing a pivotal role in the project. The shipping company transports about 30 percent of the world's new cars.
Currently, automakers keep new vehicles at ports closest to their production plants and ship them upon receiving orders. Information on the products, including destinations, is written on paper slips, and inventory is manually confirmed car by car.
Therefore, it is difficult for carmakers to cope with sudden changes in demand, resulting in excessive inventory, analysts said.
However, electronic tags are expected to enable them to grasp such important information as the model and specification of a car by radio around the clock.
It also will become easy for automakers to verify inventory and change delivery destinations with personal computers, allowing them to reduce their workforces and storage space.
The new system is expected to enable the three carmakers to save more than 100 billion yen a year and reduce the number of days from production to shipment by one day.
Major electrical machinery companies such as Hitachi Ltd. and Mitsubishi Electric Corp. will also likely cooperate in the system's development. They plan to decide specifications for the electronic tag, scanning device and data processing, taking into account requests from the automakers.
April 5th, 2010, 05:14 AM
Dollar at mid-94 yen in Tokyo
TOKYO, April 5 (PNA/Xinhua) -- The dollar traded at the mid-94 yen level early Monday in Tokyo.
The dollar bought 94.51-54 yen at 9 a.m., compared with 94.56- 66 yen in New York and 93.93-96 yen in Tokyo at 5 p.m. Friday.
The euro traded at 1.3494-3495 dollars and 127.55-59 yen, compared with 1.3500-3510 dollars and 127.65-75 yen in New York and 1.3552-3555 dollars and 127.32-36 yen in Tokyo. (PNA/Xinhua) http://www.pna.gov.ph/index.php?idn=3&sid=&nid=3&rid=267884
April 6th, 2010, 07:30 AM
Bridgestone advances big-tire output
Bridgestone Corp. said Monday it has started, three months ahead of schedule, the second phase of expanding production capacity at its plant in Kitakyushu for large and ultralarge off-road radial tires for construction machinery and mining vehicles.
The move is aimed at meeting growing global demand for the tires as a result of an increase in production of coal and other mineral resources, Bridgestone said.
The second phase of capacity expansion, originally scheduled to start in July, will bring production of the tires to 80 tons per day when it is completed in the second half of 2012.
The Kitakyushu plant began operating last June, with the aim of achieving a daily output capacity of 30 tons under the first phase of expansion due to end in the second half of this year.
Nippon Oil, Mitsui Marubeni to talk LPG tieup
Nippon Oil Corp. and Mitsui Marubeni Liquefied Gas Co. said Monday they will begin talks to integrate their liquefied petroleum gas businesses by next March 31.
Nippon Oil, a unit of JX Holdings Inc., and Mitsui Marubeni Liquefied Gas, established by trading houses Mitsui & Co. and Marubeni Corp., plan to set up a new company by splitting Nippon Oil's LPG business to integrate with Mitsui Marubeni Liquefied Gas, which would be the successor company.
The new company would be Japan's largest LPG supplier, holding a market share of about 25 percent. Nippon Oil is expected to take a majority stake in the company.
The integration is aimed at rationalizing the LPG business to strengthen competitiveness and profitability as demand for LPG is expected to fall due to expansion in coverage by city gas and other factors.
The new company also plans to discuss new energy businesses.
April 7th, 2010, 04:06 AM
Long reads but they're worth it
Japan’s response to its ageing crisis
Author: Yukinobu Kitamura, Hitotsubashi University
An ageing population, coupled with a declining birth rate, is an unprecedented challenge for Japanese policymakers. The issues created by this situation can be readily identified in the administration of Japan’s pension system.
It is widely recognised that record management for Japanese pensions has been, moderately speaking, incomplete, and more strictly speaking, defective. On the occasion of the introduction of the basic pension identification number, the Social Insurance Agency identified some 250 million numbers out of 300 million and consolidated them into 100 million basic pension identification numbers. As a consequence, 50 million pension numbers still remain to be identified. This problem has been created and magnified in various stages of pension system transitions. The chief problem is a weak governance structure. In particular, the current structure ignores the role of the participants in the system. The best mechanism for correcting this error would be to use a feedback system among the pension administrators, pension contributors, and recipients of the pension. In addition, the internet and e-mail rather than the postal service and pensions books could be used for communication and record-keeping. In terms of pension governance, a rigorous division and clear assignment of responsibilities to each of the participating individuals, the Social Insurance Agency, and the Ministry of Health, Labor and Welfare is urgently needed.
An equally large problem created by the age demographic of the Japanese population is revealed in considerations of how the National Basic Pension should be financed going forward. To clarify, I provide a rough estimate of the change in the burden each generation would face in the case of a switch to full tax financing. We make the following assumptions:
(1) Full tax financing starts in 2007.
(2) The benefit level of the Basic Pension remains as before, that is, around 66,000 yen per month for those who made full contributions for 40 years and are aged 65 or over.
(3) Contributions to the Basic Pension are replaced by a pension-ear-marked increase in the consumption tax. This portion of the consumption tax rate is 4.2837 per cent as of 2007.
(4) Contributions to the Basic Pension of 14,100 yen per month for category 1 people are abolished.
(5) The pension contribution rate for the employee’s pension (Kousei Nenkin Hoken) was 14.996 per cent in 2007. Employees’ contribution is reduced by 5 percentage points, and is financed by the newly created ear-marked consumption tax. Companies’ contribution rate remains as before, that is, about 7.5 per cent.
Let us consider what the life time effect of a shift to tax financing of the National Basic Pension would be. We assume that this shift occurs once in 2007 and that this financing remains afterwards.
A typical life is assumed to be as follows:
(1) A man starts working at age 20 and keeps working until age 65.
(2) He gets married at age 30 to a woman aged 26.
(3) They remain married until the husband’s death at age 80.
(4) They receive the public pension after retirement.
(5) After the husband’s death, the wife receives the public pension until her death at age 85.
With these assumptions, we can estimate that the net burden would vary across different cohorts, but we demonstrate that the net burden can be smoothed across different cohorts compared with the existing plan of pension contribution increases.
We conclude that the ageing crisis is exacerbated by poor administration of the pension system. The first priority should be to establish an incentive compatible and flexible system of administering the public pension. Then we can design a long-run sustainable and transparent public pension system, accompanied by a sound finance mechanism. A great deal of empirical evidence has been given to support alternative pension reform plans. Now the Democratic Party of Japan must make some clear and robust decisions on the design, funding and administration of Japan’s public pension system.
Yukinobu Kitamura is professor at the Institute of Economic Research, Hitotsubashi University, Tokyo, Japan.
Japan caught in deflation conundrum
By Christopher Johnson
TOKYO - If you live in Southeast Asia and need cheap clothing, come to Tokyo and check out these prices: 700 yen (US$7.45) for jeans, 1,000 yen for women's boots, and 7,800 yen for men's suits - about a third of what they cost a decade ago, when Japanese used to go to Bangkok and Hong Kong to shop.
For 12 straight months, prices in Japan have been falling, the country's Statistics Bureau said last week, and land prices are roughly half what they were 20 years ago. Prices fell by 1.2% in February from a year earlier. The finance minister and Bank of Japan board members are promising to stem the price slide, and many financial analysts are warning that further "de-flay" could delay any economic recovery.
Declining prices can encourage consumers, expecting further price falls, to delay purchases. That hits company turnover and profits, prompting further price cuts and factory lay-offs to stem costs - further eroding overall consumer purchasing power and sales. Government income from sales and other taxes is also hit in the downward price spiral.
Yet Eisuke Sakakibara, famous as "Mr Yen" when he was a top bureaucrat at the Ministry of Finance in the 1990s, argues that Japan's deflation is not necessarily a bad thing. "We aren't in a deflationary spiral. I do not think mild deflation in Japan is a bad thing," he said at a forum of financial analysts last week in Tokyo. "We should enjoy mild deflation, rather than ponder it as a disease."
Sakakibara says deflation is due to economic integration, as intra-regional trade in East Asia reaches 57% of all the region's trade. "If you import cheap goods from China, then naturally prices will come down, compared to the conventional prices we're used to in Japan. It's very difficult to avoid deflation by monetary policies, when it's because of structural changes. Relatively slow deflation is something given."
Yet many others strongly disagree, saying deflation will further dampen economic growth and lead to an eternally greater burden of debt compared with what the country produces, or gross domestic product (GDP).
"Deflation is a bad thing. People don't want to spend money, that is the big problem," says Masaaki Kanno, a former senior official of the Bank of Japan, currently chief economist at JP Morgan in Tokyo. "Now deflation and the economy are affecting each other. It's not easy to see what is the egg and what is the chicken. Without ending deflation, the government's target of 3% growth is impossible."
The Japanese economy grew by 0.9% in the final three months of last year, or 3.8% on an annualized basis.
"Deflation corrodes the health of your economy long term," says Richard Jerram, head of Asian economics for Macquarie Capital Securities in Tokyo. "Non-manufacturing companies are more pessimistic than they were a year ago. Deflation means it's impossible to fix the fiscal problems in the economy without some nominal growth. If you have persistent deflation for the next five to 10 years, public finances are going to crash."
As prices and wages fall, many Japanese are putting off purchases of appliances or cars, since they might be cheaper next year. Yet when chatting in supermarkets about "de-flay" (deflation) and "in-flay" (inflation), many Japanese say they are kowaii (afraid). After seeing prices spiral too high in the 1980s and subsequently decline, they still don't reflect the real worth of things.
Tokyo consumers, who tend to rent apartments, even when they cost $1,000 for a tiny living space in the suburbs, rather than own homes, are all for cheaper food, clothing and housing in a city where urban parking spots fetch between US$200 to $600 a month. Many feel that prices still have a long way to fall toward "normal" levels.
Things haven't been normal since the early 1980s, when the Japanese currency stood at 300 yen to the US dollar (compared with 93 this week). Back then, a spartan room in a seaside village bed-and-breakfast (minshuku), at 3,000 yen per person, equated to $40 total for a family of four; a fair rate, not unlike a decent motel in America. Since workers could easily afford a 900 yen lunch special of pork on rice with miso soup, thousands of mom-and-pop shops sprouted up to serve them, fostering a culture of full employment, which attracted thousands of foreign workers.
After the 1985 Plaza Accord, major powers intervened in currency markets to weaken the dollar and strengthen the yen. The goal, echoed in present-day international pressures on China, was to open Japan to more imports and slow down its export juggernaut. The yen quickly doubled in value, and property values skyrocketed, to 50 times their 1950s levels in some cases. Even the cramped wooden house where this correspondent lived in the Osaka area in 1989 was worth $1 million at that time.
Expecting Japanese to get wealthier, businesses jacked up their prices to absurd levels, and Japanese kept buying $60 bottles of wine and $100 melons because they feared prices would rise further. But when the bubble burst, and the stock market benchmark index, the Nikkei 225, shrank from 39,000 to 9,000 in the 1990s, prices didn't fall accordingly. Many landlords, farmers, and suppliers stubbornly held their prices firm, believing consumer demand would recover - which it never did.
Today, even amid Japan's worst downturn since the war, minshuku owners still expect a family of four to pay 12,000 yen, despite 25 years of wear and chronic vacancy as city-folk stay home instead of taking weekend breaks.
Any sudden jump in economic growth might not boost prices. During the export boom of 2006, Japanese corporations channeled record profits toward research rather than into rewards for their workers. Employees felt betrayed, and refrained from buying their own company's products. Since wages on average were still 10% lower than 1997 levels, household spending continued to drop.
Suburban property values, meanwhile, have fallen to half of their 1990 peak. Even though home prices are less "stupid" than before - as many Japanese say - many younger workers are either afraid of losing their jobs, or are waiting for prices to sink to a lower bottom. China's boom can't help, because Chinese can't build cheap houses and bring them to Japan.
Given Japan's declining population, policymakers are faced with tough choices on how to turn things around. The Bank of Japan last month doubled a credit program for commercial lenders to 20 trillion yen. Governor Masaaki Shirakawa said he hoped the move would lower borrowing costs and spur growth and prices. Former BoJ official Kanno says the central bank should lead the way out of deflation.
"The BoJ is responsible for ending deflation," he says. "They shouldn't wait for the government. Discussing inflation targeting is simply a waste of time. People's price expectations will not be affected by higher inflation targets."
Kanno says spending 40 trillion to 50 trillion yen might trigger inflation but wouldn't be sustainable and would increase debt servicing costs. "All the best policies are going to have short-term pain to get the best long-term results. Without taking these risks, Japan will fall into a trap which we can't find an exit. The government should let people know how bad deflation is. Japanese journalists don't want to tell the truth to the Japanese public. The current public pension system will not be sustained."
While agreeing with many of Kanno's points, Macquarie Capital's Jerram doubts whether the central bank can fight deflation on its own.
"Deflation everywhere else is a monetary phenomenon, but Japan sees itself as unique, because deflation is due to deregulation," says Jerram, who has been monitoring Japan for two decades. "The tolerance of deflation is extremely unorthodox. The United States for example will take extreme measures to avoid going into the deflation hole. The problem with tolerating it is, you wake up one day and feel the need to do something about it. Japan is in such a deep hole, that a little bit of fiddling around the edges, such as what the Bank of Japan is doing, is not going to make that much of a difference."
Jerram says the politicians should take action instead of telling the BOJ to try harder. "I think the government doesn't understand it well enough. To be fair to them, they just took office six months ago, and they're starting to see how bad things are. You need to tell the public that the last 10 to 15 years have been a terrible mistake. It's a question of whether you want a crisis now or a crisis later."
One solution, he says, is to set short-term interest rates at minus 3 or 4%. "The idea that nothing can be done is a fantasy. If you fight deflation, it appears to hurt pensioners and lower income workers, but it might be better in the long term."
Yet Sakakibara warns that extreme measures could make things worse.
"Just because prices are coming down doesn't mean Japan is in a recession. We just had a recovery combined with deflation. We shouldn't worry about deflation too much," says Sakakibara, now a professor at Waseda University. "Taking actions to solve deflation might have some undesirable side-effect. We need to really worry when deflation comes with a recession."
Tokyo-based journalist Christopher Johnson (www.globalite.posterous.com) is author of Siamese Dreams and an upcoming novel set in Japan
Who Controls Bank of Japan?
When Japan’s finance minister says jump and the Bank of Japan responds, does that mean its independence is a sham? Or is the real show being directed by the bank itself?
Influential economist Richard Koo says that the BOJ’s recent move to double the size of its short-term financing program after Finance Minister Naoto Kan called for action against deflation was more for show than anything else.
In a refreshingly frank interview with The Diplomat, Koo excoriated the Democratic Party of Japan—and foreign media and academics—for failing to grasp certain key economic principles. He also claims that it wasn’t the Bank of Japan, but the US Federal Reserve that was panicking over the future of its independence, and suggests that Fed Chairman Ben Bernanke may have adjusted his views to fit in with Koo’s during recent congressional testimony to avoid a confrontation that might have further threatened the bank’s status.
But first to BOJ policy specifics, and what Koo describes as the bank’s meaningless move on March 17 to boost to 20 trillion yen the reserves for three-month loans to banks.
‘With quantitative easing under the circumstances we have now, you can double and triple the liquidity in the system but there will be no takers,’ Koo says. ‘But there’ll be no harm done, and if certain parts of the political spectrum are happy as a result, then, you know, why not?’
In other words, while the Bank of Japan appears to have done something, pleasing certain sections of the DPJ in the process, it hasn’t really done anything at all.
‘If the money supply isn’t increasing, that means all the liquidity the Bank of Japan pumped into the system is stuck in the financial system,’ Koo says. ‘It’s not coming out to enter the ordinary market or even the foreign exchange market for that matter. If the money comes out, that means someone borrows and spends it—then you’ll have an impact on foreign exchange, an impact on long term rates, all of that. But the fact that’s not happening means it’s all basically a mirage.
‘The DPJ doesn’t know that! Most academics think it’s a great thing! And the foreign press, especially, think that the BOJ should be doing more. The IMF thinks the BOJ should do more.’
So why are all these people apparently missing the point?
For years Koo, now chief economist at the Nomura Research Institute, has been talking about the lessons to be learned from Japan’s ‘lost decade’—the years of recession that followed the bursting of the nation’s economic bubble of the late 1980s. In his book, The Holy Grail of Macroeconomics he argues that when an economy is pole-axed by crashing asset prices, companies no longer want to borrow money to invest because of the need to repair their weakened balance-sheets. If there are no borrowers in the market, monetary policy becomes ineffective—you can supply as much money as you want at close to zero-interest rates, but there won’t be any takers. Essentially, this suggests that there are two kinds of recession: a regular business-cycle recession, which can be tackled using monetary policy, and what Koo calls a balance-sheet recession, a far deeper kind of post-bubble recession like the Great Depression, that requires the use of fiscal policy.
Much more in this link
April 7th, 2010, 04:31 AM
Key economic indicator in Japan improves for 11th straight month
TOKYO, April 6 (PNA/Xinhua) -- Japan's coincident index, the broadest indicator of the condition of the nation's economy, improved by 0.4 percent in March, statistics released by the Cabinet Office on Tuesday showed.
The index, which combines data such as retail sales and manufacturing, stood at 100.7 according to preliminary statistics, where 100 is equal to average results from 2005.
The leading and lagging indices also improved last month, according to the data. The leading index, which shows the direction the economy is heading in, rose 1 point to 97.9, while the lagging index, improved 0.5 points to 85.4.
The indices demonstrate that strong exports and better sentiment are beginning to have an effect on conditions within Japan, as consumers become more willing to spend and employers gain the confidence to invest.
The Tankan survey, which asks business leaders for their views on the economy, improved to minus 14 in March, from minus 25 in December, demonstrating that employers are becoming more confident that conditions have improved, and they can start to spend money again on employees and equipment.
In recent months, Japan has experienced generally positive news on the economy, even as deflation continues to pose serious problems for both the government and the Bank of Japan (BOJ), which have had to take stimulus measures to keep the recovery in tact.
Analysts said, however, that the indices released Tuesday showed that the gradual improvements seen over the last few months are likely to slowly filter down to households and create the conditions for a sustainable recovery. (PNA/Xinhua) http://www.pna.gov.ph/index.php?idn=4&sid=&nid=4&rid=268208
April 9th, 2010, 08:06 AM
Hatoyama, BOJ chief Shirakawa hold talks
TOKYO, April 9 (PNA/Kyodo) -- Prime Minister Yukio Hatoyama and Bank of Japan Governor Masaaki Shirakawa met Friday to discuss working together to help the economy recover, a move that will likely mark the launch of regular talks.
Finance Minister Naoto Kan said earlier in the day that arrangements will be made for talks between the government and the central bank to take place about once every three months.
Kan told a news conference that the government and the BOJ have shared the goal of fighting deflation and their coordinated efforts have started to bear some fruit.
"The government's economic steps and the BOJ's monetary policies have been harmonized," Kan said. "That is, for instance, leading the yen to weaken and it is moving in a favorable direction for the business community."
Kan said the government and the BOJ did not set any specific items on the agenda beforehand.
In their talks, Hatoyama and Shirakawa are expected to agree on the growing importance of coordinating fiscal and monetary policies, while exchanging views about Japan's economic situation and policy management.
The two last met officially on Dec. 2, in the wake of the yen's upsurge to a 14-year high against the U.S. dollar amid heightening concerns over debt problems in Dubai.
Regular meetings between the prime minister and the BOJ governor have been stalled since the current Democratic Party of Japan-led government scrapped the Council on Fiscal and Economic Policy, a key panel under the previous government led by the Liberal Democratic Party.
In its latest policy review on Tuesday and Wednesday, the BOJ decided to keep its key interest rate on hold at a razor-thin 0.1 percent. The central bank said in a report released in January that Japan is expected to experience deflation for at least three years through fiscal 2011 ending March 2012. (PNA/Kyodo)http://www.pna.gov.ph/index.php?idn=3&sid=&nid=3&rid=268846
April 10th, 2010, 04:39 AM
Household spending lifts Japan
CONFIDENCE among Japanese merchants rose to its highest level in almost three years last month, signalling that the benefits of the export-led recovery are reaching households. This augurs well for Australian investors in Japan, despite dwindling numbers of direct ownership.
The turn in sentiment is also an indication that in the next six to 12 months, Japanese investors may have enough confidence to start looking at buying Australian assets.
Although many were burnt buying up Australian properties, such as on the Gold Coast, in the 1980s, a new generation of investors is said to be keen to come back and take advantage of the bullish Australian markets.
The Japanese Economy Watchers index, a survey of barbers, taxi drivers and others who deal with consumers, climbed to 47.4, a fourth straight gain, the Cabinet Office said in Tokyo. That's the highest level since April 2007, Bloomberg data shows.
The Cabinet Office report adds to signs that a stabilising job market is encouraging consumers to spend, even as deflation persists and wages continue to fall. Those improvements will support households' outlays even as stimulus measures fade, according to economist Azusa Kato.
''Everything tells you that things are getting better for the consumer and those improvements aren't just because of the stimulus,'' Kato, an economist at BNP Paribas in Tokyo, said before the report was published. ''We're going to continue to see these gradual advances.''
February's unemployment rate held steady at a 10-month low, workers' overtime hours increased and sentiment about jobs led gains in household confidence for a second month.
Consumers are spending on items beyond those that qualify for government incentives. Sales of clothing advanced 8.4 per cent in February from a year earlier, the Trade Ministry's retail report showed last month.
Prime Minister Yukio Hatoyama's government extended programs that provide incentives to buy cars and home appliances. Those measures boosted household outlays on durable goods for a third consecutive quarter (ending in December), even as spending on services declined, the Cabinet Office's gross domestic product data shows.
Sales boom puts Toyota back in the driver's seat
The car maker has overcome the global recession and a massive recall, writes Justin McCurry in Tokyo.
After the most testing year in the company's 73-year history, Toyota executives can perhaps afford to greet the new financial year with guarded optimism after last month's dramatic sales increases in the US and Japan.
The rebound was to be expected after the catastrophic collapse in sales prompted by the global recession, but Toyota will be more encouraged by signs that its recent safety recall of more than 8.5 million cars has so far failed to deliver the killer blow many had expected.
The world's biggest car maker saw US sales rise 41 per cent last month from a year earlier, having fallen 16 per cent year-on-year in January and 9 per cent in February.
Toyota attributed its rebound to incentives that gave buyers discounts of up to $US2250 ($2450) a vehicle last month.
The sweeteners, which included interest-free loans and discount leases, were introduced after the company's disastrous handling of complaints involving defective brakes and accelerators.
''Toyota's strong sales performance in March reflects our customers' continued confidence in the safety and reliability of our vehicles, and their trust in the brand,'' said Don Esmond, a senior executive for Toyota Motor Sales USA.
In China, sales rose 33 per cent in March from last year, and by 51 per cent in Japan, where many people bought new models before government incentives expired at the end of last month.
April 13th, 2010, 05:40 AM
Japan's corporate goods prices fall 1.3% on year in March
TOKYO, April 13 (PNA/Xinhua) -- The price of corporate goods in Japan fell by 1.3 percent in March compared with the same month last year, statistics released by Bank of Japan (BOJ) showed on Tuesday.
The fall left the corporate goods price index (CGPI) at 102.6, where 100.0 is equal to the average prices for fiscal 2005.
On a month-to-month basis, the CGPI actually posted a rise of 0. 2 percent, in a sign that the worse of the deflationary period Japan has been suffering may be over.
March marks the 15th consecutive month of on-year decline for wholesale prices in Japan, after the effect of the high-price of oil receded from the country.
Last August, the country experienced a record 8.5 percent drop in its CGPI.
Japan has also had to deal with an economic downturn since the credit crisis that started in the latter half of 2008.
For fiscal 2009, prices fell 5.2 percent overall, leaving the average index for the year standing at 102.6.
Export prices from Japan also fell by 2.2 percent on a yen basis, while on a contract currency basis they rose by 2.5 percent.
Imports, meanwhile, saw their price increase by 4.4 percent on a yen basis and 11.1 percent on a contract currency basis for the month.
Japan is currently facing problems with deflation, as the nation's prices continue to fall amid improving economic circumstances.
The CGPI, which tracks prices in business-to- business transactions, is loosely connected to the consumer price index.
The Bank of Japan and the government of the Democratic Party of Japan (DPJ) have both raised concerns about falling consumer prices and taken steps to try to prevent them from having a damaging effect on the overall economy. (PNA/Xinhua) http://www.pna.gov.ph/index.php?idn=3&sid=&nid=3&rid=269435
April 13th, 2010, 07:01 PM
Kan: Tax hike doable, just needs proper sell
The government is ready to increase taxes to reduce the massive public debt, Finance Minister Naoto Kan indicated Monday, saying the only catch is to present it in a way that will convince voters.
"It is not just a case of Japan. But politicians, whether they are in the ruling or opposition camps, (face the) trauma (of losing) an election if they speak about a tax hike," Kan said at the Foreign Correspondents' Club of Japan.
Even Junichiro Koizumi, one of the most popular prime ministers ever, avoided coming to grips with a tax hike, Kan said.
If the government spends the money wisely, there should be ways in which a tax hike will not interrupt economic growth, he said.
If a way is found, politicians need to thoroughly explain this to voters, and if they can obtain their support, "politicians will be relieved from the trauma," he said.
Kan also mentioned that the government is preparing a fiscal reconstruction bill that would make the government legally obliged to reconstruct the nation's fiscal health.
Kan said he wants to use the bill as a catalyst to energize debate among Diet members on how the debt can be reduced without halting economic growth.
Japan retail funds value rises most in 9 years
TOKYO, April 13 (Reuters) - The value of mutual funds in Japan targeting retail investors rose by the most in nine years in March due to healthy inflows into equities funds as Tokyo stocks jumped and the yen weakened.
Japanese individuals, who hold some $15 trillion in personal assets, have been investing more actively in financial products, including mutual funds, given brighter signs in the global economy and gains in domestic share prices.
The value of publicly placed investment trust funds, similar to mutual funds and known as "toushin", climbed 6.8 percent or 4.06 trillion yen ($43.6 billion) in March, the biggest monthly gain in value terms since April 2001, data from the Investment Trusts Association of Japan showed on Tuesday.
This has lifted the total value to 63.7 trillion yen ($683 billion) -- the highest level since September 2008 when Lehman Brothers went bankrupt. That is bigger than the GDP of countries including Poland, Belgium and Indonesia.
March's hefty gain reflects a 9.5 percent rise in Nikkei stock average .N225 and a 5.2 percent fall in the yen JPY= against the dollar, which lifted the value of toushin invested in foreign stocks and bonds.
"Strong gains in domestic shares and the fall of the yen contributed to boost the overall investment performance," Fumio Inui, the association's vice president, told a news conference.
Inui said toushin posted the biggest ever investment gains of 3.5 trillion yen during the month.
In addition, retail toushin saw net inflows for the 12th straight month, of 532.2 billion yen in March, up from 263 billion the previous month, the data showed. ($1=93.21 yen) (Reporting by Chikafumi Hodo)
Starbucks eyes retail channels for Via in Japan
TOKYO, April 13 (Reuters) - Starbucks (SBUX.O: Quote, Profile, Research) plans to sell its Via brand instant coffee in grocery stores and other retail channels outside its own outlets in Japan in the future, the chief executive of the world's largest coffee retailer said.
Howard Schultz also told Reuters in an interview that he sees the potential for "thousands of stores" in Greater China, where it currently has around 700, while also unveiling plans for an iced version of Via in North America.
Starbucks has already launched Via in the United States, Canada and the United Kingdom, taking aim at established instant coffee leaders Nestle SA (NESN.VX: Quote, Profile, Research) and Kraft Foods Inc (KFT.N: Quote, Profile, Research). Via will go on sale in Japan on Wednesday.
The product helped Starbucks post higher revenues at U.S. stores open at least 13 months in the fiscal first quarter, the first quarterly gain in U.S. same-store sales in two years. [nN20177796]
"We'll release our Q2 profits next week and the momentum in Starbucks' business is pretty good," Schultz said.
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((If you have a query or comment on this story, send an email to firstname.lastname@example.org)) Keywords: STARBUCKS/JAPAN
Japan hopes to corner 6% of global water biz
The government will help the private sector tap into the water business in other countries, aiming to garner 6 percent of overseas markets in 2025, a Ministry of Economy, Trade and Industry panel said in a report released Monday.
The move comes amid growing concerns that Japanese firms have lagged behind rival European water companies for contracts in such areas as sewage system construction and seawater desalination in developing nations.
The value of overseas water business markets that will be open to private-sector firms is expected to expand to some ¥31 trillion by 2025, according to METI estimates.
Aiming at the 6 percent share, worth ¥1.8 trillion, is the central part of the report agreed on by the panel, which has been studying the market.
The panel's recommendations will be reflected in a government strategy for economic growth due out in June.
The panel's analysis shows that a shortage of clean water, especially in emerging economies in Asia, will boost business opportunities in water supply and sewage systems.
The report says the main focus is on building and managing water utility systems, while suggesting that Japanese firms with desalination technologies should aim to win contracts both for delivering knowhow as well as for constructing and maintaining facilities.
April 14th, 2010, 06:15 AM
Japanese stocks open higher on gains in tech shares
TOKYO, April 14 (PNA/Xinhua) -- Japanese stocks opened higher Wednesday, lifted by the strength of high-tech shares.
In the first 15 minutes of trading, the benchmark Nikkei-225 index advanced 81.79 points, or 0.73 percent, from Tuesday to 11, 243.02.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 5.35 points, or 0.54 percent, to 993. 79. The Second Section also advanced. (PNA/Xinhua) http://www.pna.gov.ph/index.php?idn=3&sid=&nid=3&rid=269665
April 14th, 2010, 08:32 AM
Japanese phones dial outside line
new partnership between Japan's largest cellphone manufacturer and Microsoft Corp. may herald a charge by Japanese handset makers into foreign markets.
Sharp Corp. has teamed up with Microsoft to make the KIN line of smart phones, due to be sold in the United States from May through an exclusive deal with the New York-based communications company Verizon Wireless.
Although Microsoft already has a subsidiary which manufactures smart phones, the KIN models will be the first cellphone hardware to carry the Microsoft brand.
But the joint venture's long-term significance for the Japanese cellphone industry may be more profound. It appears to mark a decisive break with the restrictive partnerships which have tended to bind Japanese cellphone makers to domestic networks.
Sharp's move, which coincides with related efforts within the Japanese communications ministry to stop the practice of programming handsets so they cannot be used on rival phone networks' services, could prompt other manufacturers to follow suit and bring Japan's cutting-edge expertise into the international market.
The Japanese cellphone market has been described as suffering from "Galapagos syndrome," in which, like the evolution of species on the Galapagos islands, technology evolves in complete isolation from international standards.
Sharp's KIN ONE and KIN TWO palm-sized handsets are both equipped with touch screens, pullout keyboards and cameras. The KIN TWO has a slightly larger liquid crystal display.
Both phones are targeted at frequent users of social networking services and have Global Positioning System capabilities.
They are slated to hit the European market in the fall, but there are currently no plans to release them in Japan.
The international market for smart phones is growing rapidly. The BlackBerry, developed by Research in Motion Inc. (RIM) of Canada, and Apple Inc.'s iPhone have reached wide markets across the globe.
While Apple has not disclosed who makes its iPhone handsets, industry watchers have noted that the company procures parts from manufacturers in Taiwan and other locations, and has the devices assembled in China.
Sharp, Japan's largest cellphone maker in terms of domestic market share, has been slow to enter foreign markets. After Sharp entered the Chinese market in 2008, Mikio Katayama, the president of Sharp, said the company would pursue an expansionist strategy in both Europe and the United States. The Microsoft partnership represents the first clear sign of progress in that direction.
ANA prospers while rival suffers
Business was booming for All Nippon Airways Co. in February as ailing rival Japan Airlines Corp. suffered its second successive double-digit fall in international passenger numbers.
JAL said Monday that the number of passengers on international routes stood at 804,191 in February, down 10.3 percent from the same month in 2009. Passenger numbers fell 10.7 percent in January.
ANA appears to be picking up a significant slice of the business. It carried 340,647 international passengers in February, up 20.2 percent from the same month a year ago. It was the seventh consecutive year-on-year monthly increase.
The contrast in fortunes in the domestic market was less dramatic. JAL carried 2,750,081 domestic passengers in February, down 1.9 percent year on year. ANA enjoyed an increase of 3.8 percent to 2,900,494 passengers, its first year-on-year rise in nearly two and a half years.
Sharp's 3-D TVs due in summer
Sharp Corp.'s innovative 3-D television sets will hit the market this summer in Japan, with sales in the United States, Europe and China expected to start by the year-end.
Sharp forecasts 3-D sets to account for between 5 and 10 percent of its total sales of liquid crystal display TVs this fiscal year, officials said Monday.
On Monday, Sharp unveiled the large LCD panel it has developed for use in its 3-D TV sets--which will require special glasses.
3-D displays tend to be darker than other TV sets because 3-D images are shown at twice the speed of ordinary images.
However, Sharp's new 3-D LCD panel has achieved about 1.8 times the brightness of ordinary TV sets by reducing the amount of backlight that is lost.
While Sharp supplies LCD panels to other TV manufacturers, Sony Corp. among them, it doesn't plan to sell its new 3-D panels to other companies for the time being.
April 15th, 2010, 05:38 PM
LEAD: BOJ raises assessments for 7 out of 9 regional economies
The Bank of Japan on Thursday raised its assessments for seven of the nation's nine regional economies as Japan's export-led economic recovery continues amid strengthening demand in emerging economies and the government's stimulus measures.
In its quarterly Sakura Report on regional economies, the central bank said the economies of Hokkaido, Tohoku, Hokuriku, Kanto-Koshinetsu, Tokai, Kinki and Chugoku have all seen improvements from three months earlier. The BOJ did not upgrade its assessment for the Shikoku and Kyushu-Okinawa regions in southern Japan.
All of the regional economies showed signs of recovery but "differences remained in the pace and extent of improvement," the central bank said in the report.
"Although the momentum for a self-sustaining recovery in domestic private demand remains weak, our country's economy has been picking up thanks to improvements in overseas economies and various stimulus measures," BOJ Governor Masaaki Shirakawa said in remarks at the start of the BOJ's quarterly meeting of branch managers.
"Corporate business sentiment has been improving and the shift is spreading to wider areas," the BOJ chief said, adding that the risk of Japan falling into a double-dip recession has receded "significantly."
The central bank holds a meeting with managers from its 32 branch offices every three months to grasp the state of regional economies in order to steer monetary policy. After the meeting, it releases the Sakura Report, akin to the U.S. Federal Reserve's Beige Book.
The report, with a pink-colored front cover reminiscent of cherry blossoms, said all nine regions saw positive effects from the government's stimulus measures for the purchase of cars and consumer appliances, although the Shikoku and Kyushu-Okinawa regions reported slower improvement in car sales.
Corporate capital investment is generally ceasing to fall, the report said. Some major export-oriented manufacturers are boosting capital spending but domestic demand-related manufacturers, such as those in the food and paper industries, remain reluctant to make such investments to cope with sluggish domestic demand, the report added.
A recovery in capital spending is likely to become clearer as increased exports are expected to boost corporate earnings, the report said. But the pace of recovery may be "moderate" considering major manufacturers' recent attempts to relocate a large part of their production bases outside of Japan to cope with future demand growth overseas, it said.
Production improved in every region compared with three months earlier, but most regions reported severe employment and income conditions.
In the previous Sakura Report released in January, the BOJ upgraded its economic assessments for four of Japan's nine regions and left its evaluations of the remaining five unchanged.
Japan mulls monetisation of public debt and yen devaluation
A draft by 130 lawmakers from premier Yukio Hatoyama’s Democratic Party of Japan said the country needs a radical shift towards growth policies, calling for an inflation target above 2pc. The exchange rate should be steered to ¥120 against the dollar, from the current ¥90.
Shizuka Kamei, financial affairs minister, said the central bank must monetise government debt to support the market for state bonds and prevent deflation becoming deeply lodged in the economy
The Bank of Japan’s governor, Masaaki Shirakawa, told lawmakers that it would illegal to fund state spending by printing money. “History has proven that central banks directly buying government securities caused severe inflation and dealt a blow to the economy. The BoJ is now providing adequate funds,” he said.
Tokyo is still able to issue 10-year bonds at ultra-low rates of 1.4pc, relying on a captive savings market, even though gross public debt will reach 225pc of GDP this year, the highest in the world.
However, there are growing fears of a “malign scenario” where rising rates set off a debt compound spiral. The IMF has warned that borrowing costs may rise sharply as Japan’s aging crisis bites in earnest.
Junko Nishioka, an economist for RBS, said the BoJ is haunted by hyperinflation after World War Two. It is afraid debt monetisation could back-fire, triggering the very crisis that everybody fears. “We don’t think a fiscal accident is likely yet. Pension funds will keep buying debt for another five or six years. After that pressure increases,” she said.
Tokyo stocks rise for 2nd day in row on sustained economic optimism
Tokyo stocks rose Thursday for the second day in a row as investors were reassured that the global economy is rebounding.The 225-issue Nikkei Stock Average advanced 68.89 points, or 0.61 percent, from Wednesday to 11,273.79. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 7.80 points, or 0.79 percent, to 998.90.
Almost all 33 sectors on the TSE advanced, led by sea transport, insurance and real estate issues. Only four sectors -- air transport, rubber product, and pulp and paper, and auto -- lost ground.
Investors snapped up a broad range of equities, especially export- oriented high tech shares and financials, as they took a positive cue from a strong performance on Wall Street due to recent better-than- expected earnings data from Intel Corp. and JPMorgan Chase & Co.
Hiroichi Nishi, equity division general manager at Nikko Cordial Securities Inc., also cited robust results in Chinese macroeconomic readings, released after the Tokyo market's morning session closed, as among the latest signs of a global economic recovery.
Government data showed that China's economy expanded 11.9 percent in the January to March period from a year earlier.
"Global economic recovery is becoming clearer, and this is lifting the market," Nishi said, adding that another buying catalyst for the market was the easing of worries about a possible interest rate hike in China.
Usually, credit tightening, aimed at curbing inflation, is not welcomed by investors as it has the potential to delay global economic recovery, brokers said. In addition to the United States, investors have been keeping close tabs on developments in China, a key emerging economy.
April 21st, 2010, 07:27 PM
Japan weighs options to cut budget deficit
April 21 - In an attempt to scale back the nation's huge budget deficit, Japan is considering adopting a new numerical target, with two options now on the table, the Nikkei business daily said.
The new target will be incorporated into a fiscal reform bill being drafted by the government and ruling coalition officials, the daily said.
According to the paper, the target will be expressed as either the primary balance, which shows the degree to which a government can cover its expenditures without issuing bonds, or as the ratio of budget deficit to gross domestic product, a yardstick used by the European Union.
The draft bill targets to halve the primary balance deficit of the central and local governments in fiscal 2015 and achieve a surplus by fiscal 2020, the daily said.
According to the Cabinet Office, the primary balance deficit will come to an estimated 33.5 trillion yen ($362.4 billion) in fiscal 2010, the Nikkei said.
The paper said it was still not known if the legislation will involve the timing and size of any consumption tax hike. (For more stories on the Japanese economy, click [ID:nECONJP]) (Reporting by Vinay Sarawagi in Bangalore; Editing by Maju Samuel)
Gov't aiming for 55% of women to continue working after 1st baby
TOKYO, April 19 (AP) - (Kyodo)—The government is aiming for 55 percent of women to continue working after having their first baby by 2020, up from 38 percent in sources familiar with the matter said Monday.
Under its employment policy to be included in its growth strategy, the government will also aim to improve employment conditions for women and reinforce growth amid the declining birthrate and the aging of society.
The growth strategy will be compiled by the end of June.
The government will also seek to raise the ratio of fathers taking childcare leave to 13 percent from 1.23 percent in 2008 and to increase the rate of annual paid holidays taken by employees to 70 percent from 47.4 percent in 2008, the sources said.
The government will aim to reduce the number of part-time workers to 1.24 million, about 40 percent lower than in 2003, when it hit a peak of 2.17 million, the sources said.
Regarding people aged 20 to 64, the government will aim to raise their employment rate to 80 percent from 74.6 percent in 2009, the sources said.
The goals were agreed Monday at a working group meeting of government officials, experts, and labor and management representatives.
The working group will work out the details of how to achieve the numerical targets.
Japan's consumer sentiment up for 3rd straight month in March
Japan's consumer sentiment rose for the third straight month in March amid signs of improving employment conditions, the government said Monday, upgrading its monthly assessment on consumer confidence.
The index of sentiment among households made up of two or more people gained 1.1 points from February to 40.9, the Cabinet Office said. The index, however, stayed below the boom-or-bust threshold of 50.
The office upgraded its assessment for the second consecutive month, saying the country's consumer confidence "has recently shown signs of recovery." It had said the confidence became "almost flat" in February.
April 21st, 2010, 07:27 PM
Japan Post to be reorganized into 3 companies in October 2011
TOKYO, April 20 (AP) - (Kyodo)—The government plans to reorganize state-owned Japan Post Holdings Co. from the current five-company structure into three companies in October 2011, with the government continuing to hold more than one-third of its shares, related Cabinet members said Tuesday.
The move is part of the current Democratic Party of Japan-led government's proposed legislation aimed at scaling back the planned privatization of Japan Post that had been spearheaded by former Prime Minister Junichiro Koizumi of the Liberal Democratic Party.
Postal reform minister Shizuka Kamei and Internal Affairs and Communications Minister Kazuhiro Haraguchi announced details of the bill at a joint news conference.
At present, Japan Post Holdings places the other four companies --Japan Post Service Co., Japan Post Network Co., Japan Post Bank Co. and Japan Post Insurance Co. -- under its umbrella.
The bill calls for merging Japan Post Holdings, Japan Post Service and Japan Post Network into a new holding company on Oct. 1, 2011, which would then place Japan Post Bank and Japan Post Insurance under its wing.
Under the bill, the government would own more than one-third of the reorganized Japan Post Holdings' shares on a voting rights basis, and the holding firm would own more than a third each of Japan Post Bank and Japan Post Insurance, also on a voting rights basis.
The government also plans to double the deposit cap at Japan Post Bank to 20 million yen and raise the life insurance coverage limit at Japan Post Insurance to 25 million yen from 13 million yen, on the basis of an ordinance it will issue after passage of the bill in parliament.
The increases in upper limits for postal savings and postal insurance coverage are expected to be implemented in June, after the bill clears the Diet.
Kamei said he hopes to gain Cabinet endorsement for the bill next week, adding, "We will make efforts to get the Diet to start the bill's deliberations at an early date in May," with an eye to see it approved by parliament possibly in June.
The Japanese Bankers Association recently balked at the envisioned hike in the postal deposit cap, saying it would induce a shift in savings from commercial banks to Japan Post, where depositors would think that their savings would enjoy a greater degree of government protection.
The government has said it will review the cap's level in October depending on the scale of any shift in deposits from commercial banks to Japan Post.
The proposed legislation, once implemented, would revamp the 10-year postal system privatization program which Japan had been following since 2007, after the Koizumi administration pushed the postal system privatization bill through the Diet in 2005.
The new bill calls for abolishing the postal privatization law within three months after the new legislation's enactment is promulgated.
It also calls for obligating Japan Post Holdings to offer "universal" banking and insurance services throughout the country in addition to mail services.
In addition, the bill calls for setting up a panel of experts to be tasked with implementing postal system reforms from the standpoint of ensuring that fairness in competition between Japan Post's financial units and commercial financial institutions will be preserved.
Japan Post Bank and Japan Post Insurance held combined funds of roughly 300 trillion yen as of the end of 2009, and 225 trillion yen, or about 80 percent, of the total was spent to buy government bonds.
Yahoo's Jan.-March profit nearly triples on recovering online ads
NEW YORK, April 20 (AP) - (Kyodo)—Yahoo Inc. said Tuesday its net profit for the January-March quarter nearly tripled to $310 million from $118 million a year before on an upswing in mainline online advertising.
The Sunnyvale, California-based Internet company said display advertising revenues, including revenues from online advertising, surged 20 percent.
As a result, the company's overall revenues for the reporting quarter increased 1 percent to $1.60 billion, marking the first year-to-year gain since the July-September 2008 quarter.
"Thanks to our efforts, our search share has stabilized, and we grew display advertising by 20 percent year over year. More importantly, guaranteed display grew by 24 percent as advertisers took advantage of the science, art and scale that only Yahoo can offer," Chief Executive Officer Carol Bartz said in a statement.
Asahi May Buy Food, Alcohol Companies in Asia-Pacific
April 21 (Bloomberg) -- Asahi Breweries Ltd., Japan’s second-largest beermaker, may buy food and alcohol companies in the Asia-Pacific region as it aims to raise the proportion of sales it gets overseas by almost fourfold in five years.
“What we would need is a company with annual sales of 300 to 400 billion yen,” President Naoki Izumiya said in an interview in Tokyo yesterday. Asahi is looking for targets in countries including India, Indonesia and Russia as it plans to boost sales 33 percent to at least 2 trillion yen ($22 billion) by 2015, from an estimated 1.5 trillion yen in 2010, he said.
Japanese beverage makers are accelerating overseas expansion after domestic beer demand shrank 16 percent from a peak in 1994. The Tokyo-based brewer of Super Dry-brand beer can spend as much as 400 billion yen to buy companies in Japan and abroad, the company said in December.
“It’s inevitable for Japanese brewers to use mergers and acquisitions as a means to expand globally,” Yoshiyasu Okihira, an analyst at Credit Suisse Group AG who has a “neutral” rating on Asahi shares, said. “Beermakers need to hurry to invest overseas and in other growth areas, as we expect beer demand in Japan to fall further.”
Asahi advanced 0.5 percent to close at 1,726 yen on the Tokyo Stock Exchange. The stock has risen 0.8 percent this year, compared with an 8.1 percent decline in larger rival Kirin Holdings Co.
The brewer aims to make overseas sales account for more than 20 percent of its total revenue in 2015 from 5.3 percent last year, it said in December. Kirin gets about 25 percent of sales outside Japan, while Suntory Holdings Ltd. derives 14 percent of sales from abroad, according to the companies’ financial reports.
Asahi plans to turn its overseas business profitable this year, Izumiya said. The business has been losing money since at least 1996 when it began brewing Super Dry in North America.
The company plans to double its sales in China to about 20 billion yen in two years by offering more products and strengthening beer sales, Izumiya said.
Asahi owns a 40 percent stake in a soft-drink venture with Tingyi (Cayman Islands) Holdings Corp., China’s biggest maker of packaged food, and Ting Hsin, parent of Tingyi. Asahi may supply baby food made by its Wakodo unit to Tingyi, Izumiya said.
Asahi agreed last year to expand its partnership with China’s Tsingtao Brewery Co., in which it has a 19.99 percent stake. Asahi aims to use Tsingtao’s breweries and sales network to expand its sales in China.
Japan's cosmetic maker finds use for volcanic ash
KAGOSHIMA Prefecture, Japan : Iceland, which is busy cleaning up volcanic ash, may want to take a leaf from Japan's Kagoshima Prefecture.
The area in southern Japan is half covered by volcanic ash, better known to the locals as shirasu.
In fact, there's so much of it, it can found in everything - from foundations of buildings, to tiled roofs and insulators.
More recently, its use has even extended to cosmetics.
There's plenty of evidence of past volcanic eruptions in Japan's Kagoshima Prefecture.
Aira Caldera was the site of an enormous explosion nearly 30,000 years ago - its crater filling with seawater to form Kinko Bay.
After that, a series of eruptions formed Sakurajima, a volcano that has become a symbol of Kagoshima.
Today, the old volcanic ash is used by companies making industrial materials.
Beautician Kayoko Matano also uses the soil - but for a different purpose.
She looks for sediment created 400,000 years ago. And she wants to keep its exact location a corporate secret.
"We dig and dig, like this, to find pure white ash. We look for the particle and our job is to dig there," said Matano, president of cosmetic maker Tengen.
Cosmetics are produced by combining the white ash with oil and sodium hydroxide.
The factory churns out 200 to 400 kilogrammes of skin care products each day.
Tengen's first successful product - a facial cleanser - made its debut in 1994. It's said to clean pores without being abrasive, and it has become very popular.
The company has since extended its range of products to include gels and face creams.
Last year in 2009, her products received a Monde-Selection award for quality. And with it, Matano believes the business has established a name for itself as a cosmetics maker.
"There are still indefinite ways of using the effect of the volcanic ash. I want to continue to study it, and contribute to promoting health and beauty," said Matano.
The company is trying to boost its business by selling to other Asian countries such as Hong Kong, Taiwan, mainland China and Singapore. - CNA /ls
April 23rd, 2010, 10:12 AM
Japan posts massive trade surplus in March
TOKYO (AFP) – Japan posted a bigger-than-expected trade surplus of 10.2 billion dollars in March with exports surging 43.5 percent from a year earlier, official data showed Thursday.
Japan's overall trade surplus came to 948.9 billion yen (10.2 billion dollars) in the month, soaring from a year-before deficit of 5.4 billion yen on recovering exports.
The surplus was bigger than the 106.71 billion yen the market had expected.
Japan's annual trade balance for the year to March stood at 5.23 trillion yen in surplus, recovering from the previous fiscal year, when it logged the first deficit since 1980 due to the global economic downturn, the data showed.
In March, exports rose 43.5 percent to 6.00 trillion yen on higher shipments of automobiles, auto parts and microchips, according to data from the finance ministry.
Imports went up 20.7 percent to 5.06 trillion yen due to higher prices of oil and nonferrous metals.
April 26th, 2010, 09:34 AM
S. Korea, Japan to end currency swap arrangement
SEOUL, April 25 (PNA/YONHAP) -- South Korea and Japan agreed not to extend their emergency currency swap arrangement that expires this month, the government and central bank officials said here on Sunday.
The finance ministry and Bank of Korea said the decision was made during recent talks between economic policymakers from neighboring countries.
"The measures were implemented during extraordinary circumstances, and since the overall situation has stabilized, the arrangements should be terminated," an official source said. He added that if the swap arrangement was extended, there is a chance the market may look upon it as being "strange" and out of the ordinary.
However, he said that Seoul may opt to hold onto the $ 3 billion "standing" arrangement that was agreed upon before the worldwide financial crisis occurred, since it can help guard against sudden fluctuations in exchange rates caused by speculators.
South Korea had set up currency swap deals with the United States, Japan and China in late 2008 as the worldwide financial crisis triggered by the collapse of Lehman Brothers caused serious problems in the flow of money across borders.
It had a $ 30 billion arrangement with the U.S. that was terminated as of February, while it agreed on a $ 20 billion deal with Japan. (PNA/Yonhap) http://www.pna.gov.ph/index.php?idn=3&sid=&nid=3&rid=271888
Dollar at lower 94 yen in Tokyo
TOKYO, April 26 (PNA/Xinhua) -- The U.S. dollar traded at the lower 94 yen level early Monday in Tokyo.
The dollar bought 94.15-16 yen at 9 a.m., up from 93.93-94.03 yen in New York and 93.36-38 yen in Tokyo at 5 p.m. Friday.
The euro was quoted at 1.3363-3366 dollars and 125.81-85 yen, against 1.3378-3388 dollars and 125.66-76 yen in New York and 1. 3267-3269 dollars and 123.86-90 yen in Tokyo late Friday. (PNA/Xinhua) http://www.pna.gov.ph/index.php?idn=3&sid=&nid=3&rid=271910
April 27th, 2010, 06:27 AM
Japanese carmakers increase output
Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. increased global auto production in March as demand rose in Asia and the U.S.
Toyota's output surged 97 percent to 773,297 vehicles from 392,882 a year earlier, the company said Monday. Honda increased production 62 percent to 349,425 vehicles and Nissan boosted output 85 percent to 318,827, the companies said separately.
The automakers built more vehicles as demand recovered in the U.S. and Japan and continued climbing in China, the world's biggest auto market. A year ago, carmakers scaled back output, temporarily halting production lines to reduce inventory amid a recession.
Toyota's global output for the year that ended March 31 rose 0.7 percent to 8.2 million vehicles from a year earlier, while Honda's production fell 7.5 percent to 3.3 million and Nissan's gained 7.8 percent to 3.1 million.
Auto sales in the U.S. rose for the fifth straight month in March. Toyota's deliveries there jumped 41 percent from a year earlier to 186,863 as the carmaker offered no-interest loans and discount leases to win back buyers after recalling more than 8 million vehicles worldwide.
The company raised U.S. production 138 percent in March to 107,227 vehicles. Toyota's output in Japan increased 115 percent to 347,281 and exports rose 103 percent to 161,831.
Toyota also boosted March production in China, by 135 percent to 79,757 vehicles. Industrywide sales of passenger cars, trucks and buses in that country rose 63 percent from a year earlier to 1.26 million vehicles.
Toyota's full-year sales in China may exceed an 800,000-unit target, Masahiro Kato, president of the company's China business, said at the Beijing Auto Show on Friday.
Honda's U.S. production increased 108 percent in March to 93,617 vehicles. Honda increased output in China 36 percent to 65,283.
Nissan increased production in March by 61 percent in Japan to 99,903 vehicles, including a 90 percent rise in exports. Its output in China rose 64 percent to 62,574, while U.S. production increased 94 percent to 62,574.
Smaller carmakers Mazda Motor Corp., Fuji Heavy Industries Ltd. and Suzuki Motor Corp. also reported increases in March. Mazda's global production rose 111 percent to 121,161 vehicles while Fuji Heavy, owner of the Subaru brand, raised output 79 percent. Suzuki posted a 24 percent gain to 258,987.
Medical tourism now starting to take off
Medical tourism is in its infancy in Japan, but hospitals, schools, travel agencies and even the government are moving to improve services and promote growth.
Their efforts have shown signs of success, with patients from the Untied States, China and elsewhere increasingly visiting Japan for surgery, checkups and other medical services.
The Cancer Institute Hospital (Ariake) in Tokyo's Koto Ward, for example, treated 22 patients on medical visits in fiscal 2009, up from nine in fiscal 2008.
One of the patients is a 59-year-old woman from Los Angeles.
Two years ago at the hospital, Naoki Hiki, who speaks English, conducted laparoscope-assisted surgery on the woman, who was suffering from early-stage stomach cancer.
She had found Hiki on the Internet while looking for a treatment that would cause less strain on her body.
The surgery cost an estimated 1.5 million yen ($15,930). She also must pay for the costs of her biannual trips to Japan for regular checkups.
Still, the woman says she is satisfied with her treatment and that Hiki and the nurses at the hospital have been good to her.
In mid-April, Hiki examined the woman at the hospital, and she said she is doing well.
On the latest trip to Tokyo, her 36-year-old son, who accompanied her, had stomach cancer tests done at Cancer Institute Hospital (Ariake).
To prepare for the expected increase in foreign patients, an "international medical team" was set up at the hospital in November.
Members meet once a month to set standards on receiving foreign patients and medical fee payments.
Kameda Medical Center in Kamogawa, Chiba Prefecture, has also seen an increase in overseas patients.
The hospital treated about 50 people from abroad last year and receives five or six inquiries from foreign countries by e-mail almost daily.
Last August, the center became the first hospital in Japan to earn accreditation from Joint Commission International (JCI). Accredited hospitals are deemed reliable medical institutions that meet standards designed to improve medical care.
Accreditation is used as an international indicator among foreign patients and insurance companies in choosing a hospital.
Currently, four Filipinos training to become nurses in Japan work at the medical center, which plans to hire Chinese with Japanese nursing qualifications by the summer.
The center has a future plan to devote one floor of a 13-story building to a "foreigners ward."
"Internationalization of medical care leads to a higher level of medical care in general, and the Japanese people should be happy about it," said Takaaki Kameda, chairman of the board at Kameda Medical Center. "We'd like to cooperate with other hospitals in obtaining JCI accreditation."
Businesses related to medical tourism are also on the rise.
Last Wednesday, the Osaka branch of Inter School, which trains interpreters and translators, started a yearlong course for Japanese-English interpreters specializing in medical terminology, such as "inspection" and "palpation."
The school last year started offering courses on medical interpretation at its five branches around Japan. About 80 students signed up.
Next month, the school will begin similar courses in Chinese.
The travel industry is also trying to cash in on medical tourism.
In April 2009, Nippon Travel Agency Co. started offering tours for wealthy Chinese seeking positron emission tomography (PET), a medical scanning technique that examines the entire body, including organs, in one go.
By late February, 43 people took the tours, which include sightseeing and cost more than 1 million yen a person.
Fujita Kanko Inc. began similar tours this spring.
JTB Corp., the largest travel agency in Japan, has created a section devoted to medical tourism.
The government is supporting these efforts.
In fiscal 2009, the Ministry of Economy, Trade and Industry invited 24 people from overseas for health checkups to locate any problems in medical interpretation and the immigration system.
The ministry plans to use the results to improve practices in medical tourism.
The Japan Tourism Agency is also expected to establish a medical tourism booth at the Asia Luxury Travel Market trade show in Shanghai in June.
Fall in services prices starting to decelerate
Corporate service prices fell in March at their slowest pace in more than a year, backing up Bank of Japan Policy Board members' views that deflationary pressure is easing.
The prices that firms pay for services such as transportation and advertisements slid 1.1 percent from a year earlier, the smallest decline since November 2008, the BOJ said Monday.
The drop in service prices has moderated since August as the export-led recovery spurs corporate profits, reducing the need for them to pare costs, according to economist Azusa Kato.
BOJ policy makers are expected to predict an end to consumer price declines for the year through March 2012 when they release their outlook report Friday.
Kan seeks both growth, social security
Finance Minister Naoto Kan on Monday asked his advisory panel to study how to link expansive social security measures to economic growth.
The discussions at the Fiscal System Council reflect the administration's position that it is possible to stimulate growth even with higher tax rates that would help ensure a more generous social security system while creating employment in the medical and nursing care sectors.
"I wish (the panel) will discuss how to strike a balance between boosting the economy and restoring fiscal health," Kan said at the meeting.
He also said: "Tax is not a burden (on the people) but a contribution. If we consider the appropriate (use of taxpayers' money) with such a mind-set, it will lead to economic growth."
April 28th, 2010, 06:53 PM
JAL to cut 45 more overseas, domestic routes in turnaround efforts
Japan Airlines Corp., now undergoing a state-backed rehabilitation process, said Wednesday it will cut 45 more international and domestic routes from late September through March next year as part of its efforts to swiftly restore the carrier to profitability.
As the airline works out details of rehabilitation measures including the route cuts, the government-backed turnaround body said JAL's submission of its plan to the Tokyo District Court may be delayed from its initial target of late June.
Hideo Seto, trustee of the Enterprise Turnaround Initiative Corp. of Japan which is overseeing the airline's rehabilitation, said in a news conference that there is a "likelihood that (the submission) will be slightly delayed" to enable JAL to come up with a "firm" and "effective" turnaround plan.
According to JAL, the flight services to be terminated are 15 international routes and 30 domestic routes.
Cuts and reduction of routes form the key pillars of the turnaround plan. When JAL filed for bankruptcy protection on Jan. 19, it said it would scrap a total of 31 unprofitable domestic and international routes.
Creditor banks, however, have been pressing JAL to make further job and flight cuts for enhanced streamlining of operations.
JAL President Masaru Onishi noted the key role of the existing routes in social infrastructure, but said the new flight cuts are "necessary to ensure (JAL's) long-term rehabilitation."
Under its new plan on route cuts, JAL will end its services connecting Narita airport near Tokyo with Sao Paulo, Amsterdam and Milan from Sept. 30. It will also stop flying to Kona, Hawaii, from Oct. 30.
The new plan also entails strengthening flights to Tokyo's Haneda airport, with new routes linking it to Taipei's Songshan, San Francisco, Honolulu, Bangkok and Paris. The Narita-San Francisco route will be cancelled.
Domestic routes subject to cuts include flights between Nagoya airport and nine cities.
Subsequently, JAL said it will cut its international capacity by 40 percent and domestic capacity by 30 percent for this fiscal year compared with fiscal 2008 levels.
Even as Japan's former flag carrier slashes routes, JAL Chairman Kazuo Inamori reiterated that international services remain important to JAL's turnaround efforts.
JAL said it will retire the Boeing 747-400 and Airbus 300-600 aircraft within a year, a change from its initial plan unveiled in January to do so over three years.
Job cuts also remain central to the carrier's rehabilitation.
According to the carrier, about 3,610 employees filed for an early voluntary retirement program from March 5 to April 16. The figure surpassed the company's target of 2,700 people.
JR East employs first female bullet-train operator
SENDAI -- JR East has appointed its first female bullet-train operator on the Tohoku Shinkansen line, it was announced on Tuesday, as Yukie Sakai boarded the Tokyo-bound "Hayate-Komachi" bullet-train at Sendai Station in front of reporters.
The 29-year-old Sakai was born in Minamisoma, Fukushima Prefecture. According to JR East, she joined the company in April of 2001 and gained experience as a conductor and a train operator on non-bullet train lines. In October of 2009 she began learning as an apprentice on the Tohoku Shinkansen line, and on March 23 of this year she obtained her bullet-train operating license. She began operating on the Tohoku line by herself on April 9.
Sakai joins about 400 male bullet-train operators in the company. JR Tokai and JR West already have women actively contributing as bullet-train operators.
Better Place tests electric taxis in Japan
TOKYO - Better Place launched its first battery-switching station in Japan on Monday, which will serve Tokyo's largest taxi operator Nihou Kotsu. The company will operate four electric taxis on a test run for the Japanese government. The trial will last for a period of three months, and, if it proves successful, may lead to the expansion of the use of electric taxis in Tokyo, as is the case in other cities in Japan and around the world.
"I believe this project will be very effective in reducing carbon dioxide emissions, and will therefore contribute to the fight against global warming," said Sakihito Ozawa, Japan's environment minister on Monday.
"For the sake of creating a viable society, I very much hope this project is a success," he added.
"Today is a historic turning point in the journey which we began some two-and-a-half years ago," said Better Place CEO Shai Agassi, "When we chose Japan, we did so to awaken the Japanese automobile industry, so that they may see that what we have 'on paper' is the real thing.
"Just one year ago, when we first presented the charging station prototype, most car manufacturers said it was impossible. Today, it is not only possible, but it is a solution that serves taxis that pick people up in the street."
Taxis responsible for 20% of air pollution
"The new battery-switching station has 12 batteries at any given moment, which can serve a fleet of 200 taxis," Kiyotaka Fujii, head of Better Place in Japan told Ynet. "The choice of taxis for the trial was very natural. There are some 60,000 taxis in Tokyo, which make up some 2% of the total fleet of automobiles, but emit 20% of the carbon dioxide that comes from transportation. Therefore, converting the fleet of taxis to run on electricity carries with it a great environmental advantage."
According to Fujii, funding for the battery-switching station came fully from the Japanese government. "Government involvement is very much needed to expand the use of electric vehicles. It will speed up their development, encourage buyers, and assist in the necessary infrastructure development," he said.
He added that the model that Better Place and the Japanese government are testing could easily be copied to other cities around the world.
During the Tokyo test run, all aspects related to the operation of an electric car will be tested, including the distance of a journey, the influence multiple charges have on the lifespan of a battery, and the vehicles' convenience.
Better Place sources said that a wide-scale test will be held in Israel after the Tokyo experiment, and will include charging stations and battery-switching stations.
It should be noted that a number of electric car tests have been conducted around the world in the past two years. For example, BMW leased some 100 electric Minis in New York for a year-long trial. During the test period a number of problems were revealed, including shorter ranged than planned by the manufacturer, as a result of the cold weather in the winter.
April 29th, 2010, 03:41 AM
Honda's profit soars due to Asia, cost cuts
Honda Motor Co. said Wednesday both its group net and operating profit in fiscal 2009 soared more than 90 percent on the back of strong sales in Asia and its cost-cutting efforts.
For the business year through March, Honda reported a net profit of ¥268.40 billion, up 95.9 percent, and an operating profit of ¥363.78 billion, up 91.8 percent, on sales of ¥8.58 trillion, down 14.3 percent.
Honda topped its earlier forecasts thanks to brisk demand for the new Step WGN minivan in Japan and strong motorcycle sales in India, Indonesia and Thailand.
For the 12-month period, Honda sold 3.39 million vehicles worldwide, down 3.6 percent from the year before, with the decline partially offset by a boost in demand in China, India and Brazil.
Sales in Japan rose 16.2 percent to 646,000 units on the back of government tax breaks and subsidies to promote the purchase of fuel-efficient cars.
Looking ahead, the company said it expects to sell 3.62 million units globally in fiscal 2010.
Govt to boost fashion exports to 800 bil. yen range
The Economy, Trade and Industry Ministry aims to boost textile and fashion exports to the 800 billion yen range within three years, up from about 690 billion yen in 2009, according to a panel report.
The move will take advantage of the growing popularity in other Asian countries of the fashion seen in Tokyo's Shibuya and Harajuku areas.
The ministry panel estimates annual future fashion exports could reach 1 trillion yen.
The report released Monday proposes that Tokyo exhibitions of fashions popular among young Tokyoites are held across Asia to create business opportunities.
It also recommends that a business hub be set up in Shanghai. The government should also provide operational and financial support for small and midsize firms collectively looking to expand overseas.
The government intends to capitalize on the "cool Japan" movement--where modern Japanese culture including films, music and TV games is promoted overseas--to increase fashion exports.
May 4th, 2010, 08:41 PM
New energy laws a boon, bust
Companies are feeling the heat in their efforts to conform with new regulations to combat global warming.
The revised Energy Conservation Law took full effect in April, and the Tokyo metro-politan government launched a mandatory emission trading scheme the same month.
As consumer spending remains sluggish, the energy-saving regulations are weighing on companies such as retailers and restaurant operators. However, electrical appliance manufacturers have high hopes that the rules will provide a much needed boost to their businesses.
Kohei Koide, in charge of environmental sustainability operations at the izakaya restaurant chain Watami Co., said, "We want to carry out both energy-saving and cost-cutting measures at the same time."
After the law was revised, Watami's restaurants--about 600 stores nationwide--became subject to the energy-saving regulations.
Watami has built an energy-saving flagship store in Shibuya Ward, Tokyo, in which light-emitting diode bulbs are used instead of conventional lighting to reduce power consumption. Compared with the chain's original outlets, carbon dioxide emissions have been cut 25 percent, and electricity consumption has declined 31 percent. Currently, LED lights are used at 14 Watami stores, and the company plans to install LEDs at a further 40 stores before the fiscal year is through.
Meanwhile, amid a slump in consumer spending, many retailers are concerned that the new regulations are pushing their businesses further toward the edge.
Supermarket operator Ito-Yokado Co. has seen the number of its outlets subject to the new regulations increase from 110 to 177. The company recently installed a heat-storage air conditioning system and solar power generation devices at its Kamiooka store in Yokohama. CO2 emissions have been slashed by 15 percent. However, the measures cost the company 350 million yen, double the price of conventional systems.
Major department store operator Takashimaya Co. began installing LED lights at its stores in 2008, with completion scheduled for 2012. The company plans to spend about 10 billion yen on environmentally friendly measures, such as converting to an energy-saving air conditioning system.
Jiro Hokazono, vice general manager of facility development at fitness club operator Renaissance Inc., said, "At times like this, we can't afford to implement energy-saving measures that also increase our costs."
With about 100 outlets nationwide, the Sumida Ward, Tokyo-based company has introduced an online graph system that allows employees to check each outlet's energy consumption. By comparing their rankings on the Web site, the company aims to make its branches compete with each other to conserve energy.
Unlike these companies, the electrical appliance industry is pleased with the new regulations.
Firms such as Fujitsu Ltd., NEC Corp. and Mitsubishi Electric Corp. are receiving a steady increase in orders from offices and retailers for systems that visually measure energy consumption.
Fujitsu has developed a user-friendly system that allows users to enter data and quickly identify areas where energy can be saved, according to Tomoyuki Fujiwara, general manager of Fujitsu's division in charge of environmental measures. More than 50 companies have adopted Fujitsu's technology.
Meanwhile, Toshiba Corp. halted production of its energy-consuming incandescent bulbs in March. The company said it is instead focusing on LED lights, as demand is expected to grow alongside corporate efforts to save energy.
India, Japan set to conclude trade pact in 2010: minister
NEW DELHI (AFP) – India and Japan should be able to conclude a free trade pact to liberalise commerce this year, a minister said Friday.
Talks between the two countries had been bogged down over how much to reduce tariffs by and whether Japan will ease its tight regulations to allow Indian generic drugs.
But Indian Commerce and Industry Minister Anand Sharma said New Delhi and Tokyo should be able to wrap up a deal in 2010.
"India and Japan are engaged in Comprehensive Economic Partnership Agreement (CEPA) negotiations and we will be able to clear this by the time the next bilateral summit takes place," Sharma told a business function.
The summit is scheduled to be held later this year in Japan and Prime Minister Manmohan Singh will be attending it, Sharma said, according to the Press Trust of India.
Sharma also said he will lead a large business delegation to Japan in the coming months to enhance economic ties between the two countries.
The Press Trust of India reported that officials from the two countries held talks here for three days earlier in April and were believed to have resolved several stumbling blocks to the market opening pact.
Issues such as liberalising sectors like pharmaceuticals and services -- areas of great interest to India -- have been settled, the officials added.
Once the free trade agreement comes into effect as many 9,000 products -- ranging from steel and clothing to drugs and machinery -- are expected to be traded either without duty or at substantially reduced tariffs.
But the pact would keep a number of items, sensitive to the agriculture and employment-oriented sectors, out of the deal.
Each side will also have a so-called "negative list" of items on which duties will not be reduced but India's list would be bigger, the Press Trust of India said.
Bilateral trade between India and Japan has more than doubled over the past four years to about 11 billion dollars in 2008-09, the latest year for which figures are available.
Rise of the e-book presents major challenges for future of publishing industry
With e-readers proving increasingly popular -- prompting many observers to dub 2010 the inaugural year of e-books -- the industry has involved the government into a serious discussion on the digitization of books to answer such questions as: will books made of paper disappear? And, how will reading styles change?
To deal with the coming "era of e-books," 31 major publishing houses including Kodansha and Shinchosha have come together to form the Electronic Book Publishers Association of Japan (EBPAJ).
"The ramifications of a burgeoning e-book market for the Japanese publishing industry is not something that can be ignored," said Yoshinobu Noma, senior executive vice president of Kodansha and the head of EBPAJ, at a press conference at the organization's inaugural meeting in Tokyo in March.
Also in March, the Ministry of Internal Affairs and Communications; the Ministry of Education, Culture, Sports, Science and Technology; and the Ministry of Economy, Trade and Industry gathered writers, publishing and telecommunications companies for a conference on the promotion of widespread utilization of publications. A "Japanese-style" publishing business model is currently under review, and a report on such issues as the creation of e-book data standards is expected to be compiled by the end of June.
Major U.S. Internet search company Google's one-sided digitalization of published books is said to be what kick-started the frantic public- and private-sector discussion on e-books in Japan. But another motivating factor has been the popularity of U.S. online retail giant Amazon.com's Kindle e-reader, and the sense of impending crisis that its effects will spill over into the Japanese publishing industry.
Kindle, which went on the market in November 2007, is currently available in English only but is sold in over 100 countries around the world, including Japan; over 3 million have been sold in the U.S. alone. Meanwhile, Apple's new iPad tablet computer has also seen brisk sales. In the U.S., more than 500,000 iPads were sold within the first week of its release, and its launch in Japan has been postponed by a month because production cannot keep up with demand. The mystique that inevitably surrounds a rare product has made the iPad even more popular.
According to Tokyo-based media research company Impress R&D, the e-book market has been expanding every year. A fiscal 2009 prediction said that it would increase by over 10 percent from the previous year, making it a 52 billion yen industry. Cell phones in particular have been a driving force in this growth, with comics read via cell phones accounting for 70 to 80 percent of the market.
Many in the publishing industry point to the "mistake" of digitization made by the music industry, in which the availability of music on line brought down CD sales. One EBPAJ official says that the association is searching for a way to generate profits from a medium that's being sought by the times. "Achieving a balance between print and digital publications or the issue of copyrights are not things that can be dealt with by individual publishing companies anymore; they are problems that must be tackled with industry-wide efforts."
This reporter had a chance to play around with the Amazon's Kindle DX, which went on sale in Japan in January, at Amazon Japan in Tokyo's Shibuya Ward. The reader takes only a few seconds to boot up, a pleasant surprise for those of us who have no patience for the time it takes our computers to turn on. The black-and-white screen may be easy on the eyes, but makes the device look rather plain. At 26.4 centimeters by 18.2 centimeters, with a thickness of 0.96 centimeters and weighing in at 535.8 grams, it's compact but can hold approximately 3,500 books.
Readers can select books from 23 genres. Or type in "Murakami" on the small keyboard at the bottom of the device, and a list of Haruki Murakami's books appears on the screen. Unfortunately, the most recently published "1Q84" is not available, so I selected "Kafka on the Shore" instead to find that the first chapter is available for browsing free of charge. There's also a plot summary and comments from those who've read it. Downloading the book costs $11.99, and there is no telecommunications charge.
"Kafka on the Shore" is probably not available at small neighborhood bookshops. You could easily buy it online, but it takes a few days for the book to be delivered. Only the English version is available on Kindle at the moment, but once Japanese books hit the market, being able to buy books in "under 60 seconds," as touted by Amazon will no doubt increase the device's appeal to Japanese readers. There's a read-aloud feature, which does just that, and six font sizes to choose from, increasing ease of use for older or disabled consumers. There's a convenient built-in dictionary, and if you turn the screen on its side, the words automatically do the same. Once you go Kindle, it'll be tough to go back.
Available currently on Kindle are 390,075 English books, but the number is expected to keep rising. Meanwhile, of the 110 newspapers from 17 countries that are also available, two are from Japan, including the Mainichi Daily News.
Using e-readers means you no longer have to take the time to re-sell your books to used bookstores to clear out space in your room. But the thought of accidentally losing all my data -- that is, all my books -- makes me cringe. The books I've read represent my life and the person I am. I've never had to worry about losing all of my print books at once. Perhaps my need to have tangible objects is a sign that I am behind the times. (By Yo Naito, City News Department)
May 5th, 2010, 08:39 AM
What do you guys think of this? I think it's a good idea!
Appliance makers turn to infrastructure
Electronics makers are shifting their focus to overseas infrastructure projects, such as railways and nuclear power plants, as their core product lines face increasing competition.
It has become increasingly difficult to make profits on high-tech items as new rivals entered the market and fueled price wars.
Infrastructure projects look promising because global demand is expected to surge for environmentally friendly systems.
On Friday, industry minister Masayuki Naoshima met with representatives from the Indian government in New Delhi, leading a delegation that included Hiroaki Nakanishi, president of Hitachi Ltd., and Norio Sasaki, president of Toshiba Corp.
A group of Japanese companies, including Hitachi and Toshiba, exchanged a memorandum of understanding with officials of an Indian local government for a feasibility study on the Delhi-Mumbai Industrial Corridor project.
The $90-billion (8.5 trillion yen) project includes the construction of a 1,500-kilometer freight railway between Delhi and Mumbai, industrial communities and the next-generation smart grid technology to transmit electricity.
Hitachi, which posted a net loss for four straight years since fiscal 2006, is pushing the railway business to help turn around its operations.
In March, the company announced an ambitious five-year plan to bolster overseas sales to 60 percent of its railway business from the current 20 percent.
Sales related to Hitachi's railway business are projected to increase from about 170 billion yen, less than 2 percent of its consolidated sales, to 350 billion yen in fiscal 2015.
The company plans to build several factories in Britain in an effort to win a trunk railway project in the country and also expand its business into continental Europe.
Toshiba, which rivals Hitachi in the heavy electric machinery sector, defines nuclear power generation as its lifeline.
The company expects to win projects to build 39 reactors by fiscal 2015.
Toshiba controls the biggest share--28 percent--of the global market with Westinghouse Electric Corp., a U.S. reactor builder it purchased in 2006 for 600 billion yen.
On Monday, transport minister Seiji Maehera and Yoshito Sengoku, minister for national policy, met with Vo Hong Phuc, Vietnam's minister of planning and investment, in Hanoi to ask Vietnam to award an order for two nuclear power reactors to Japanese companies.
Senior officials from power utilities and electric machinery makers involved in the nuclear power business were also present.
The same day, Maehara agreed with his Vietnamese counterpart, Ho Nghia Dung, to carry out a study to build a high-speed railway system in Vietnam once its legislative body approves a plan to adopt Japan's Shinkansen technology.
While government support is critical for many infrastructure projects abroad, Sharp Corp., known for flat-panel TVs, is going it alone.
The company will set up a joint venture with Enel, Italy's largest electric power company, early next year for building solar power plants in countries along the Mediterranean.
Sharp will also produce cutting-edge thin film-type solar cells in Europe, taking advantage of its liquid crystal display technology.
Solar cells themselves are expected to eventually follow the pattern of other household appliances, falling in price with the entry of Chinese makers and other rivals.
In exchange for transferring some of its key technologies overseas, Sharp expects stable revenue sources over the long term from its solar power generation projects.
Japanese electronics makers moving into infrastructure projects look up to General Electric Co. of the United States as their model.
GE, once the leading maker of household appliances, has remained highly profitable by refocusing on infrastructure businesses and finance.
In the period from January to March, GE chalked up about 80 percent of its operating profit from infrastructure-related businesses, such as building power generators.
Fumiaki Sato, a longtime electronics industry analyst, said a drastic industry realignment is required for electronics makers to remain competitive globally.
"Makers should integrate the same lines of businesses to solve their problems," Sato said. "With an injection of new management and funds, it is essential to turn themselves into companies filled with entrepreneurial spirit."
Deflation's end on the horizon?
The Bank of Japan's semiannual "Outlook for Economic Activity and Prices" on April 30 said the nation's consumer prices should stop falling in fiscal 2011 for the first time in three years. It predicts that the core consumer price index, which excludes volatile perishable food prices, will rise 0.1 percent in fiscal 2011 from the previous year, instead of dropping 0.2 percent as forecast in January.
BOJ Gov. Masaaki Shirakawa said, "The Japanese economy is steadily moving forward to escape deflation." But the BOJ and the government should not expect that the fight against deflation will be an easy job. Indeed, the projected core CPI rise of 0.1 percent is still small.
In March, the core CPI fell 1.2 percent from a year earlier — the same rate of decline as in February — marking the 13th straight monthly drop. The BOJ predicts that the core CPI in fiscal 2010 will fall 0.5 percent from the previous year, excluding the effect of the introduction of free tuition at public senior high schools. In fiscal 2009, the index fell a record 1.6 percent.
As reasons for its rather positive forecast for the price movement, the BOJ cited good performances of enterprises in the business year that ended in March and strong exports to emerging economies such as China and India.
The BOJ hopes that the improvement in corporate profits will lead to increased capital investment, thus improving the employment situation and wages, which in turn will help buoy consumer spending and housing investment.
But consumers may not loosen their purse strings because the employment situation is not good. The unemployment rate in March rose 0.1 point from the previous month to 5 percent — the first rise in four months. Especially, the jobless rate for men rose 0.4 point to 5.6 percent. There is also fear that the effects of the government's stimulus measures — such as subsidies for the purchase of eco-friendly products — will wane.
The BOJ and the government should flexibly take the steps necessary to help consumers feel confident about the economy and start spending more.
May 7th, 2010, 09:04 PM
Govt steps up Japan-brand sales efforts
Cabinet ministers are globe-hopping to help Japanese companies sell their specialized products and technology, such as Shinkansen bullet trains and nuclear power plants.
Company officials accompanied the ministers, in an attempt to revive competition against rival countries like France and South Korea.
The sales efforts involved members of both the public and private sectors, such as executives from Central Japan Railway Co. (JR Tokai).
According to the Economy, Trade and Industry Ministry, global investment in railways and other essential infrastructure is expected to reach 41 trillion dollars (about 3.85 yen quadrillion) by 2030.
This growth is due to an increased desire for nuclear power plants that do not emit greenhouse gases and for efficient high-speed train lines for economic stimulus.
Land, Infrastructure, Transport and Tourism Minister Seiji Maehara visited the United States hoping to export Japan's maglev and Shinkansen technology.
At a press conference on April 30, Maehara emphasized, "Unless the government and business unite to tackle the issue, even excellent technology won't be adopted."
The U.S. government plans to build 11 bullet train lines with a total distance of 13,700 kilometers at an expense of 13 billion dollars (about 1.22 trillion yen).
With the U.S. plan in mind, the government in April revised regulations allowing the Japan Bank for International Cooperation to make loans to industrialized countries for high-speed train projects.
The government will also host U.S. Transportation Secretary Ray LaHood from Sunday to Wednesday to have him ride the Shinkansen and maglev trains.
However, JR Tokai Chairman Yoshi-yuki Kasai, who accompanied Maehara to the United States, told reporters, "Japan's efforts lag behind other countries."
Another JR official also expressed concern, saying, "Japanese companies might not win any U.S. train contracts."
As an example of the stiff competition, a Florida high-speed train line has 22 companies bidding for the contract.
Maehara said, "I thought the number would be five or six at most. On the trip I got a glimpse of how fierce the competition in the high-speed train business is."
France and Germany are at an advantage with their public and private sectors working together. China is also looking to export its high-speed train technology, charging lower prices than its rivals.
Yoshito Sengoku, state minister for national policy, attended the opening ceremony of the Shanghai World Expo and then traveled to Vietnam on Sunday, where he promoted Japanese nuclear power and bullet train technology.
Vietnam plans to build four nuclear power reactors.
Two contracts will probably be won by Russia, which sells the reactors together with submarines as a set. Japan, France and South Korea will likely compete for the two remaining reactors.
Prime Minister Yukio Hatoyama sent a personal letter to Vietnamese Prime Minister Nguyen Tan Dung, but it remains uncertain if Japan's bid will be successful.
Japan did win an Indian urban development contract utilizing Smart Grid, a next-generation electric power supply network, costing about 120 billion yen.
Economy, Trade and Industry Minister Masayuki Naoshima attended an April 30 signing ceremony between the Japanese business consortium and an Indian state government. "We hope to popularize this successful model throughout Asia," he said.
To increase contracts won by Japanese companies, the central government's aid is important, but a system to handle projects in an integrated manner is also needed.
For example, France provides services for everything involved in a nuclear power plant, from construction to operations, fuel supply and the processing of used fuel.
Japanese infrastructure firms, railway companies, power companies and those involved in the operation and management of finished facilities must increase their collaboration.
Japan's steel exports hit record high in FY 2009
TOKYO, May 6 (AP) - (Kyodo)—Japan's steel exports rose 14.2 percent to a record 39 million tons in fiscal 2009 through March, boosted by a surge in Chinese demand, an industry body said Thursday.
The previous record was 38.45 million tons in fiscal 2007, according to the Japan Iron and Steel Federation.
In March alone, exports soared 60.6 percent to 4.21 million tons, an all-time high for any month, the federation said.
By country, exports to South Korea, the largest destination for Japan's steel exports, climbed 26.6 percent to 10.78 million tons, followed by China with 7.09 million tons, up 15.6 percent.
Exports to South Korea also received a boost from strong demand in China, which benefited South Korean makers of consumer electronics incorporating Japanese steel products, it said.
Meanwhile, Japanese firms' combined crude steel production for the April to June quarter is estimated at 27.65 million tons, up 44.8 percent, according to the Economy, Trade and Industry Ministry. The projection is up 5.7 percent over the ministry's preceding estimate as of the end of March.
Crude steel output for all of fiscal 2010 is projected to eclipse 100 million tons for the first time in two years, it added.
Japan panel calls for targets on yen, inflation
TOKYO, May 6 (Reuters) - A Japanese ruling party panel called on the government and the Bank of Japan on Thursday to make utmost efforts to keep the yen at "appropriate levels" as part of efforts to pull the world's No.2 economy out of deflation.
It also urged the central bank to set an inflation target and take other "bold steps" to end price falls.
The panel did not mention a specific yen level, though another group of mostly junior party lawmakers has urged the government to target a dollar/yen rate of around 120 yen JPY= and inflation of 2 percent. [ID:nSGE63M0FX]
"Efforts must be made through monetary policy and other means to keep currencies at appropriate levels so as not to distort trade and financial markets, while gaining understanding from the international community," the panel said in a draft report.
"Japan should implement and continue drastic monetary easing until it ends a deflationary situation and asset deflation including stock and real estate, and carry out necessary institutional reforms," the sub-committee said in the report.
The yen was around 93.40 yen to the dollar on Thursday. Japan's core consumer prices fell 1.2 percent in the year to the end of March, marking 13 straight months of annual falls.
The panel is among the three sub-committees of a Democratic Party committee tasked with drafting the party's campaign platform for an upper house election expected in July.
The committee, which consists of senior party members and cabinet ministers, will meet on Monday to discuss whether to incorporate the panel's proposals in the campaign platform.
The platform will be finalised by the end of May.
May 8th, 2010, 01:53 AM
^^ Kitty do you have any other link's to sources about exporting Shinkansen?
Sweden is looking to build tree lines of +350km/h trains, but we want to build them here,
so is this a technology deal?
I know that Spain almost got Shinkansen, but then they are connected to France and the rest of EU to much, so no deal was made.
Sweden is not connected to Europe much, and trains here also go on the opposite track then in Germany, also the link to EU (Denmark) has different voltage, so our trains don't go to EU much.
May 8th, 2010, 02:01 AM
^^ Kitty do you have any other link's to sources about exporting Shinkansen?
Sweden is looking to build tree lines of +350km/h trains, but we want to build them here,
so is this a technology deal?
I know the Spain almost got Shinkansen, but then they are connected to France and the rest of EU to much, so no deal was made.
Sweden is not connected to Europe very much, and trains here even go on the opposite track then in Europe, also Denmark has different voltage, so our trains don't go to EU much.
Hows this article.
Japan wants to sell bullet train system to 5 areas in U.S. (http://www.japantoday.com/category/technology/view/japan-wants-to-sell-bullet-train-system-to-5-areas-in-us)
Japan aims to win orders for its bullet train system in the United States and will focus on the northeast, Florida, California, Texas and Chicago, transport minister Seiji Maehara said Friday.
Maehara told a regular news conference that he has ‘‘won a certain level of understanding from the United States for Japan’s shinkansen bullet train technologies’’ during his recent visit to the country.
The United States plans to build 11 high-speed railway routes across the nation, including those in the five areas which have been especially targeted by two Japanese railway operators to sell their shinkansen technologies. The minister’s remarks suggest the government will support the private sector’s attempt.
Maehara, minister of land, infrastructure, transport and tourism, visited the United States between April 29 and May 1 to make a pitch for Japan’s bullet train system. He later visited Vietnam.
East Japan Railway Co, known as JR East, and Central Japan Railway Co, or JR Tokai, hope to sell their bullet train systems to the United States and put priority on the five areas.
Japanese firms are in fierce competition with French and German companies over the sale abroad of high-speed railway systems.
Vietnam has already decided to adopt Japan’s shinkansen bullet train system for a 1,600-kilometer high-speed railway linking Hanoi with Ho Chi Minh City. The project has yet to be endorsed by the country’s legislature.
May 8th, 2010, 02:53 AM
^^ Yes something like that.
I think Shinkansen could have a very good shot at winning against Bombardier and Siemens in Sweden,
if they team up with a local company and the price was good.
If some loans where included it would be irresistible, as these projects are very difficult to sell to tax payers outside the metro areas
(a lot of bridges have been built that way).
That might not be ideal for the seller,but any trains sold in Europe is better then Siemens and Bombardier owning 100% of the European market.
I could guarantee lots of positive publicity if they just made a little bit of effort in promoting there products here.
Unfortunately I believe JR&co think all of Europe is lost, so they might not even bother.
Still I will write some E-mails and send to lot's of officials and see what they say.
May 8th, 2010, 08:09 AM
Since Sweden is in the European Union I don't think Shinkansen will ever win there.. Our best chance is Asia and USA. In europe they might design some HSR like Hitachi, but it's not "shinkansen".
May 10th, 2010, 04:28 AM
Toyota to roll first hydrogen fuel car by 2015 in US, expected price $50000
Toyota may soon become the first company to introduce hydrogen fuel cell vehicle at a very affordable price tag. This hydrogen cell vehicle is going to be a sedan but the company has doubts pertaining to the availability of hydrogen fuel stations which are very less and the price of the fuel which is more than gasoline at present. However the range of this sedan will be equal to the car powered by gasoline. Toyota is hopeful to develop the first retail hydrogen model at about $50,000 and strives to sell it as an affordable model in the U.S by 2015.
Toyota aims to cut the expenses to produce the vehicle by reducing the platinum used in the car. This use of platinum can be cut to about one third by using cheaper ways to produce the thin film used in fuel cars. The company also does not want to lose money while introducing the vehicle and aims to cover the production cost within the price offered.
While speaking about the use of less platinum in the car to cut the cost at a press conference in Long Beach, Yoshika Masuda, MD for advanced autos Toyota said, “Shifting from low volume assembly to mass production would lead to further cost reduction.” He also informed that hydrogen vehicles are larger and offer a much faster fuelling than battery models.
But there are certain challenges that the company needs to overcome in developing hydrogen car such as lack of infrastructure that includes fuel stations, high production costs and limited durability of the vehicle. Masuda however declined to mention any sales volume target that the company has kept in mind given these constraints.
The development of hydrogen cars is a step forward to curb greenhouse gasses as there is no dangerous emission from such cars. The only exhaust such cars produce is water vapor. Many countries like Japan, California, Germany and South Korea are encouraging the development of such hydrogen cars. Not only Toyota but there are other auto giants who are looking forward to venture into developing hydrogen cars by 2015. These companies include, GM Co., Hyundai Motor Co., Daimler AG and Honda Motor Co.
Let 'elderly' get new start as firms force retirement
Japan's population is forecast to dwindle to less than 90 million by 2055 and the percentage of elderly (people at least 65 years old) will rise to 40.5 percent, according to median forecasts by the National Institute of Population and Social Security Research.
The proportion of those in the productive age bracket of 15 to 64 will fall to 51.1 percent of the total population, nearly equal to those in the nonproductive age brackets — namely, children up to 14 and the "elderly" (those 65 or older).
As recently as 2005, the elderly accounted for 20.2 percent of the total population while those of productive age, 66.1 percent. This means that one elderly person was supported by two of productive age. In 2055, however, everybody of productive age may have to support one elderly person.
Furthermore, recent statistics show that the proportion of those in the productive age bracket who are willing to work has fallen to slightly more than 60 percent — around 70 percent for men and slightly less than 50 percent for women. All these changes are bound to present a number of serious problems.
First of all, spending for medical services and nursing care will skyrocket as a percentage of household expenditure. I don't think such spending will stay below 25 percent. It will reduce household disposable income because money paid for medical and nursing care services constitutes "necessary expenses" just like income tax and other burdens.
As a result, the average household will spend less on goods and services and more on items related to medical and nursing care services, presenting an utterly gloomy future for nearly all industry segments — except hospitals, homes for the elderly and pharmaceutical manufacturers.
The second problem is that many people are forced to stop working at the "retirement" age of 60 by most corporations, even when they are willing to keep working. It has been demonstrated that people in their 60s are often in the prime of their career, making it all the more desirable to raise the corporate retirement age.
The trouble is that the retirement age cannot be abolished as long as the lifetime employment system is retained. A complementary relationship exists between lifetime employment and the corporate retirement age.
As long as a large majority of Japanese workers favor continuing the lifetime employment system, efforts must be directed toward providing employment opportunities to elderly people with the willingness, abilities and physical capacity to continue working.
If the corporate retirement age must be retained, some measures must be adopted to enable workers to reset their lives at 60. This may be done by improving vocational training for people past that age, sending elderly people with high skills to developing countries, or assigning experienced workers to workplaces where their skills are needed.
Third, more women must enter the labor market, although this could be a double-edged sword. An increase in the number of working women will reduce the per capita burden for supporting the elderly, but it will also require "outsourcing" of child care and nursing care, which in turn could cause a large financial burden on the household budget. It is impractical to expect most women to be able to move into high-paying jobs that will more than offset such expenditures.
Old-age homes will thrive as representative "silver businesses" that look after the elderly. To be accommodated at such a facility, one will have to pay a large deposit up front. Such a payment will require converting to cash many of the assets that an ordinary wage earner has accumulated in the form of savings, retirement allowances and residence. One may have to depend on one's children for part of the monthly payments after finding accommodations. One can choose to be looked after at one's home by visiting nurses, but this, too, will cost a lot of money.
A majority of elderly people living alone will have to sacrifice all of their savings and property in order to be accommodated in a full-care facility. Their children are likely to recommend this choice to reduce the risk of their having an accident at home when caregivers are away.
A probable scenario is that all the assets that an elderly person has accumulated between the ages of 20 and 60 — savings, residence, retirement allowances — will have to be diverted to pay for the deposit money required to be accommodated at a facility for the elderly. And virtually all of one's pensions will go toward food and other daily expenses at such a facility.
Demographic statistics released by the welfare ministry show that, in 2007, average life expectancy for 75-year-olds was 11.3 years for men and 15.2 years for women. This means that for the average worker, all the money earned during 40 years of hard work will have to be spent for accommodations in a home for the elderly during the final 10-plus years of his or her life.
In the not-too-distant future, stem cell and other advanced medical technologies are likely to extend life expectancy at least five years, which will only increase the amount of upfront money needed to get into a home for the elderly.
Is it fair that the quality of postretirement life should depend on individual wealth?
It is inevitable for remuneration to vary according to an individual workers' abilities and efforts. But I believe it's unfair to link the quality of an elderly person's life to the assets that he or she was able to accumulate from career wages.
During the days of high birthrates, the government spent huge sums of money on scholarships and other programs to give children equal opportunities for an advanced education. As an antithesis to equal opportunity, there is the concept of "making the result equal."
Neoclassical economists argue that levying too large a progressive income tax on the wealthy to transfer tax revenue to households on welfare will cause the rich as well as the poor to lose their motivation to work. They say such a policy is driven by a wrong idea of "making the result equal."
I'll go along with this argument when applied to those in the productive age range of 15 to 64. I cannot accept it, either logically or morally, for those 65 or over, because the concept of receiving remuneration according to one's individual skills and efforts cannot be applied to those no longer working.
Very few will dispute that disparity in parents' wealth and income creates inequality in their children's opportunities for higher education. In the United States, a number of steps have been taken to redress such inequality.
One reason the U.S. has been able to produce so many Nobel laureates is that it has provided Jewish immigrants from poverty-stricken Eastern European countries with opportunities to get a higher education free of charge and then enabled them to use their skills to the fullest extent possible in a society that values competence.
I don't have detailed knowledge of the discussions going on in the U.S. or Europe about providing equal opportunities for the elderly. I do know for sure, though, that Japanese society is aging at an extraordinary pace.
Japan is the very place where an urgent need exists for convincing programs that can provide the elderly with equal opportunities.
India, Japan working on nuclear deal to boost 123 Agreement
India and Japan are quietly working on an inter-governmental agreement on civilian nuclear energy so that the 123 Agreement between India and the US, currently in the last lap of political negotiation before the US Congress, can be fully implemented on the ground in India.
According to the broad contours of this agreement, New Delhi will promise not to conduct any more nuclear tests in exchange for Japanese permission to its companies, Hitachi, Toshiba and Mitsubishi to go ahead and partner with US and French companies seeking to build civilian nuclear plants in India.
The India-Japan agreement, in fact, very much mirrors the 123 Agreement between India and the US. New Delhi’s promise not to conduct any nuclear tests in the Indo-US nuclear deal is also accompanied by the vow that it will return all material and equipment to the US in case that happens.
In a little noticed development last week in Delhi, the ongoing energy dialogue between Planning Commission Deputy Chairman Montek Singh Ahluwalia and the powerful Japanese minister for economy, trade and industry, Masayuki Naoshima, resulted in the creation of a sixth working group on civilian nuclear energy, which also had its first meeting the same afternoon.
Over the next few weeks, senior officials from the Ministry of External Affairs will travel to Tokyo to take forward the deliberations of the sixth working group with the director general of the Agency of Natural Resources & Energy, T Ueda.
Both sides are now hoping that the inter-governmental agreement between India and Japan on civilian nuclear energy issues will be signed when the Japanese foreign minister visits India later this year.
But both sides are equally interested in keeping negotiations under wraps because of the extremely shaky nature of the current Democratic Party-led government under Prime Minister Yukis Hatoyama, whose Socialist party coalition partners have a strong anti-nuclear focus and could even walk out of the government.
Considering Japan is the only country in the world to have experienced the horrors of nuclear war first hand, Japanese public opinion was outraged when the erstwhile Taro Aso government in 2008 allowed the Nuclear Suppliers Group to make an exception for India and allow the Indo-US nuclear deal to go through.
Now, New Delhi is taking this energy relationship to the next level and hoping to formalise it through a bilateral pact.
The incredible importance of Japan’s acceptance of the Indo-US nuclear deal is little understood by the lay Indian public. The fact is that the two US companies pushing to build civilian nuclear plants in India, General Electric and Westinghouse Electric Co (WEC), are either partly or wholly owned by Japanese companies. GE and Hitachi came together in a 60:40 per cent international joint venture in 2006, while Toshiba Corp. bought Westinghouse outright in 2006 for $4 billion.
In fact, Japan’s Mitsubishi Nuclear Fuel Co was in December 2008 restructured as a comprehensive nuclear fuel fabrication company, with a 30 per cent stake by the French firm Areva, so as to allow it to expand domestic operations into overseas markets.
Since these companies are so intimately tied into the Japanese companies, Tokyo has long been telling New Delhi that the Indo-US deal cannot be fully implemented on the ground unless Japan allows its own companies to further empower its US and French partner companies to sell civilian nuclear technology to a country (India) which has not signed the Nuclear Non-Proliferation Treaty.
Since without Tokyo’s permission the 123 Agreement — soon to face the US Congress for final ratification — cannot be implemented on the ground in India, the need for an intergovernmental agreement had become pressing.
Meanwhile, the government introduced the nuclear liability Bill on the last day of the Budget session of Parliament on Friday. The Bill will be scrutinised by the standing committee headed by Samajwadi Party leader Mulayam Singh in the interim months before the monsoon session opens in July.
The US has told India it cannot put the leftover “procedures and arrangements” related to the 123 Agreement before the US Congress unless the nuclear liability Bill is passed by the Indian parliament.
India has already committed to Areva to build a nuclear power plant at Jaitapur in Maharashtra, the US has got two sites in Gujarat and Andhra Pradesh and the Russians, besides expanding the site at Kudankulam in Tamil Nadu will also set up another plant in Haripur, West Bengal. Each country has been allotted the manufacture of approximately 10,000 Mw of nuclear energy so that India can meet its target of 40,000 Mw by 2032.
May 10th, 2010, 07:12 AM
Panasonic sees return to profit on TV sales abroad
Panasonic Corp. said Friday it expects to return to the black in fiscal 2010 for the first time in three years as it counts on an increase in television sales backed mainly by robust demand in emerging markets.
For the current financial year through next March, Panasonic projects a net profit of ¥50 billion. It also anticipates an operating profit of ¥250 billion, up 31.3 percent, on sales of ¥8.8 trillion, up 18.6 percent.
Panasonic, the world's top maker of plasma display TVs, said it expects to sell 21 million flat-panel TVs — including plasma and liquid crystal display — during the year, compared with 15.84 million units sold in fiscal 2009.
Panasonic executive officer Hideaki Kawai told reporters the company expects to stem the decline in TV prices through its recent launch of 3-D TVs, which are priced higher than normal models.
"Emerging countries are expanding faster than expected . . . so we anticipate an overall steady though moderate (economic) recovery," Kawai said at a news conference in Tokyo.
Though Panasonic, which turned Sanyo Electric Co. into a subsidiary late last year, posted a net loss of ¥103.47 billion on restructuring costs in fiscal 2009, this was sharply lower than the previous year's loss of ¥378.96 billion.
Its operating profit jumped 161.3 percent from the previous year to ¥190.45 billion on sales of ¥7.42 trillion, down 4.5 percent.
Kawai said TV sales jumped about 20 percent in Japan thanks to the government's Eco-point program, which rewards the purchase of energy-efficient home appliances like TVs, air conditioners and refrigerators.
Toshiba in the black
Toshiba Corp. said Friday it swung back into the black on a group operating basis in fiscal 2009 as the semiconductor division reduced an operating loss substantially on robust memory sales.
In the year that ended in March, consolidated operating profit totaled ¥117.19 billion against the previous year's loss of ¥250.19 billion, while group sales fell 4.1 percent to ¥6.38 trillion. Group net loss narrowed to ¥19.74 billion from ¥343.56 billion.
Toshiba skipped the dividend for fiscal 2009 after paying ¥5 per share the previous year.
All its four major divisions improved profitability despite falling sales.
In particular, the electronic device division cut its operating loss by ¥299 billion to ¥24.2 billion, while sales fell 1 percent to ¥1.31 trillion. The infrastructure equipment division, which handles nuclear power generation devices, expanded its operating profit by ¥23.1 billion to ¥136.3 billion.
May 11th, 2010, 05:18 PM
Japan eager to cut debt issuance amid concerns over sovereign risks
The government aims to cut its new debt issues for the next fiscal year, considering growing sensitivity in global financial markets toward sovereign debt risks as a result of the Greek crisis, Finance Minister Naoto Kan said Tuesday.
Japan is issuing 44.3 trillion yen worth of government bonds for the initial budget of the current fiscal year through next March.
"Sovereign risks are attracting growing attention" due to the Greek crisis, Kan told reporters, adding that Tokyo will accelerate its efforts to impose fiscal discipline. "We'll make every effort not to surpass 44.3 trillion yen," he said.
While acknowledging the importance of ensuring fiscal discipline, however, Prime Minister Yukio Hatoyama denied that capping is the government's official policy.
"The government's basic stance of trying to maintain fiscal discipline remains unchanged," the premier told reporters Tuesday evening. "It's not that I don't understand Minister Kan's feelings, but we haven't even started deliberations on a budget for the next year and it is not a policy the government has decided on."
The outstanding balance of Japan's central government debt hit a record of 882.92 trillion yen at the end of fiscal 2009, which ended March 31, the Finance Ministry said Monday.
The nation's gross public-sector debt is heading to somewhere near 200 percent of its gross domestic product in 2010, by far the worst among major industrialized economies.
On the debt woes in Europe, Kan said, "It is positive that (the situation) is regaining stability with certain agreements," hailing a series of emergency measures in Europe to ensure financial stability in the eurozone.
Panasonic eyes big sales boost
OSAKA--Panasonic Corp. aims to boost its consolidated annual sales by 40 percent over the next three years to 10 trillion yen ($109 billion), with a focus on sales to emerging markets and on eco-related fields led by batteries.
The goal was spelled out Friday in the company's new mid-term management plan covering up to fiscal 2012, the first plan since it made Sanyo Electric Co. a subsidiary in December.
The plan eyes increasing sales of solar cells, storage batteries and other energy systems by 310 billion yen from fiscal 2009 to 850 billion yen in fiscal 2012.
The electronics maker also plans to target mid-income families in 11 emerging markets--Brazil, Russia, China, India, Vietnam, Mexico, Indonesia, Nigeria, Turkey, Saudi Arabia and the Balkans--pushing up sales by 330 billion yen to 770 billion yen over the same period.
Officials also said development and production of "white" home appliances, such as washing machines and refrigerators, will be integrated under the Panasonic brand.
Toshiba plans $6.4 bn chip spending in 3 years: Paper
TOKYO: Japan's Toshiba Corp plans to spend $6.4 billion on its chip operations in the next three years to meet strong demand and keep up with
cutting-edge technology, the Nikkei business daily reported on Tuesday.
The spending plan by the world's No. 3 chipmaker is further evidence of growing optimism in the sector, which expects strong demand this year as an economic recovery encourages consumers to buy new electronics
May 11th, 2010, 10:38 PM
^^ What is the state spending all this money on?
Considering that a lot of things that are free elsewhere will cost money in Japan,
and also JP has not really payed for it's defense in 60 years, it really puzzles me that Japan has so much public debt.
I read somewhere that people where given money by the state to spend,
as a way to try and stimulate the economy, is this true?
/Thanks for answers.
May 11th, 2010, 10:41 PM
It happened after the asset bubble popped (which was caused by the Plaza Accord by the Americans). During the 1990s "stimulus" measures. Most of that debt is owned by japanese themselves though (95%).
May 12th, 2010, 06:14 AM
Toyota back in the black a year ahead of schedule
Despite a tough year marked by quality-control problems, recalls and record-breaking fines, Toyota Motor Corp. still managed to return to profitability a year ahead of schedule.
Toyota President Akio Toyoda announced the company's return to the black on Tuesday in releasing the company's financial results for the fiscal year ended March 31.
The automaker recorded operating profits on a consolidated basis of 147.5 billion yen ($1.58 billion), a huge turnaround from the 461 billion yen operating loss recorded in the previous fiscal year.
When Toyoda took over as company president last June, the global automotive market was reeling from the after-effects of the financial crisis triggered by the collapse of Lehman Brothers. He said then that the company would seek to generate operating profits by the fiscal year ending in March 2011.
Toyoda said achieving operating profits a year ahead of schedule means, "We are able to stand at a new starting line for sustained growth."
The automaker also forecast that the upward trend would continue in the current fiscal year, with a predicted 280 billion yen in operating profits, an increase of 89.8 percent.
It remains unclear if Toyota can achieve that figure because there is the possibility of unexpected expenses, stemming in part from class-action lawsuits filed in U.S. courts over the series of recalls of Toyota models in the previous few months.
Consolidated sales for the fiscal year ending March 31 came to 18.95 trillion yen, a 7.7-percent decline over the previous fiscal year. It was the first time in five years that Toyota's consolidated sales fell below 20 trillion yen.
A total of 7.24 million vehicles were sold, including those manufactured by Daihatsu Motor Co. and Hino Motors Ltd., a decline of 330,000 vehicles from the previous fiscal year.
Consolidated net profit was 209.4 billion yen, in contrast to the 436.9 billion yen net loss in the previous fiscal year.
Despite the rosy financial picture, Toyoda and other executives will continue to take pay cuts as a gesture of responsibility for the company's past poor corporate performance, and also to demonstrate their concern about quality-control problems that have emerged over the past few months.
Its board directors will again receive no bonuses, the same measure taken last year.
Part of the monthly pay of those in positions of executive vice president and higher will be returned to the company for a specific period.
The operating profit was achieved partly as a result of drastic cost-cutting measures taken by Toyota since the "Lehman Shock."
Sales have also been helped by incentive programs implemented by several governments.
Expenses related to the recalls, as well as the resulting sales decrease, fell within the 170 billion yen to 180 billion yen range that the company forecast in February.
For the current fiscal year, Toyota is forecasting a 1.3-percent increase in consolidated sales to 19.2 trillion yen. Combined vehicle sales are expected to rise by 53,000 vehicles to 7.29 million.
Internet firms get connected in growing Asian countries
Major Internet-related companies in Japan are forming business tie-ups in economically growing Asian countries as the number of Net users in Japan remains flat.
"It is difficult to work out growth strategies by looking only at the Japanese market," said Shuji Nakamura, a researcher at Mitsubishi Research Institute Inc. "So activities are increasing to make inroads into Asian countries where the markets are likely to expand."
Yahoo Japan Corp. said Monday it will form a business tie-up with Taobao, the largest Internet shopping site operator in China, in June.
The companies will revise their websites so that Internet users in each country can buy products of the other country.
The Yahoo! Japan website will include a "China Mall," where Japanese can buy Chinese products sold by Taobao but described in Japanese.
Combined with products sold at Yahoo! Japan, the company expects its website to sell 80 million products, 2.6 times the current figure.
More than 400 million people use the Internet in China, where the market scale of online shopping reached 248.3 billion yuan (about 3.4 trillion yen or $36.6 billion) last year.
But in Japan, the number of broadband connection contracts has recently stalled at around 30 million households.
"We expect the Asian economy will continue to grow further, led mainly by China and Japan, and that the Internet business and e-commerce business will be the core of that growth," said Masayoshi Son, chairman of Yahoo Japan. "The new service we launch in June will provide the optimal platform for all small and medium-sized businesses to engage in cross-border e-commerce."
Internet shopping mall operator Rakuten Inc. is currently ahead of Yahoo Japan in this regard. Last year, it bought 67 percent of the shares of Tarad Dot Com Co., the largest Internet shopping site operator in Thailand.
Rakuten opened an online shopping site in Taiwan in May 2008, and plans to set up a similar site in China in the near future through a joint venture with Chinese search engine operator Baidu Inc.
"We are going to make inroads into seven other countries within this year," Rakuten President Hiroshi Mikitani said.
Meanwhile, NHN Corp., a South Korean Internet content provider, paid 6.3 billion yen in May to make Japanese Internet services provider Livedoor Co. a group company.
NHN is strong in Internet search engines and online games while Livedoor is good at operating blog sites. NHN and Livedoor plan to develop new search methods by combining their strengths and fielding the opinions of users.
"(By becoming part of the NHN group,) we can adopt forward-looking strategies, such as aggressive investments and starting businesses overseas," Livedoor President Takeshi Idesawa said.
May 13th, 2010, 10:32 AM
Japan's current account surplus rise 65.1 pct on year in March
TOKYO, May 13 (PNA/Xinhua) -- Japan's current account surplus rose 65.1 percent in March from a year before, the Ministry of Finance (MOF) said Thursday.
Japan's March current account widened its surplus to 2.534 trillion yen (US$ 27.2 billion) from a 1.535 trillion yen (US$ 16.60 billion) surplus a year earlier, the ministry said. March's figures beat economists' expectations.
Additionally, the figure for the whole of fiscal 2009 climbed 26.9 percent, according to the MOF.
The current account balance is nation's way of measuring trade in goods and services and is generally the difference between a nation's exports of goods and services and its imports of goods and services.
Positive net sales abroad generally contributes to a current account surplus. (PNA/Xinhua) http://www.pna.gov.ph/index.php?idn=3&sid=&nid=3&rid=275483
May 18th, 2010, 12:12 AM
Japan Inc roars back to black
Surging corporate profits and bullish forecasts suggest Japanese companies are bouncing back from the worst recession in decades, with cost-cutting firms betting on emerging markets for growth.
Many of Japan's corporate titans saw a return to profit in the fiscal year ended March, with booming demand for new cars, electronic gadgets and factory parts in countries such as China combining with an improving domestic picture.
A $US2.2 billion ($A2.46 billion) annual profit for the world's biggest automaker Toyota despite recalling around 10 million vehicles over safety fears was emblematic of the sense of recovery, and analysts concluded it had steered through the crisis.
The benefits of restructuring and a pick-up in demand appear to be nursing the biggest companies back to health, after the hammering they received in the global downturn led to cost savings and tens of thousands of job cuts.
Exports, particularly to emerging Asia, are driving what the International Monetary Fund has called Japan's "tentative" recovery from recession and this is being increasingly reflected in the performance of Japan Inc, say analysts.
"Looking at the current figures and outlook it is clear Japanese companies are latching their hopes on emerging markets," said Okasan Securities equity strategist Hirokazu Fujiki.
Japan's third-largest automaker Nissan last week posted a return to the black and forecast profits to triple in the year to March 2011, with its eye on soaring China sales volume, which gained 48 per cent in the quarter ended March.
Chief executive Carlos Ghosn said Nissan would ramp up production to "more than one million cars a year" by 2012 as China's booming economy drives demand.
Honda cited sales in India and Indonesia driving group fourth quarter revenue 27.8 per cent higher year-on-year to $US24 billion ($A26.79 billion) with the booming Chinese market also playing a role.
And high tech giant Canon Inc pointed to a sharp uptick in exports of consumer products such as digital cameras, camcorders and image scanners to Asia as a driver that enabled its first quarter net profits to triple on-year.
"Although Japanese companies have not overlooked major Western markets like the United States, it is clear that companies are focusing their strategies on Asia," said Fujiki.
Things are also improving at home. Japan's economy is set to grow 1.8 per cent this year, according to the median forecast of Bank of Japan board members, after 2009's 5.2 per cent plummet.
The economy last year emerged from its worst post-war recession, growing at a modest 0.9 per cent in October-December due to rebounding exports, much of them to booming China, and government stimulus measures at home.
While the effect of the pump-priming would gradually diminish, "Japan's exports are likely to continue increasing against the backdrop of strong growth in emerging and commodity-exporting economies," the bank said.
However, while "Japan's economy is starting to fire on all cylinders," noted Julian Jessop of Capital Economics, "there are also still plenty of valid concerns over deflation and the lack of structural reforms to offset Japan's infamously unfavourable demographics."
Soaring welfare costs for a greying population and deflation continue to burden Japan, as falling consumer prices prompt consumers to defer purchases in the hope of further price drops, with companies looking overseas for growth.
In doing so, electronics giants such as Panasonic and Toshiba have seen losses narrow and forecast profits in the next year.
But whether the rise of emerging Asia can offset a potential debt crisis in the eurozone for Japan's exporters is another matter.
Europe's problems threaten profits given the single currency's weakness versus the yen. "Companies are conscious of uncertainty surrounding the European economy," said Fujiki.
Electronics giant Sony, which expects to return to profit in the current financial year after seeing its first back-to-back losses since it was listed in 1958, cited a potentially "grave impact" if the eurozone crisis deepens.
Europe makes up around a quarter of the company's business and any crash in consumer spending would derail progress made under a restructuring that has seen it slash 20,000 jobs, sell facilities and outsource more production.
"Due to uncertainty surrounding the European economic situation we cannot say anything too optimistic," chief financial officer Nobuyuki Oneda said.
May 19th, 2010, 10:55 AM
Japan’s Economic Recovery May Give Hatoyama Room to Tackle Debt
By Keiko Ujikane and Mayumi Otsuma May 19 (Bloomberg) -- Japan’s government, aiming to avert a collapse of confidence in its 882.9 trillion ($9.5 trillion) debt, may get a boost from a report tomorrow likely to show growth accelerated in the first quarter.
Japan, the Group of Seven economy that shrank the most during the crisis, benefited from rising exports that spurred production and helped deliver the first gain in wages in 22 months. Gross domestic product rose at a 5.5 percent annual rate from January to March, according to the median of 21 estimates in a Bloomberg survey before tomorrow’s release.
“The government can put more emphasis on fiscal discipline” with a strong GDP number, said Minoru Nogimori, an economist in Tokyo at Nomura Securities Co., a unit of Japan’s largest brokerage. “Given the Greek sovereign problem, fiscal rehabilitation is becoming more crucial.” Prime Minister Yukio Hatoyama’s administration aims to unveil a strategy next month to contain the world’s largest public debt after the collapse in Greek securities forced a European Union bailout of almost $1 trillion. The budget plan may leave the burden on Japan’s central bank to help sustain the recovery and end deflation, according to Nogimori.
Tomorrow’s report may show that the GDP deflator, a gauge of prices across the economy, fell 3 percent in the first three months of 2010 from a year before.
The measure has only risen twice in the past 47 quarters going back to 1998. BOJ policy makers as a result will keep the benchmark interest rate at 0.1 percent at a two-day meeting that starts tomorrow, according to the median estimate in a separate survey.
Deflation worsened in the aftermath of a collapse in global trade that led Japan to shrink 5.2 percent in 2009, the most in the postwar era and more than the U.S.’s 2.4 percent and the euro area’s 4.1 percent drop, International Monetary Fund figures show.
The rebound has been driven by a revival of foreign demand, especially in China, that has fueled profits at exporters from Toyota Motor Corp. to Toshiba Corp. and begun to spur wages and jobs. Unadjusted for price changes, nominal GDP for the world’s second-largest economy probably advanced 1.3 percent, the most in 10 years, a median projection shows.
“It’s a good chance for the government to take action to improve the nation’s fiscal health and prevent a sudden rise in bond yields,” said Susumu Kato, chief economist at Credit Agricole CIB and CLSA in Tokyo.
Finance Minister Naoto Kan plans to unveil a strategy next month to repair the nation’s finances. This month, he proposed extending a pledge to keep annual bond sales around 44 trillion yen by a year, through March 2012. He said that raising taxes could boost the economy if used wisely, adding to signs the government may consider increasing a levy on sales.
A legacy of deflation, four recessions since 1990, and repeated fiscal stimulus packages is a gross debt level that exceeded twice the size of GDP last year, IMF calculations show. So far, that hasn’t caused a debt crisis given demand among Japan’s domestic investors, who hold more than 90 percent of government bonds.
Benchmark 10-year bond yields have remained below 1.4 percent for most of 2010, and were 1.3 percent late yesterday, less than half the level of comparable-maturity U.S. Treasuries.
By contrast, Japanese shares have been hit by concern that the European crisis may crimp exports. The Nikkei 225 Stock Average is down 2.9 percent this year. The yen has climbed 16 percent against the euro this year, threatening to make exports to the region more costly.
Japan’s recovery is more vulnerable to a slowdown in China than Europe, said Junko Nishioka, chief economist at RBS Securities Japan Ltd. in Tokyo. “Should China fail to control inflation, that will increase the chance for a bubble to burst and damage Japanese exports,” she said.
Only 12 percent of Japan’s shipments abroad went to the European Union in the year ended March 31, compared with 19 percent to China and 16 percent to the U.S., according to the Finance Ministry.
Japanese companies are counting on overseas demand to power earnings and spur capital spending.
Toshiba, the country’s biggest memory-chip maker, plans to spend about 2.4 trillion yen over three years, and the Tokyo- based company sees overseas sales climbing to about 63 percent from 55 percent. Toyota City-based Toyota forecasts profit will climb 48 percent this year, led by demand from abroad.
Rising wages have helped prompt an end to spending cuts by Japanese consumers, with retail sales advancing for three straight months through March on a monthly basis.
Faster growth would provide some relief for Hatoyama, whose public support has tumbled ahead of an upper-house election to be held in July. The fiscal situation has prompted his Democratic Party of Japan to consider paring promises such as the doubling of a childcare allowance.
The party is debating whether to endorse Kan’s bond-sales- limit pledge, as well as raise the country’s 5 percent sales tax after the next lower-house election, due by mid-2013.
--With assistance from Minh Bui, Aki Ito and Toru Fujioka in Tokyo. Editors: Russell Ward, Chris Anstey
To contact the reporters on this story: Keiko Ujikane in Tokyo at email@example.com; Mayumi Otsuma in Tokyo at firstname.lastname@example.org
To contact the editor responsible for this story: Chris Anstey at email@example.com
FY 2009 solar cell shipments hit record 1,670 megawatts
TOKYO, May 18 (AP) - (Kyodo)—The total amount of solar cell module shipments in Japan and exports from Japan in fiscal 2009 hit a record of 1,668.53 megawatts, up 48.9 percent from the previous year, an industry body said Tuesday.
The Japan Photovoltaic Energy Association traced the surge mainly to a new installation incentive system in Japan, under which power firms began to buy solar cell-based surplus electricity generated at households at 48 yen per kilowatt-hour from last November, double its price prior to the system's introduction.
Of the total, domestic shipments of solar cell modules made in Japan and those made by foreign makers and imported into Japan soared 163.2 percent to 623.13 megawatts, it said.
Exports also soared 18.3 percent to 1,045.40 megawatts, it said.
By type of solar cell, shipments of mono-crystalline silicon cells rose 72.6 percent to 626.58 megawatts, those of poly-crystalline silicon cells increased 31.7 percent to 833.56 megawatts, and thin- film silicon cells rose 46.8 percent to 165.34 megawatts.
Shipments of other types of solar cell -- non-silicon cells including compound semiconductor cells made by Showa Shell Solar K.K., a Show Shell arm -- rocketed 261.7 percent to 43.05 megawatts, it added.
May 20th, 2010, 02:40 AM
GDP grew 4.9% (annualized) january-march.
Visa rules get easier for China tourists
In a bid to attract free-spending visitors, the government will ease visa requirements for individual Chinese tourists beginning in July, Foreign Minister Katsuya Okada said Tuesday.
Under the new rules, non-tour group visitors from China must have an annual income of 60,000 yuan (about 800,000 yen or $8,695) or possess a "gold" credit card. Current rules require a much higher annual income of 250,000 yuan (3.4 million yen).
Employees of the government or large corporations will also be eligible for the program as will their family members.
The Foreign Ministry estimates the change will expand the pool of eligible visa applicants in China to about 16 million, 10 times the current number.
The Japan Tourism Agency's working group responsible for attracting international visitors approved the new requirements at a meeting Monday.
Japan began issuing visas to individual Chinese tourists last July. The 250,000-yuan income level was intended to deter economic migrants from entering Japan and overstaying their visas.
The government issued 7,688 visas of this type through the end of last year.
According to Chinese government data, annual disposal income per urban dweller was 17,000 yuan (about 230,000 yen) in 2009, 11 times the figure in 1990.
Last year, 1.01 million mainland Chinese visited Japan in groups or individually.
In addition to group-tour visas, Japan began issuing visas to families accompanied by an official guide two years ago.
May 24th, 2010, 04:34 AM
Dollar at lower 90 yen in Tokyo
TOKYO, May 24 (PNA/Xinhua)-- The dollar traded at the lower 90 yen level in Tokyo early Monday.
The dollar bought 90.17-18 yen at 9 a.m., up from 90.03-13 yen in New York and 89.88-89 yen in Tokyo at 5 p.m. Friday.
The euro was quoted at 1.2511-1.2513 dollars and 112.80-83 yen, compared with 1.2565-2575 dollars and 113.02-12 yen in New York and 1.2499-2501 dollars and 112.34-38 yen in Tokyo late Friday.http://www.pna.gov.ph/index.php?idn=3&sid=&nid=3&rid=277367
May 25th, 2010, 01:50 AM
GDP grew 4.9% (annualized) january-march.
Oh, I didn´t know the GDP data was released on Friday. Quite good, considering that the other big export-oriented developed economy, Germany, is struggling to maintain growth in the past quarters.
Here is the BBC article about it: http://news.bbc.co.uk/2/hi/business/10129885.stm
May 29th, 2010, 06:22 PM
Japan is recovering really well..but we were also hit very hard by the recession so it's not that good overall.
Japan's exports jump 40 percent in April
TOKYO – Japan's exports jumped 40 percent in April, rising for a fifth straight month, fueled by brisk overseas demand for cars and high-tech goods in a fresh sign that the global economy is recovering.
Led by shipments of cars and semiconductors, exports rose to 5.9 trillion yen ($65 billion), the Ministry of Finance said Thursday. Automobile exports more than doubled from a year earlier, while semiconductor shipments rose 35.5 percent.
"The figures underlined a steady recovery in the global economy. It is heartening to see Japanese car exports sharply up in every key region," said Hiroshi Watanabe, economist at Daiwa Institute of Research.
Robust global demand, particularly in Asia, is feeding a turnaround in Japan's economy — the world's second-largest — offsetting weak demand and falling prices at home. Japan's exports to Asia alone account for 56 percent of total shipments.
Watanabe said a recovery in global auto sales, which plummeted during the global economic crisis in the wake of the 2008 collapse of Lehman Brothers, is vital to Japan's economic recovery.
"The auto industry is one of the key pillars of the Japanese economy. With recovering demand, auto makers can boost capital investment and increase employment, stimulating domestic demand," he said.
Recent economic signals from Japan have been fairly upbeat. Gross domestic product grew at an annual pace of 4.9 percent in the first quarter, the fourth straight quarter of expansion on the back of soaring exports to China.
Thursday's trade figures showed that U.S.-bound exports rose 34.5 percent, while exports to Asia surged 45.3 percent in April. Exports to China alone jumped 41.4 percent, while shipments to the European Union grew 19.8 percent.
Europe-bound exports rose for a fifth consecutive month, but Hideki Matsumura, senior economist at the Japan Research Institute, warned a slump in demand from the region is around the corner because of the debt crisis in European countries that use the euro.
"The crisis could dent demand for Japanese products. But its impact will be limited because Japanese exports to Europe are much smaller than those to the United States and Asia," Matsumura said.
Japan's exports to the European Union account for 11 percent of total shipments.
Europe's fiscal crisis has sparked massive selling of the euro, which is now hovering around a four-year low against the dollar. Its slide has become a symbol of waning confidence in Europe's ability to contain its debt problems.
The crisis has also rattled stock markets worldwide on fears that Europe's debt problems could stifle the global economic recovery.
Japan's imports in April rose 24.2 percent to 5.1 trillion yen, resulting in a trade surplus of 742 billion yen.
Japan's net foreign assets hit record in 2009
Japan's net foreign assets grew in 2009 to a record 266.22 trillion yen at the end of the year, as Japan's investments in stocks and bonds abroad expanded and the yen's weakening helped increase the value of overseas investments, the Finance Ministry said Tuesday.
Net foreign assets at the end of December were 18.1 percent higher than a year before, rising for the first time in two years. The previous record was 250.22 trillion yen at the end of 2007.
Japan remained the largest holder of net foreign assets in the world for the 19th consecutive year.
Finance Minister Naoto Kan, however, expressed concern about a decline in foreign investments in Japanese markets.
"It is desirable for Japanese funds to flow abroad, and so it is for (overseas) funds to come in (to Japan)," Kan told a press conference Tuesday. "We cannot take only delight (in that result)."
Net foreign assets are the sum of gross foreign assets -- direct and other investments made overseas by Japanese companies and individuals -- minus gross foreign liabilities -- direct and other investments made in Japan by foreign companies and individuals.
Kan suggested Japan needs to put its economy back on a growth track to lure foreign investors.
"We need to rebuild the fundamentals and I believe it is one of the missions for the (Prime Minister Yukio) Hatoyama administration after it achieved a change of government (last September)," he said.
Kan is a member of Hatoyama's ruling Democratic Party of Japan, which ended more than five decades of almost unbroken rule by the Liberal Democratic Party in last year's general election.
The ministry said gross foreign assets totaled 554.83 trillion yen at the end of 2009, up 6.9 percent from a year earlier, while gross foreign liabilities fell 1.7 percent to 288.60 trillion yen.
In 2009, the yen dropped 2.0 percent against the dollar, according to the ministry.
International Monetary Fund data, which do not include figures for Taiwan or Middle Eastern nations, indicate that China was the second largest holder of net foreign assets with 167.73 trillion yen, followed by Germany with 118.86 trillion yen.
June 2nd, 2010, 05:17 PM
Pasona to Reopen Underground Farm in Tokyo
24 January 2009
Tokyo, Jan. 24 (Jiji Press)--Pasona Group Inc. said Saturday the major staffing agency will reopen an underground farm in downtown Tokyo next January after it closes the existing one in April as scheduled.
When deciding to shut the current underground farm in Tokyo's Otemachi business district due to a rent rise, Pasona had no plan to create another one.
But the company now finds the urban farm indispensable to its projects to help farming attract more workers, Pasona officials said.
The existing hydroponic farm cultivates vegetables, rice and flowers using artificial light sources such as light-emitting diodes. Some 60,000 people have visited the farm since its opening in 2005.
The new underground farm will be housed in the basement of a nearby building to be rented out by a group firm, Pasona said.
June 4th, 2010, 06:51 PM
Gov't to seek hike in minimum wage to 1,000 yen by 2020
TOKYO, June 3 (AP) - (Kyodo)—Cabinet ministers agreed with leaders from labor and business circles Thursday to raise the national average of the minimum wage in Japan to 1,000 yen per hour by 2020, participants of their meeting said.
The agreement at the government's employment strategy task force will be included in a set of growth strategies to be mapped out by the government later this month, they said.
The national average of the minimum wage, which differs by prefecture, is 713 yen at present.
The ruling Democratic Party of Japan proposed aiming to raise the average minimum hourly wage to 1,000 yen and setting the lower limit on such a wage to 800 yen in its manifesto for last summer's general election.
The proposal presumes that the Japanese economy will grow a nominal 3 percent and a real 2 percent on average through 2020.
At the onset of Thursday's meeting, Prime Minister Yukio Hatoyama said the question of employment remains a "top priority issue" for the government.
Europe's debt crisis clouding outlook: Suda
WAKAYAMA (Bloomberg) Bank of Japan Policy Board member Miyako Suda said Thursday the economic outlook has grown cloudier because of Europe's deepening sovereign-debt crisis.
"Uncertainty has risen and I'm paying more attention to downside risks," Suda said in a speech in the city of Wakayama. Globally, "stock and currency markets are increasingly unstable, which could lead to a deterioration in corporate and household sentiment, hurting capital and consumer spending not only in Europe but Japan as well."
Suda is the first board member to voice caution about the outlook since the BOJ raised its economic assessment last month. Data in the past week showed capital spending tumbling, deflation deepening and unemployment rising and Europe's fiscal woes have contributed to a 6.6 percent drop in the Nikkei stock average this year.
Suda also said the BOJ will continue to maintain an "extremely accommodative financial environment" because beating deflation is a "critical challenge."
She said overheating in China and other emerging countries and a decline of growth expectations among companies in Japan also pose risks to the nation's recovery, which she said will probably be moderate.
BOJ Gov. Masaaki Shirakawa last month said the bank plans to provide one-year loans at the same rate as the 0.1 percent key overnight lending rate to encourage lending in areas that would spur growth.
The central bank has faced pressure to fight deflation from the government, whose ability to spur the economy is constrained by record public debt.
Suda said expanding fiscal spending would hurt the economy in the longer run and discourage consumption.
"Should trust in fiscal policy deteriorate, debt-servicing costs will increase because of higher yields," Suda said. That will "also hurt the balance sheets of financial institutions, increasing the downward pressure on the economy," she said.
June 9th, 2010, 11:11 AM
Kan calls restoring fiscal health his 'biggest challenge'
New Prime Minister Naoto Kan said Tuesday that addressing the problem of the government's deficit-ridden finances is the biggest challenge his government needs to tackle.
Speaking at his inaugural press conference, Kan harshly denounced previous governments led by the Liberal Democratic Party for issuing a huge amount of government bonds to fund unnecessary public-works projects without raising tax.
That has been a "structural factor behind accumulated fiscal deficits" along with ballooning welfare costs, the former finance minister said, apparently suggesting that the tax system be reviewed to possibly raise the consumption tax.
Describing the work of restoring fiscal health as "the biggest challenge" facing his government, Kan said, "Rebuilding the national finances is a prerequisite for Japan's economic growth."
There is also other evidence that the government is heading toward fiscal reform as he tapped fiscally conservative members of the ruling Democratic Party of Japan for key Cabinet posts including Yoshihiko Noda, who was senior vice finance minister in the previous Cabinet and succeeded Kan as finance minister.
Other like-minded members include Yoshito Sengoku, who assumed the post of chief Cabinet secretary, the top government spokesman, and Koichiro Gemba, who became minister in charge of administrative reform and declining birthrate issues.
During last year's general election campaign, Kan's predecessor Yukio Hatoyama promised to keep the consumption tax rate at the current level of 5 percent at least until 2013.
Kan had been cautious about raising the tax as it could hamper the government's efforts to cut waste.
But he began advocating reducing the public debt that has swollen to nearly twice the size of the country's economy, having studied Europe's debt problems during his five-month stint as finance minister, suggesting that a tax increase is one way of restoring fiscal health.
The road toward fiscal health could prove bumpy, however, as outspoken banking and postal services minister Shizuka Kamei has championed big spending to stimulate growth.
Any friction with the leader of the People's New Party could threaten the DPJ's coalition with the minor party, whose cooperation remains vital for the DPJ to ensure smooth Diet management.
In reiterating his opposition to a tax hike, Kamei said Tuesday, "If the economy becomes moribund, we won't be able to increase tax revenues no matter how drastically we reform the taxation system."
When he was finance minister, Kan also said that he would aim to keep government bond issuance in the initial budget for fiscal 2011 below 44.3 trillion yen, the level planned for the initial budget for fiscal 2010.
But the new prime minister did not make clear Tuesday if he would continue to pursue the cap on bond issuance, saying only he will discuss the matter with both the ruling and opposition parties before coming up with any government pledge on the matter, while Noda said that he will make "utmost efforts" to contain debt issuance.
In a bid to highlight his determination to rebuild the national finances, Kan spent most of the time talking about his basic stance on economic and fiscal policy during his opening remarks at the press conference.
Since he was voted in as prime minister last Friday, however, the 63- year-old veteran politician has been cautious about making remarks that could tie him down later, apparently in the belief that Hatoyama's lofty pledges drove him out of power after only eight months in office.
Noda's first task as finance minister will be to thrash out a three- year fiscal policy and a longer 10-year strategy for restoring fiscal prudence as well as a set of growth strategies by the end of June.
As part of plans to engineer economic growth, Kan on Tuesday proposed making investments in the fields of environmental technologies, and healthcare and nursing care services, while helping Japan to benefit from growth in the rest of Asia, adding that he will draw up a fiscal plan based on the growth strategy.
He also said he believes social welfare is an area of growth, defying a widespread view that it could place a heavy financial burden on future generations amid the graying of society.
Bankruptcies fell 15% in May, off for 10th month
Corporate bankruptcies fell in May for the 10th straight month, extending the longest streak of declines in five years as the economic recovery helped more firms stay afloat.
Business failures slid 15.1 percent from a year earlier to 1,021 cases, Tokyo Shoko Research Ltd. said Tuesday.
A resurgence in overseas demand helped the economy sustain its rebound in the first quarter. While government lending programs have been helping, the decline in bankruptcies is increasingly reflecting better business prospects for Japanese companies, economist Yoshimasa Maruyama said.
"The economy itself is improving," Maruyama, a senior economist at Itochu Corp., said before the report was released. "It's been a year since the rebound began. It's typical for the number of bankruptcies to fall by now."
Even so, three listed companies collapsed last month, according to Tokyo Shoko. Properst Co., the property developer that had pop star Madonna promote high-rise apartment sales in central Tokyo, filed for bankruptcy protection.
June 9th, 2010, 12:34 PM
White paper touts global water business
The Yomiuri Shimbun
A new government white paper calls on this nation's companies to more aggressively enter the global water market, which is expected to grow to about 100 trillion yen by 2025.
The 2010 white paper on the environment, recycling-oriented society and biodiversity, which was approved by the Cabinet Tuesday, was the first to include a chapter on the water business.
It also describes the competition among Japan, Germany and the United States regarding the number of patents registered for environment-related technologies.
The white paper cited a 2003 survey by the Asian Development Bank to explain why Japan has advantages in the water business. The survey showed, for example, that of all the water supplied by water management businesses in the city of Osaka, fees were uncollected on only 7 percent due to leakage and other reasons. This was lowest, and therefore the best, percentage among 18 major Asian cities.
The average percentage among the 18 cities stood at 34 percent, and the highest was 62 percent in Manila.
Given these conditions, the white paper suggests, demand for tap water will grow in developing nations, and markets related to leakage control and water purification technologies will expand.
This country's technology would give it a strong advantage, the paper says. However, it says that as a result of insufficient know-how in the private sector, Japan cannot yet respond quickly to recent developments in international competition.
This is because water management in Japan is left in the hands of local government. The paper calls for public-private cooperation to help the nation make inroads in the water market.
In a related development, the Tokyo metropolitan government is set to provide information on water management to a consortium led by Mitsubishi Corp., which has concluded an agreement to acquire an Australian water company.
The white paper also describes Japan's progress regarding patents in environment-related technologies.
According to a 2009 report by the Organization for Economic Cooperation and Development, the United States had the largest share of patents--19.6 percent--registered from 2004 through 2006 for renewable energy-related technologies such as solar or wind power generation. Japan was second at 18.7 percent and Germany third at 11.9 percent.
In patents related to waste management, Japan accounted for the largest share at 19.4 percent, followed by the United States at 17.8 percent and Germany at 8.3 percent. These three nations also topped the list for air pollution control and water quality management patents.
"Japan has been a top competitor in environment-related technologies, spurred by the adoption of Kyoto Protocol and other events," an Environment Ministry official said.
Biodiversity was included in the paper's title from last year, as the 10th Conference of the Parties to the Convention on Biological Diversity is scheduled to be held in Nagoya in October.
The paper says biodiversity has been seriously affected by such factors as deforestestation--about 7.3 million hectares annually--and a sixfold increase in fishery production over the five decades to 2000.
June 12th, 2010, 12:45 PM
Kan targets tax reform to repair economy
Stressing the need for tax reform to restore the country's battered finances, Prime Minister Naoto Kan vowed Friday in his first policy speech to the Diet that he will exert strong leadership to overcome Japan's economic struggles.
Specifically, Kan called on opposition parties to jointly launch a panel to discuss ways to restore the fiscal balance.
Kan did not specifically touch on the consumption tax, although he has indicated raising the unpopular levy will be inevitable to overcome the country's snowballing public debt and ballooning social security costs.
"As we can see in the confusion of the euro zone that was triggered by Greece, government finances could collapse if we leave the increasing public debt untouched and lose the trust of (the Japanese government bond) market," he said.
"We need national discussion on this issue, which will determine the future of our country, by overcoming the barrier between ruling and opposition parties," Kan said.
Kan, who took over from Yukio Hatoyama as prime minister on Tuesday after replacing him last week as Democratic Party of Japan president, criticized the lack of leadership by his predecessors, saying it ultimately resulted in the economy's downward spiral and stagnation.
"In order for the public to regain hope for the future, I will conduct a comprehensive reconstruction of Japan's economy, finances and social welfare," Kan told the Diet, which will likely end its session next week.
Kan, the finance minister in Hatoyama's administration, focused much of his speech on the deteriorating fiscal balance and his ideas for fixing it.
Japan "has a huge outstanding debt and it won't be cured in a short span of time," he acknowledged. But he assured that his approach to overcome the difficult task will be multidimensional, including creating jobs related to environmental protection and the aging society, as well as exporting Japan's technologies and experience to Asia's growing economies.
The government must rid itself of policies that depend on public works to stimulate the economy and also end its reliance on government bonds to make ends meet, he added.
He meanwhile pledged to continue some of Hatoyama's policies, including reviewing wasteful spending by the government and taking the policy initiative away from bureaucrats. "We are still only halfway there," Kan said.
On opening up the government to the public, Kan spoke of his experience in 1996 as health minister, when he revealed secret documents regarding HIV-tainted blood products that had been hidden by ministry officials.
Referring to the disclosure of documents earlier this year regarding secret nuclear pacts between Tokyo and Washington, he said his new administration will continue to do away with politics behind closed doors and truly allow the public to take part in the nation's democracy.
On foreign affairs, Kan said his team will work to establish stronger ties with both Washington and Asian neighbors, saying his Cabinet will formulate responsible diplomatic policies with the rest of the world.
"The U.S.-Japan alliance is the basis of diplomacy" for Japan, Kan said, explaining that the bilateral relationship not only provides security for the country but supports the peace and prosperity of the whole Asia-Pacific region.
Regarding U.S. Marine Corps Air Station Futenma in Okinawa, Kan said he will abide by the agreement reached last month to relocate its operations within the prefecture. But he added that measures to alleviate Okinawa's hardships will be thoroughly studied.
During the speech, Kan revealed he will visit Okinawa on June 23 and attend a ceremony to mark the 65th anniversary of the Battle of Okinawa.
Continuing Hatoyama's diplomatic proposals, Kan said he will seek to create an East Asian community, as suggested by his predecessor, and vowed to create a strategic partnership with China and fortify ties with South Korea.
But Kan also highlighted his differences from Hatoyama and recent Liberal Democratic Party chiefs who come from hereditary backgrounds.
A former social activist who began politics at the grassroots level, Kan said he gained interest in politics after watching his father struggle financially as a white-collar worker. His goal as a politician is to create a government that allows the wider public to truly get involved in politics and running the country, he said.
Osaka economist behind Kan's tax-jobs plan
Prime Minister Naoto Kan has said that fiscal consolidation is his most crucial task, championing a tax hike to rebuild state finances and possibly spur economic growth, but he had no such idea several months ago.
Behind the sudden shift in viewpoint is Yoshiyasu Ono, an economics professor at Osaka University. Ono has been advising the Cabinet Office on economic policy since late February, a month after Kan took over the finance minister's portfolio.
The expert in macroeconomics is a proponent of raising taxes and spending the money to boost jobs to help the economy complete its recovery from recession and grow further — which is what Kan has been advocating for the past several months.
In a recent interview, Ono said the government should increase taxes and use the revenue to create jobs in such high-potential sectors as nursing care, health care and environmental technology as the population grays, which would then help compensate for the drop in household income expected from the tax hike.
An improvement in labor conditions would help contain deflationary pressure, allay public concerns about unemployment, increase consumer spending and, consequently, tax revenues, which could then be used to reduce the state debt, he said.
Ono, 59, is regarded as one of Kan's mentors in economic and fiscal policy — an area not known to be Kan's forte. He also said the structural reforms carried out under former Prime Minister Junichiro Koizumi have been proven "wrong."
Koizumi's reforms were intended to boost corporate efficiency but ended up increasing unemployment, worsening deflation and reducing already sluggish demand instead, Ono said.
Ono, who is director of the university's Institute of Social and Economic Research, also proposed levying an environment tax and returning the funds to the public in the form of subsidies for purchasing energy-efficient products, a scheme similar to the Eco-point program.
He suggested the Eco-point scheme be extended to encourage companies to commit themselves more strongly to manufacturing energy-efficient items.
Before becoming finance minister, Kan, 63, was cautious about hiking the 5 percent sales tax because it might brake efforts to reduce administrative waste.
Recently, however, he has been leaning more toward fiscal responsibility and tax increases in light of the debt crisis in the euro zone, after attending Group of Seven meetings and other events.
To highlight his determination to rebuild the nation's finances, the prime minister devoted most of his opening remarks at his inaugural press conference Tuesday to economic and fiscal policy.
1+1=3? Not in Japan’s ‘Galapagos’ Phone Market
Japan’s mobile phones feature breathtakingly sophisticated technology, and the offerings from Toshiba Corp. and Fujitsu Ltd. are no exception. But simply combining their handset operations may not be enough to gain a global presence.
Toshiba and Fujitsu, industrial electronics conglomerates whose products range from air conditioners to semiconductors, are in talks to merge their mobile phone businesses, according to a person familiar with the matter.
The news was splashed on the front page of Japan’s Nikkei business daily, with the joint entity expected to be the second biggest player in the country’s saturated mobile phone market with a 19% share — trailing only Sharp Corp. But missing is the fact that the two comprise less than 1% of all the handsets sold worldwide — an indication that this deal would create another big fish in a small pond.
The proposed merger fails to address the fundamental issue affecting all of Japan’s handset makers: Why are Japanese cellphones so unpopular abroad?
One theory raised by analysts equates the devices to the unique animals discovered by Charles Darwin on the Galapagos Islands. The theory goes like this: Japanese cellphones, for all their technological wizardry, have evolved to suit local market needs and haven’t been adapted for people outside of Japan.
“In Japan, handset makers offer some unique features like ‘wallet cellphone,’ but that also falls under the ‘Galapagos’ category,” says Goldman Sachs analyst Ikuo Matsuhashi. “For Japanese makers, there are few advantages in this area.”
Japanese cellphone technology is nonetheless impressive. Functioning like a debit card, you can buy drinks by brushing your phone over a vending machine, pay for taxis with a swipe, and walk through a train gate with a simple beep, without ever buying a ticket.
Many Japanese amuse themselves on long commutes with 1seg, a mobile terrestrial digital audio and video data broadcasting service which lets you watch your favorite TV programs.
Without figuring out how to apply these technologies for global consumers, Japanese cellphones may remain the “Galapagos” of the mobile market.
Investors remained cool about the news. Toshiba’s shares rose 2.2%, while Fujitsu added 0.9%.
For Toshiba, the proposed merger is expected to ease the burden of its loss-making mobile phone operations. And conversely, it might end up being a drag on Fujitsu’s profitable phone business, which has a popular series of simple-to-use handsets for the elderly.
The companies will likely face fierce competition in hardware development with global players. Software like Google Inc.’s Android, an open-source operating system for mobile devices, makes it easier for less-established manufacturers to produce advanced phones.
Tour execs woo Ieyasu's China fans
The cities of Okazaki, Toyota and Anjo, in the Mikawa region of Aichi Prefecture, are known as the hometown of the Tokugawa clan, which ruled the country for nearly 300 years from 1603 and laid the foundations of modern Japan.
The cities are now launching joint tourism campaigns to take advantage of the growing popularity of the clan in China, where a translated novel portraying Tokugawa Ieyasu has become a best-seller, and attract more visitors.
Written by Sohachi Yamaokoa and published in China three years ago, 2.2 million copies of the novel have been sold in China.
Chinese fans of Ieyasu reportedly include senior government officials and business leaders. Last month state-run China Central Television visited Okazaki to do a program on Ieyasu, the shogunate founder.
Yoshihisa Shimodaira, lecturer on East Asian culture studies at Aichi Sangyo University, said the computer game boom has helped Chinese learn about samurai warlords in ways they were not taught in history classes at school.
"Among those warlords, Ieyasu in particular has won the sympathy of modern Chinese business leaders, since he controlled his ego quite well and led organizations to victory at the very last stage," Shimodaira said.
Japan plans to ease the restrictions on issuing visas for Chinese tourists starting next month to tap a nation experiencing rapid economic growth and a growing popularity for overseas travel.
Hoping to tap this potential, Okazaki Mayor Koichi Shibata called on the Aichi cities of Toyota and Anjo to work together. They held their first meeting at the Okazaki municipal office on May 20.
Tourism officials from each city gathered and agreed to formulate plans and publish travel brochures in Chinese, placing emphasis on the region as the roots of Ieyasu.
Okazaki officials are now trying to boost the appeal of Okazaki Castle, Ieyasu's birthplace, and the Tokugawa's Daijuji Temple. Toyota boasts as a tourist spot Matsudaira-go, site of the roots of the Tokugawa clan.
Anjo officials hope to lure people to relatively unfamiliar tourist sites such as Honshoji Temple, where a riot by Buddhist peasants against Ieyasu took place.
This section, which appears on Saturdays, features topics and issues from the Chubu region covered by local daily Chunichi Shimbun.
June 15th, 2010, 04:29 AM
FY 2010 growth forecast to be revised upward
The Cabinet Office is considering revising its economic growth forecast for fiscal 2010 to around 2.5 percent in real terms, up from 1.4 percent estimated at the end of 2009, according to sources.
The upward revision is being discussed amid emerging signs of a self-sustained recovery.
On Thursday, the office revised gross domestic product for the January-March period to show an annualized growth of 5 percent, up from 4.9 percent in the first preliminary report in May.
Growth in personal spending and housing investment was revised upward, while that for plant and equipment investment remained on the plus side for two quarters in a row.
The Cabinet Office is also considering upgrading its assessment of the current state of the economy to "recovering at a moderate rate" in its monthly economic report for June, the sources said.
If the word "recovery" is included, it will be the first time in 23 months since the report for July 2008 said the recovery appeared to be pausing.
The assessment has remained the same since March, when the report said the economy "has been picking up steadily."
June 16th, 2010, 10:13 AM
Japan's economy on moderate recovery track as overseas demand grows: BOJ
TOKYO, June 16 (PNA/Xinhua) -- The Bank of Japan (BOJ) on Wednesday said that the nation's economy is showing further signs of recovery on the back of a continued upturn in exports and production as overseas demand increases.
The central bank said in its monthly report on financial and economic developments that as economic circumstances continued to improve overseas, domestic production and export levels have increased commensurately to meet the demand.
According to the report production and exports in Japan will likely continue, however the pace of the increase may moderate gradually.
"The uptrend in exports and production is expected to continue, reflecting continued improvement in overseas economic conditions, although the pace of increase is likely to moderate gradually," the BOJ said maintaining its assessment that Japan's economy is likely to recover "at a moderate pace."
Japan's employment and income situation, the BOJ noted, remained "severe," but according to the report, "the degree of severity has eased somewhat."
The central bank expects public investment to continue to decline, but domestic demand to continue to improve but at a moderate pace due to firms' excessive capital stock and employment situations.
Improved corporate profits have been partially helped by the bank maintaining its super-low overnight call rate at 0.1 percent, although the bank said that the stimulative effects from low interest rates are still partly constrained.
Businesses view financial institutions' lending attitudes as harsh, the report said, however firms as a whole regard the situation as improving.
The BOJ announced Tuesday it intends to introduce a new funding initiative at the end of August aimed at encouraging banks to increase lending to industries with growth potential, such as the eco-tech, health and elderly care sectors.
The bank unveiled its plans to offer a total of 3 trillion yen (32.84 billion U.S. dollars) in loans to private banks to provide fiscal support for such economic growth areas, for a period of one year at a razor-thin interest rate of 0.1 percent a year.
As regards small businesses, many small firms still view their financial situations as weak, but the BOJ maintained that overall the actual financial positions of firms, including small ones, have continued to show signs of easing. http://www.pna.gov.ph/index.php?idn=3&sid=&nid=3&rid=281916
June 17th, 2010, 06:10 PM
June 18th, 2010, 01:55 PM
Households' financial assets post 1st rise in 3 yrs at end of FY 2009
The outstanding balance of Japanese households' financial assets as of the end of fiscal 2009 through March rose 3.1 percent from a year earlier, marking the first growth in three years amid a recovery in stock markets, a Bank of Japan quarterly survey showed Thursday.
The balance totaled 1,452.75 trillion yen.
The rate of increase was the highest since the end of fiscal 2005, when it reached 6.3 percent, according to the central bank.
On March 31 this year, the key Nikkei stock index rose around 37 percent from a year earlier to close at 11,089.94, showing a sign of recovery following the global financial crisis.
In addition to higher stock prices, consumers' tendency to cut back on spending amid uncertainty over the future of the economy also contributed to the increase in assets, BOJ officials said.
By type of financial asset, cash and deposits rose 1.5 percent to 798.20 trillion yen for the fourth straight yearly increase, while shares and other assets grew 23.8 percent to 102.52 trillion yen as the first upturn in three years.
Tourism revs up for China boom
Eased visa requirements figure to have ¥430 billion impact on economy in 2012
With the government easing the criteria for granting individual travel visas to Chinese next month, Japan is gearing up to lure more tourists from the Middle Kingdom and make international tourism a pillar that can prop up the anemic economy.
Until now travel visas have been given out only to wealthy Chinese, but starting next month the relaxed rules will allow another 16 million households — 10 times the size of the current pool of potential travelers — to apply for a trip to Japan, the Foreign Ministry said.
The government will reportedly lower the minium annual income level to 60,000 yuan (about ¥800,000) from 250,000 yuan (¥3.34 million), which is nearly 14 times the average income in China's urban areas. A Foreign Ministry official however declined to disclose the specific level, saying factors other than income will also be considered.
The Japan Tourism Agency aims to more than triple the number of Chinese tourists to 3.9 million in 2013 from 1.01 million last year.
"We will be actively working to increase inbound tourists with a focus on China," the agency's commissioner, Hiroshi Mizohata, said during a news conference May 27.
The visa deregulation figures to be a major boon to the tourism industry, considering that Chinese travelers on average spend more in Japan than any other nationality.
According to an estimate by an association of 17 Chinese and Japanese firms, including Japan Airlines Corp., relaxing the visa requirement will have an economic impact of about ¥430 billion in 2012.
China is already one of the Japanese tourism industry's top markets, sending more than 1.01 million visitors here last year. Only South Koreans and Taiwanese arrived in bigger numbers.
The vast majority of Chinese, however, travel to Japan in group tours, which require a different kind of visa. Only 15,620 individual visas were doled out between last July and March.
Under the current rules, only wealthy residents in areas overseen by the Japanese diplomatic offices in Beijing, Shanghai and Guangzhou are allowed to apply for individual tourist visas through 48 authorized travel agencies.
But as income levels in China rise, Tokyo has finally decided to target the entire mainland by expanding visa-granting approval to 290 travel agencies.
Some China watchers, however, are concerned the deregulation could lead to an influx of Chinese looking to work here illegally. That was one of the reasons Japan was reluctant to issue individual visas in the first place.
But Masashi Takahashi, principal deputy director of the foreign nationals affairs division of the consular affairs bureau at the Foreign Ministry, said the individual travel visa is less likely to be used for illicit purposes compared with other types, such as the work visa and family visit visa.
Takahashi also said the ministry will keep a careful eye on developments through cooperation with the National Police Agency and the Justice Ministry.
The government decided to loosen the visa restrictions in accordance with the recent strategic policy focus on expanding the international tourism industry.
The Visit Japan campaign was launched in 2003 by the then Liberal Democratic Party of Japan-led government, and the number of foreign arrivals per year has been on an uptrend.
The current Democratic Party of Japan-led government is taking an even more aggressive approach, increasing the Visit Japan budget by about three times to ¥8.6 billion and setting a more ambitious visitor target.
In October, tourism minister Seiji Maehara raised the bar to drawing 20 million foreign tourists a year by 2016 against the previous goal of 2020.
"We have been told by the minister, senior vice ministers and parliamentary secretaries to do thorough market research when they increased the tourism budget," Masahide Katsumata, director of inbound tourism promotion at the Tourism Agency, said during a recent interview with The Japan Times.
The keys to success will be market research, aggressive promotion in China and making tourist-related facilities more friendly to Chinese visitors, Katsumata said.
He pointed out that the needs of foreign travelers vary greatly depending on where they're from.
"People in southern (China) and those from the northern area have different images of Japan, and their needs also differ," he said.
For instance, people from Beijing, with its cold climate, might want to go to a hot springs or resort beach.
People from Shanghai, on the other hand, might be more interested in trendy fashion boutiques in urban areas, such as those in Tokyo, he said.
He also stressed the importance of going back to the basics and focusing on customer satisfaction. For example, efforts to make hotels friendlier by adding Chinese signs and TV channels are important, he said.
"Having even just one Chinese channel can make travelers feel comfortable, particularly if they come on a business trip," he said.
Another important point is to increase tour guides for Chinese, he said.
The Tourism Agency is now considering easing the criteria for licensed guides so more Chinese exchange students can find jobs in this field, he said.
The agency grants the official license for interpreter-guides for various languages, but while English-speakers are in good supply "there aren't many for Korean and Chinese, and the test is quite difficult," Katsumata said.
According to the agency, the number of registered Chinese interpreter-guides was 1,540 as of April 2009, compared with 9,274 for English.
With the increase in Chinese tourists, the number of guides hasn't caught up with demand, he said.
Despite all of the government's efforts, Japan may find it difficult to attract 1.8 million Chinese visitors this year.
The number stood at about 488,000 at the end of April, and reaching the annual goal will be tough, Katsumata acknowledged.
"We need to really put forth a lot of effort to achieve the goal," he said.
On the plus side, there is the relaxed visa criteria and the coming summer vacation, and the Shanghai World Expo could motivate Chinese to travel abroad in greater numbers, just as the Osaka Expo did for Japanese back in the 1970s.
Japan air carrier takes to the skies with Gundam
These days, it's more likely to be a Japanese anime hero swooshing across the skies than DC Comics' Superman. Taking to the air this time is Gundam, given a 30th anniversary salute by Japan's All Nippon Airways (ANA) with graphics of the giant meca splashed down the left side of a Boeing 777-300, and its huge head outlined on the right of the jet airliner.
Gundam figurine in ANA colors.
This comes via the ANA x Gundam Sky Project initiative, which will also retail special-edition Gundam plastic model kits in 1/144 (domestic flights from July 1 to August 31) and 1/48 scales (any flight from July 2 to February 28, 2011) at 3,000 yen ($33) and 8,500 yen ($93), respectively.
The Gundam Jet is slated to make runs between Tokyo and Osaka from July 16 of this year to mid-March 2011, with Fukuoka and Sapporo on the flight agenda soon after.
This isn't the first time the Japanese airline has carried out anime collaborations. Past efforts have included several versions of Pikachu from the Pokemon series. Hopefully, those making the effort to fly Gundam will get specially commissioned boarding tickets for the occasion.
June 21st, 2010, 05:37 PM
More firms say economy on mend
Nearly 60 percent of Japan's 100 leading companies surveyed by The Asahi Shimbun say that the economy is in the midst of a mild recovery. But despite a broad uptick in business sentiment, companies remain divided on whether to expand or reduce investments.
Every spring and autumn, The Asahi Shimbun interviews the top management of 50 manufacturing and 50 nonmanufacturing companies.
In the survey, conducted between May 28 and June 11, 58 companies say that the economy is "mildly recovering," up from 26 in the previous poll in November.
The respondents were asked to choose from six alternative assessments of current economic conditions: "expanding," "mildly recovering," "at a standstill overall, with improved outlook in some sectors," "at a standstill overall," "mildly worsening" or "deteriorating."
In total, 87 companies picked the first three assessments, up from 52.
Takayuki Hashimoto, president of IBM Japan Ltd., said, "Our client companies are relaxing efforts to cut costs and shifting toward growth-driven policies."
But the survey showed that the recovery is still largely dependent on a surge in exports or the government's economic stimulus measures.
"Personal consumption in areas not covered by the government's eco-point system is not strong yet," said Kaoru Seto, president of Yamato Holdings Co.
Hiroshi Yokokawa, executive vice president of Osaka Gas Co., said that unless personal consumption and equipment investment also improve, the economy will not make a full recovery.
The level of improvement in business sentiment appears to vary from industry to industry.
"In the real estate market, the rate of vacancies in office buildings remains high," said Yukio Yanase, president of Orix Corp. "Rents and land prices have not risen."
Forty-five companies said they will spend more on investments in plant and equipment in fiscal 2010 than in 2009, up from 18 in the previous survey.
In particular, investment in environmental technology and in Asia is growing.
The number of companies that said they were downsizing their investments also rose to 24, up from 18.
The survey found that 26 companies believe their work force is redundant, down from 44. But 12 companies said they will increase their work force in the current fiscal year, compared with 20 companies that are planning to reduce their payroll.
Fifty-two of respondents cited the future of the European economy as a major concern behind Japan's murky economic outlook.
There are not many Japanese companies that are heavily dependent on exports to Europe.
But if China, to which Europe is a major trade partner, is affected, it could have repercussions on the Japanese economy.
"If the Chinese economy slows down on shrinking demand from Europe, its impact on Japan could be big," said Seiichi Tanaka, executive vice president of Mitsui & Co.
As for the economic policies of Prime Minister Naoto Kan's new administration, Yoshimitsu Kobayashi, president of Mitsubishi Chemical Holdings Corp., said the government should explain who will shoulder what burden, not just announce policies that sound nice.
In today's economy, weaker yen may save Japan
The crisis of confidence in the euro caused the yen to strengthen against all other major currencies. In the flight to safety triggered by the latest financial market turmoil, investors around the world began buying up the yen.
Few factors are prompting investors to buy the Japanese currency other than heightened risk aversion due to the European sovereign debt crisis.
Historically, the yen entered the postwar era at the fixed-rate of 360 yen per dollar under a 1949 agreement between the Japanese government and the United States, which led the occupation of Japan by the Allied Powers.
Currently, the yen's exchange rate--a dollar is around 90-95 yen--means it has roughly quadrupled against the greenback in the past six decades.
The yen's climb against the dollar was inevitable, given Japan's spectacular economic growth following the end of World War II.
The Japanese economy, however, has now matured, while the population is aging rapidly amid a low fertility rate in serious demographic decline. The nation's workforce is beginning to shrink.
Clearly, the economic landscape in Japan has changed dramatically in the past 10 to 15 years. The change should trigger a major shift in currency valuation and cause the yen to start trending down.
The yen's long-term decline, if it happens, would be a powerful pick-me-up for Japan's slumbering economy.
A weaker yen would make exports more competitive against foreign rivals and thereby lift the profits of exporters. This would lead these companies to ramp up their capital spending, hire more workers and raise the salaries of their employees.
As a result, the government's tax revenue would increase, narrowing the budget gap. Yen-denominated dividends from investments overseas would also grow.
On the other hand, the prices of Japanese imports would rise. But this would also help the nation's economy by causing benign inflation that pushes up domestic interest rates modestly and slays deflation.
Overseas travel would be more expensive, giving Japanese consumers an incentive to spend more of their leisure money on trips within the country. At the same time, the number of foreign visitors to Japan would pick up, helping to stoke domestic demand.
In short, a weaker yen would do all good and no harm to the economy.
But the current confluence of factors doesn't favor such a scenario.
The financial crisis in the Western world is not over yet, while developing countries are hellbent on expanding their exports.
The question is whether the rest of the world is willing to allow the yen to slide.
I strongly hope that the new government of Prime Minister Naoto Kan will understand the benefits of a cheaper yen for the economy and take effective steps to guide the currency into a downward trajectory.
June 22nd, 2010, 03:18 PM
Japan nearly doubles economic growth forecast
Posted: 22 June 2010 1024 hrs
from ChannelNewsAsia (http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/1064816/1/.html)
TOKYO: Japan's government said Tuesday it had upgraded its economic growth forecast to around 2.6 per cent for the year to March 2011, from an earlier projection of 1.4 per cent.
That would see Japan achieve GDP growth of more than two percent for the first time since 2006, it said. For the fiscal year to March 2012, the government forecast 2.0 per cent growth.
"Thanks to the government's stimulus packages, strengthening in business profitability and improvements in employment and household income are spreading to an increase in private demand," the Cabinet Office said in a biannual report.
Separately, the government unveiled a long-term fiscal management policy which aims to achieve a primary balance surplus in fiscal 2020 in a bid to avoid a Greece-style debt crisis.
Achieving surplus in the primary balance -- the budgetary balance excluding payments for government debts -- is key in curbing gross government debt.
Prime Minister Naoto Kan pledged earlier this month a fiscal policy overhaul to reduce the country's massive public debt, which at around 200 percent of gross domestic product is the highest level of any industrialised nation. - AFP/jy
June 24th, 2010, 03:12 PM
Japan's exports rise in May for 6th straight month
TOKYO -- Japan's exports expanded for a sixth straight month in May as brisk global demand for cars and high-tech products helped shore up a recovery in the world's second-largest economy.
The finance ministry said Thursday that exports rose 32.1 percent from a year earlier to 5.3 trillion yen ($59 billion), marking the sixth month of year-on-year increase.
Growth in exports is vital to Japan's economy as exports alone account for 10 percent of the nation's gross domestic product.
"Overseas demand for Japanese goods remains steady in line with a recovery in the global economy," said Hideki Matsumura, an economist at Japan Research Institute.
"Strong global demand for Japanese cars and high-tech goods such as computers and flat-panel TVs shows the global economy has hit the bottom," he said.
Robust global demand, particularly in Asia, is supporting growth in Japanese exports and fueling an economic recovery. Japan recently upgraded its growth forecast to 2.6 percent in the current fiscal year thanks to an upturn in exports.
Among key regions, Japan's exports to Asia jumped 34.4 percent in May, marking the seventh consecutive month of year-on-year increase. Asia-bound shipments alone accounted for nearly 60 percent of Japan's total exports in the month.
Japan's auto exports to Asia expanded 56 percent while steel shipments to the region soared 78.8 percent in May.
Japan's exports to China also rose 25.3 percent, lifted by rising demand for cars and steel products.
Meanwhile, the country's exports to the United States grew 17.7 percent on recovering demand for cars. U.S.-bound auto exports rose 23.4 percent in May, with auto parts shipments to the United States up 40 percent.
Japanese exports to the European Union rose 17.4 percent last month.
Imports in May grew 33.4 percent to 5.0 trillion yen, resulting in a trade surplus of 324 billion yen.
June 24th, 2010, 03:41 PM
TSE's Long-Awaited System Revamp Promises Speed Burst
24 December 2009
TOKYO (Nikkei)--The Tokyo Stock Exchange's first system upgrade in a decade will accelerate order processing by a factor of 400-600, bringing the bourse into the age of high-speed trading.
The TSE aims to compete with its U.S. and European rivals by attracting foreign securities firms equipped with lightning-fast trading technology.
Development of the TSE's new system, Arrowhead, which is scheduled to launch Jan. 4, began in 2006 and has cost about 13 billion yen. The system is supposed to shrink processing time from 2-3 seconds to 5 milliseconds. The TSE will finally catch up to the New York Stock Exchange and the London Stock Exchange, which boast speeds of 5 and 4 milliseconds, respectively. By comparison, a human blink lasts 100-400 milliseconds.
In conjunction with the start of Arrowhead, the TSE will raise the daily trading limit for stocks priced 3,000 yen to 5,000 yen a share to 700 yen from 500 yen currently. Other restrictions on price movements will also be eased.
At the same time, however, the TSE will introduce a new rule halting trading in a stock for 1 minute in the event of an excessive swing. The minimum tick on stocks priced 3,000 yen to 5,000 yen a share will be reduced from 10 yen to 5 yen to allow for more nuanced trading.
In U.S. and European stock markets, speed-trading institutional investors account for 60-70% of turnover. These are the very players that the TSE aims to lure with its system upgrade.
The acceleration of trading will be a mixed blessing for domestic investors. Transparency will increase. Ultrafast processing speeds will deter the tactic of manipulating prices by issuing huge orders with no intention of carrying them through.
On the other hand, some warn that day traders watching their screens for minute price changes will essentially be shut out of the faster market. Thinly traded stocks could become more volatile as a result of looser restrictions on price movements.
Nevertheless, an increase in trading volume will improve liquidity and lead to more stable prices. With the TSE looking likely to lose its position as the world's third-most-active stock exchange to the Shanghai market, expectations for the system upgrade are running high.
June 26th, 2010, 03:44 AM
Japan's consumer prices fall for 15th month in May
TOKYO – Japan says the country's consumer prices fell for the 15th straight month in May as deflation kept its grip on the world's second biggest economy.
The core consumer price index, which excludes fresh food, fell 1.2 percent from a year earlier.
The result compares Kyodo news agency's average market forecast for a 1.3 percent decline.
Uniqlo Uniquely positioned
BASICS—everyday items such as T-shirts, socks and jeans, in the jargon of the garment industry—are not normally considered the most exciting part of the business. But they are found in almost every wardrobe. Uniqlo, a successful Japanese firm with big ambitions, has transformed them into a goldmine. Having conquered Japan, it is now taking on the world.
Uniqlo’s parent company, Fast Retailing, is Japan’s biggest clothing company, with sales of $9 billion forecast this year. Whereas many Japanese businesses are ailing because of the stagnant domestic economy, Fast Retailing is flourishing. Last year sales grew by 17%, despite the recession, or because of it: its clothes combine a touch of style with enticingly low prices.
The company is hailed as an example of a new, globally competitive Japan. Its founder and boss, Tadashi Yanai, emerged from humble origins to become Japan’s richest man, worth over $9 billion. Uniqlo ranks among Japan’s ten most valuable brands, according to Interbrand, a consultancy. Its low prices are even blamed for fuelling Japan’s deflation.
Now Uniqlo, whose name is a contraction of “unique clothing”, is on the move. In recent months it has opened huge flagship stores in Paris, Moscow and Shanghai, which have been met with throngs of customers. Mr Yanai wants $50 billion in sales and $10 billion in profit by 2020. Although only 10% of Fast Retailing’s sales come from abroad, Mr Yanai expects overseas revenue to surpass domestic sales by 2015. And although it boasts around 800 stores in Japan and 140 overseas, it plans to open a staggering 500 new stores annually over the next three to five years. Most will be in Asia, notably China, where it already has 54 shops but wants to have 1,000.
Fast Retailing prefers to grow independently, but is also open to expansion by acquisition to enhance the firm’s presence in America or Europe. A future bride, says Mr Yanai, could retain its own identity while selling some of Uniqlo’s clothes, and could cost as much as $10 billion. But finding the right firm is difficult, he says. In recent years, Fast Retailing has successfully acquired smaller foreign brands including France’s Comptoir des Cotonniers for women’s wear and Princesse Tam-Tam lingerie, as well as America’s Theory.
Fast Retailing is still smaller than its global peers. Its revenue is around two-thirds that of America’s Gap, Sweden’s Hennes & Mauritz (H&M) and Spain’s Inditex, which runs the Zara chain (see chart). But Fast Retailing is catching up fast, and has a record of startlingly rapid growth. When Mr Yanai declared in 2006 that its sales would rise from $3.5 billion to $10 billion this year, analysts derided him, but the firm is very close to the target.
.Fast Retailing also has a distinctive business model. Zara and H&M bring the latest fashions to the masses quickly, ordering new lines many times a year. Fast Retailing, by contrast, sells only around 1,000 items, far fewer than its rivals, and keeps them on the shelves longer. “We don’t want to chase after ‘fast-fashion’ trends,” explains Mr Yanai. This lets Fast Retailing strike lower-priced, higher-volume deals with suppliers (most products cost $10-20) and makes managing inventory a much simpler and cheaper affair.
Uniqlo makes up for the narrowness of its offering by selling the same item in many colours: socks come in 50 hues at its flagship store in Tokyo. Such basics, the firm believes, have the added benefit of appealing to a wider audience than the preppy Americana sold by Gap or the faddish wares of Inditex and H&M.
Although it opened its first store in 1984, Uniqlo really got going in the early 1990s, just as Japan was entering a long period of economic anaemia. Mr Yanai bypassed middlemen by purchasing directly from suppliers. And he challenged the view that Japanese consumers would reject Chinese-made clothes (90% of its apparel is made in China).
But the factors behind Uniqlo’s domestic success are of little avail as it expands abroad. The belt-tightening environment in which it flourished does not pertain in many of the emerging markets it is targeting, although it certainly does in most of the rich world. Uniqlo relies mainly on small suburban shops in Japan but is opening giant stores in posh central locations overseas. (Experiments with suburban shops in Britain and America have gone badly.) Moreover, Uniqlo succeeded in basics but is now expanding into trendier lines, for example through a tie-up with Jil Sander, a German fashion designer. It will have to manage a multicultural, multilingual workforce—an area where Japanese firms often trip up. And merchandise will need to be tailored to national tastes, so scale will be harder to achieve. “One’s strength can be one’s weakness: basics can be boring,” Mr Yanai admits.
Mr Yanai himself may also create problems. A brilliant strategist with uncanny fashion instincts, he is also unable to delegate, say Fast Retailing executives. He controls all decisions, down to approving samples and colours. Mr Yanai defends his meddling. “A good business manager”, he says, must “pay attention to the details.”
This micromanaging has pushed talented executives to quit the firm, leaving no obvious successor to Mr Yanai, who plans to step down as boss (but remain chairman) in four years, at 65. Previous attempts to cede day-to-day control have been aborted.
When pressed, Mr Yanai says that he has decided not to hand the company over to his sons. They will be big shareholders with board seats, but will not take operational roles. In this, he once again defies traditional Japanese business practices. Firms that rely on primogeniture, he notes, perform poorly. So, in the long run, do those that rely on a domineering leader.
Toshiba to make more motors for Ford hybrids
Toshiba Corp. will spend about 4 billion yen ($44.2 million) on new production lines at its plant in the U.S. state of Texas to increase output of electric motors for Ford Motor Co.'s hybrid vehicles.
The company said Wednesday it will supply 130,000 to 150,000 motors a year for Ford's new gas-electric model, production of which will begin in 2012. It will install new assembly lines at its Houston plant by January 2012.
Toshiba plans to raise its total production capacity to 200,00-300,000 units a year to supply other automakers as well. It has been supplying motors assembled at its Mie Prefecture plant to Ford. The supply volume will more than double from 2012.
Toshiba aims to increase sales of automotive parts and components to about 700 billion yen in fiscal 2015, up from about 180 billion yen in fiscal 2009.
June 28th, 2010, 03:02 AM
Japan's Prime Minister Naoto Kan (L) and his wife Nobuko Kan arrive for a working dinner at the G20 Summit in Toronto.
Japan's Prime Minister Naoto Kan and his wife Nobuko wave to each other as they part ways upon arriving in Toronto to participate in the G8 and G20 Summits.
Japan’s first lady more than an accessory
Nobuko Kan, left, wife of Japan's Prime Minister Naoto Kan, with Prime Minister Stephen Harper and his wife Laureen.
Nobuko Kan takes an active political role but says she’s very different from Hillary Clinton, despite frequent comparisons.
Toronto — From Monday's Globe and Mail Published on Sunday, Jun. 27, 2010 5:20PM EDT Last updated on Sunday, Jun. 27, 2010 7:08PM EDT
When Nobuko Kan made her diplomatic debut at the G8 and G20 summits this weekend, she was geared up to debate the other leaders’ spouses.
Unfortunately for her, conversation rarely strayed outside the safety zone of “nature, animals, hobbies, holidays, a little bit of talk about cooking and what they eat during the Christmas time.”
“I was ... hoping they might be more interested in talking about politics,” Ms. Kan, the wife of the new Japanese Prime Minister Naoto Kan, says through an interpreter in an exclusive Canadian interview with The Globe and Mail. “But that wasn’t the impression that I had this time.”
Don’t let her docile appearance and traditional dress fool you. She’s much more than an accessory to her husband when he travels.
Her auburn-dyed hair parted to the left and pulled back loosely on Saturday, the petite Ms. Kan abandoned the pantsuits and sweater sets she wears in Japan. At an elaborate tea ceremony at the Japan Foundation in Toronto, Ms. Kan (a tea master herself), wore a sky-blue kimono with a flower-printed obi sash. She traded in designer pumps for white tabi socks and silver platform sandals.
She respects ancient cultural traditions, but she’s also a shrewd thinker and talker. She may only be 2.5 weeks into the job as Japan’s Prime Minister’s wife (she has yet to move into the official residence) but the 63-year-old has decades of experience as a political spouse under her belt.
She met her husband when the two were student activists. Mr. Kan was elected to the House of Representatives in 1980 and was later appointed to cabinet, first as health minister and then finance minister.
In early June, Prime Minister Yukio Hatoyama resigned and two days later, there was an election for a new leader of the Democratic Party.
“I found out from a phone call from my husband that he decided to run for the election,” Ms. Kan says with a chuckle.
Japanese media credited her as an unofficial adviser to her husband in 1996 when, as Health Minister, Mr. Kan exposed his own government’s involvement in the tainted blood scandal of the 1980s.
The way Ms. Kan discusses and challenges her husband on his party’s policies has earned her comparisons to a famous former first lady.
“ I am the opposition party within my family, so we spend a lot of time discussing politics at home and that’s probably the reason people equate me as ‘Hillary of Japan,’ but I’m very different from Ms. Clinton. ”— Nobuko Kan
Ms. Kan, for all her fascination with domestic and global politics (they dominate 80 to 90 per cent of family discussions, she says), has never had a desire to run for office herself. But like Ms. Clinton, who as first lady took on health-care reform, Ms. Kan has her own agenda items: She wants to eliminate sales taxes on produce and medication.
She reveals what she sees as her true calling – motherhood, not politics – when she openly discusses the other issue dear to her heart: treatment for hikikomori.
The condition, which means “acute social withdrawal,” has hit many teenagers and young men in Japan who lock themselves in their homes and listen to music, surf the Internet or play video games, refusing to go outside and interact with others.
“That’s a very close subject to my own family,” she says candidly as the easy grin on her face fades.
Shortly before her sons were to write the entrance exams for high school, they developed hikikomori and stopped attending classes.
“I asked the school people: please don’t call us every day and ask, ‘Why is your son not coming?’”
Her younger son did leave the house, but only to transplant himself to Mahjong parlours all weekend long.
Ms. Kan felt helpless and tried to wait out what she calls the greatest challenge of her family life. After long family discussions led by her husband, her sons finally recovered.
“Both of them eventually broke out of that situation and became responsible members of society, but there’s no clear, easy solution,” Ms. Kan says.
She’s added to her husband’s already lengthy list of policy items to tackle during his term in office, though she is concerned that in the past four years, Japan has seen as many prime ministers.
“I'm not thinking of myself as an adviser. I'm one of the voters and a very high-demanding voter,” she says. “Hopefully they’ll have an opportunity to carry out those changes that they were voted for.”
June 29th, 2010, 04:22 PM
Japan's jobless rate edges up in May, worsening 3rd straight month
Japan's jobless rate in May inched up to 5.2 percent, worsening for the third straight month, reflecting companies' cautious stance about adding payrolls due to uncertain economic prospects amid Europe's sovereign debt woes, government data showed Tuesday.
But preliminary readings by the Internal Affairs and Communications Ministry also indicated that the number of job cuts stemming from corporate restructuring and business failures has dropped in the past two months.
Job availability also improved in May, as the ratio of job offers to job seekers climbed to 0.50 from 0.48 in April, according to a separate report released the same day by the Health, Labor and Welfare Ministry.
The result from the labor ministry indicates that 50 jobs were available for every 100 job seekers in May.
But an official at the internal affairs ministry said, "The figures still hover at high levels and we need to remain on guard."
Echoing the view, Health, Labor and Welfare Minister Akira Nagatsuma also told a press conference, "We will take all possible means (to prevent a further worsening)."
Prime Minister Naoto Kan, who places priority on fiscal consolidation and economic growth, will be tested on his ability to improve the nation's labor conditions, which have been sluggish amid a global financial crisis since the fallout from Lehman Brothers Holdings Inc.'s collapse in late 2008.
"The steep economic recovery, which was recently observed, has already come to an end," Hideki Matsumura, a senior economist at the Japan Research Institute said, noting that the rate of decline in the number of job holders has not slowed down so steadily.
Japan's jobless rate hit an all-time high of 5.6 percent in July last year. It fell below 5.0 percent in January for the first time in 10 months, before rising back above the line in March.
The seasonally adjusted unemployment rate for May was up 0.1 percentage point from the previous month's 5.1 percent.
The official at the internal affairs ministry said that the monthly difference before rounding was even smaller, as the figure came in at 5.17 in May compared with 5.14 in April.
The unemployment rate among people aged 15 to 24 was particularly high, suggesting that they began looking for jobs amid signs of an economic pickup and were entering the labor market.
But Matsumura said the increase instead simply reflects the worsening of labor conditions, as people in the age group are often vulnerable.
The number of jobless people stood at 3.47 million, unchanged from a year earlier, while the ranks of job holders sank by 470,000 to 62.95 million, the 28th consecutive monthly decline.
Both the manufacturing and construction sectors continued to be sluggish, as manufacturing payrolls fell by 220,000, while the construction sector shed 160,000 jobs.
But the medical and social welfare services sectors remained steady, as the number of payrolls was up 390,000.
The jobless rates for men and women were unchanged at 5.5 percent and 4.7 percent respectively.
Roughly 1.03 million people lost their jobs in the reporting month because of their employers' decisions, down 70,000 from a year before.
June 29th, 2010, 04:24 PM
Chinese tourists flock to Japan, lift weak economy
TOKYO — Snapping up four Japanese luxury Seiko watches as if they were cheap chocolate souvenirs, a 36-year-old Chinese tourist plunks down $4,500 in cash at a glitzy store in downtown Tokyo.
"One is for me, and the other is for my father. The rest are for my friends," says Li Jun, a computer businessman from Shanghai.
No Buddhist temples or tranquil rock gardens for him. Li and his wife are in Japan on a single-minded mission: shopping.
"We want to buy Japanese products because they are known for very good quality," Li says. "We are here for shopping, not for tourist activities."
For years, Japanese auto and electronics companies have been expanding in China as its economy boomed to offset slow growth at home.
But now, Japan's languishing economy is getting a lift from hundreds of thousands of Chinese tourists who are eager to flaunt their newfound wealth by purchasing brand name goods, from Canon digital cameras to Shiseido cosmetics.
Last year, a record 481,696 Chinese tourists visited Japan, up nearly 20 percent from 2007, according to the Japan National Tourism Organization. While it's difficult to measure the precise impact of Chinese tourist spending, it is warmly welcomed by Japan's struggling retailers.
"Chinese are the saviors for us. I've never seen any foreign tourists spend as much as Chinese," says Takeshi Araki, a salesman at electronics retailer Yodobashi Camera Co. Ltd. in Tokyo's bustling Akihabara electronics district, where thousands of neon signs blink and stores blast songs from outdoor speakers.
As Japan's population ages and declines, the world's No. 2 economy will become increasingly dependent on such consumer spending from those who live outside the country — and Tokyo knows it.
Japan will ease tourist visa restrictions on July 1 for mainland Chinese citizens, hoping to draw more visitors — and their big wallets.
"The Chinese economy is booming, and China's demand for overseas travel, especially among wealthy people, is about to explode," says Kouichi Ueno, chief official of the international tourism promotion division at the government-run Japan Tourism Agency.
Thanks to years of rapid growth, China now has the world's fourth largest population of millionaires after the United States, Japan and Germany, according to a Merrill Lynch Wealth Management/Capgemini survey.
To cash in on China's rising wealth, Tokyo will start to issue tourist visas to Chinese who hold gold cards — credit cards granted to those above a certain income level with good credit histories — or who earn more than 60,000 yuan ($8,800) annually.
That's down sharply from a previous income requirement of 250,000 yuan ($37,000) per year, a threshold that apparently was imposed to keep low-income earners from staying on and becoming illegal aliens.
The revised income requirement is still well above the average income for a Chinese city dweller — 19,000 yuan ($2,800) last year.
For Chinese tourists, shopping is the most popular activity while in Japan. Zhang Qin, a 31-year-old tourist from Beijing, says the No. 1 appeal of Japanese products is their perceived superior quality.
She bought four Japanese digital cameras worth 560,000 yen ($6,300) at Yodobashi Camera. While similar products can be purchased in China, Zhang says she is wary of fakes.
She says she hasn't visited any tourist attractions during her five-day trip to Tokyo. "I am too busy with shopping," Zhang says.
Tokyo's upscale Ginza shopping district is getting a boost from the influx of Chinese shoppers, too.
"Chinese people don't go window-shopping in Ginza. They are in Ginza to buy, and they go for brand-name products like Burberry and Japanese cosmetic maker Shiseido," says Masatoshi Nitta, manager at the sales division at the Ginza branch of Mitsukoshi department store, one of Japan's most respected brands.
"Chinese are not shy about showing off their wealth. For them, buying high-end merchandise in Ginza itself is seen as a prestigious thing," he says.
To encourage Chinese shoppers, Mitsukoshi became the first Japanese department store to accept the popular Chinese debit card known as China Union Pay.
The card is also used to withdraw money from Japanese ATMs. The value of transactions by the Chinese debit card in Japan soared to 20 billion yen in 2009 from 2.7 billion yen in 2007, according to a Mitsui Sumitomo Card survey.
A group of Japanese companies promoting Chinese travel here estimates spending by Chinese tourists will jump nearly fourfold to 430 billion yen by 2012 from 120 billion yen in 2008.
Eyeing soaring growth from China, Ueno from the Japan Tourism Agency says the government should create further incentives to encourage Chinese travelers to return repeatedly to Japan.
"We want Chinese tourists to be curious about Japan. We want them to go beyond Tokyo and spend money. This is just a beginning," he says.
October 4th, 2010, 04:12 PM
FACTBOX-Asian exchanges rush to upgrade trading systems
17 August 2010
Aug 17 (Reuters) - Asia's biggest stock exchanges have invested heavily in new systems to attract high-frequency traders and fend off expected competition from alternative trading platforms such as dark pools.
Dark pools, which have become increasingly popular in the West, allow brokers and fund managers to place and match large "buy" and "sell" orders anonymously so as to not influence the share price.
The operators of these systems are keen to expand in Asia, having gained large market shares in Europe and North America.
Following are steps taken by the region's largest bourse operators: Tokyo Stock Exchange (TSE)
- TSE launched its new $140 million Arrowhead stock trading system in January this year, allowing it to execute trades in 5 milliseconds (5/1,000th of a second), compared with up to 3 seconds in the case of the previous system.
The new system, built by Fujitsu, will also reduce the time taken to distribute stock price and quote information to 3 milliseconds.
Arrowhead puts the Tokyo bourse in the same league as the New York and London stock exchanges, which attract a large number of high-frequency traders who use complex algorithms to analyse market data and place orders.
In step with the launch of Arrowhead, TSE has cut tick sizes -- the smallest increment by which a stock can move -- and widened daily price limits to allow stocks to rise or fall by a larger amount in one day.
November 25th, 2010, 03:46 PM
Tokyo's Stock Exchange to Shorten Lunch Break, Following Rival Hong Kong
By Anna Kitanaka and Kana Nishizawa - Nov 25, 2010 12:35 PM GMT+0800
The Tokyo Stock Exchange plans to shorten its lunch break to one hour, joining Hong Kong in extending the trading day as Asian bourses intensify competition for revenue.
Starting next year, the break will run from 11:30 a.m. to 12:30 p.m. local time for spot trading, down from 90 minutes now, Atsushi Saito, president of the bourse, told reporters in Tokyo yesterday. That will lengthen the trading day to five hours, still less than Sydney, Singapore and Seoul.
Hong Kong said this week it’s expanding trading hours to align more with China, which briefly overtook Japan this year as the world’s second-largest stock market, behind the U.S. The average number of shares traded daily in Hong Kong has surged 477 percent from 2005 through October this year, exchange data show. In Tokyo volumes have fallen 6.6 percent in the same period, according to data compiled by Bloomberg.
“Considering trading hours in Asia, and the practicality of this, we decided to shorten the break to increase trading opportunities,” Saito said. “We calculate that this will increase trading by around 6 percent.”
The bourse began surveying investors and brokers in July, and received 128 responses, according to a statement from the exchange. Seventy percent of respondents were against total abolition of the break, the statement said.
“I doubt that volume will increase much as a result of this,” said Mattia Ciancaleoni, director of equity sales at Citigroup Global Markets Japan Inc., a unit of Citigroup Inc. “In some ways it’s like believing you have a bigger pizza just because you have cut more slices.”
In order to increase trading activity, the bourse considered extending trading hours by changing the opening and closing sessions for the whole day, or establishing a night- trading session, according to a statement. This was deemed “currently difficult,” the exchange said.
“Instead of longer opening hours, they need to raise the attractiveness of the market first,” said Yoji Takeda, head of the Asian equity-management team at RBC Investment (Asia) Ltd., which oversees $1.1 billion in Hong Kong. He didn’t do the Tokyo survey. “It probably won’t have much of an effect on the market.”
Tokyo’s market is currently open from 9 a.m. to 11 a.m. and 12:30 p.m. to 3 p.m. Saito said today he expects the longer hours will take effect in the first half of next year, once brokerages are ready.
‘Improve Corporate Governance’
“This will have a relatively modest impact,” said Citigroup’s Ciancaleoni. “What will lead to higher volume on the Tokyo Stock Exchange is not so much reducing the lunch break, but other issues such as better corporate governance or a recovery in the earnings and momentum of Japanese companies.”
London, Paris and Frankfurt are open for more than 8 hours daily, while New York trades for 6 1/2. Singapore is proposing to move to 8 hours from 6 1/2 by abolishing its lunch break.
Hong Kong Exchanges & Clearing Ltd. will cut its traditional two-hour lunch break, the longest among developed markets, to 90 minutes from March 7, and to one hour in March 2012. The stock market will open at 9:30 a.m., instead of 10 a.m., with a break at 12:30 p.m., and the close at 4 p.m.
“Getting rid of lunch breaks is not very practical,” Ng Soo Nam, Singapore-based chief investment officer at Nikko Asset Management Co., which has $123 billion in assets globally. “People do need to go for lunch breaks -- not just the traders, but fund managers like myself.”
‘Not Very Practical’
Even with the break shorter, Japan and Hong Kong will be among a minority of developed-market exchanges that stop for food. The main bourses in the U.S., U.K., Australia and Germany -- where the trading day is 11 hours -- operate without a break.
“The TSE is losing ground in the global market,” said Takeshi Osawa, a senior fund manager in Tokyo at Norinchukin Zenkyoren Asset Management Co., which oversees about $22 billion. “But that’s not something the TSE can change on its own. Unless the government and companies help make Japanese stocks more attractive, tweaking the exchange’s system won’t make much of a difference.”
November 27th, 2010, 10:41 AM
Upgrading the Tokyo Stock Exchange ?
i think it is not yet. The rise is rapider if starting.
Japan needs more time and price's adjustment ( though it already took adjustment of babble for 20 years..)
it is long adjustment of (4' a-b-c) wave ( I think impulse wave(3) ended 1n 1989)
However, Japan's era(5) will start again after that..:)
Most exporting companies converted the surplus to this appreciation of the yen because of raw material down
or Kondratiev wave will be finished..
The war is always wonderful chance for Japan.
February 27th, 2011, 05:24 AM
TSE to set up new unit to promote itself - The Nikkei
Feb 25 (Reuters) - The Tokyo Stock Exchange Inc (TSE) will set up a new unit in April to attract investors and companies -- foreign and domestic -- to the Japanese stock market, the Nikkei business daily said.
The exchange is looking to make a stronger play for investors in Hong Kong, Singapore and other foreign financial centers, the paper reported.
In its first major reorganization since it changed to a holding company format in 2007, the TSE will create a marketing division along with its operations and information technology divisions, the daily said.
The new unit will incorporate some existing sections, including those responsible for attracting foreign high-frequency traders and promoting new listings, Nikkei reported.
The change comes against the backdrop of the Tokyo market's decline vis-a-vis the rise of China and other Asian economies, the daily said.
Foreign investors, the source of more than 60 percent of the TSE's trading commissions, are branching out into new and diverse ways of trading and keeping them from taking their money elsewhere has become a challenge, it added. The TSE will also expand its IPO staff, go local in Japan and canvass Asia more aggressively to search for up-and-coming firms, the paper reported.
March 2nd, 2011, 02:16 PM
TSE, NYSE Euronext In Network Linkup Talks
2 March 2011
TOKYO (Nikkei)--The Tokyo Stock Exchange and NYSE Euronext Inc. said Wednesday they have agreed to start talks on linking their trading networks.
The rapidly shrinking presence of Japan's stock markets has the nation's largest exchange looking to make itself more accessible to overseas investors.
Increased cross-border trading activity is prompting bourses around the world to merge and partner with each other. A merger is not likely for the TSE because it is not a publicly listed company, so the exchange is looking to expand its overseas ties by linking trading systems.
A linkup with NYSE Euronext would enable investors in other countries to access the TSE's network to inexpensively obtain Japanese stock price data.
The Tokyo exchange is apparently thinking about eventually allowing U.S. brokerages to trade Japanese shares without opening local offices, which would help invigorate the Japanese stock market.