Week of February 15, 2016
- Sex, Graft, Racism and Radiation, was a heading by Bloomberg News and it provided a simple overview of recent blunders by the Abe government. Kazuya Maruyama, a US trained lawyer and now member of the House of Councillors, told a parliamentary committee last week last week that "When the country (USA-rm) was being established, no one imagined that a black person, a slave, would become president of the U.S.” He apologised. Environment Minister Tamayo Murakawa questioned last week the basis of the government’s long-term goal for reducing additional radiation levels near the Fukushima No. 1 nuclear plant to an annual dose of 1 millisievert or less. Some areas near the Fukushima plant exceed an annual dose of 20 millisieverts, according to the latest data compiled by her own Environment Ministry. And on February 9 the communications minister, Sanae Takaichi, threatened to take action against television stations that flout rules on political impartiality. Ms. Takaichi was responding to a question about the departure of three anchors at Asahi TV, TBS and national broadcaster NHK (Bloomberg).
- The Economist claims that the independency of media in Japan is under threat as they are being pressed by the government to express “unbiased views”. In Japan, according to this publication, "political pressure on the press is not new. The mainstream media (the five main newspapers are affiliated with the principal private television stations) are rarely analytical or adversarial, being temperamentally and commercially inclined to reflect the establishment view.” But the departure of three major anchors is a sign that the government is looking for stricter control.
- China's deployment of surface-to-air missiles on Woody island in the South China Sea made headlines last week, not only in Japan. Woody island is controlled by China, but claimed by Taiwan and Vietnam. The Council on Foreign Relations provides you with an overview of the contested spots in the South China Sea and the Sea of Japan. See http://www.cfr.org/global/global-conflict-tracker/p32137#!/conflict/territorial-disputes-in-the-south-china-sea or look to the PDF attached.
- Japan’s economy contracted 0.4% in Q4 2015 and on an annualised basis 1.4% during that period. Inflation is nowhere to be seen, but the core of Abenomics, says the BBC, is not reflation; it is weakening the Japanese yen. Why? "Because Mr. Abe and his advisors know that the only easy way to get Japan growing again is to increase exports - the most important engine of growth for Japan." But that same yen is moving into the opposite direction, with now apr. JPY 125 for the Euro (140 in June 2015).
- Japanese exports and imports fell in January at their fastest pace since 2009, and will do little to assuage the growing chorus of voices asking if this is the end of Abenomics, states the Financial Times. Japanese exports plunged 12.9% year-on- year in January, from an 8% drop in December and worse than the 10.9% slide expected by economists.This is the biggest decline since October 2009, when exports slumped 23.2%. And it’s a similar story for imports, too. Shipments into Japan fell by 18% year-on- year in the first month of 2016, flat on December’s decline, but also worse than the 15.8% slide economists forecast.
- I love economic indicators, and here an overview of all kind of indicators on Japan. GDP from agriculture or from manufacturing? External debt? You’ll find it here. Youth unemployment, retirement age, minimum wage, foreign reserves, tourist arrival, gold reserves, car production, corruption index? It’s all there. Forget the ad on top.
- Bloomberg had an article on Japan’s hidden dragons, i.e. the sogo sosha or “general trading houses”. Measured by the gross value of its mining and energy assets, Japan's Mitsubishi Corp. is the fourth biggest mining company in the world and outstrips Rio Tinto and Anglo American. Perhaps more important: the five biggest Japanese sogo sosha perform beter than their bigger mining peers when it comes to default risks. Japanese corporates are sitting on about USD 3 trillion of cash earning a negative rate of return now, and would be much better off deploying it in takeovers or investments (Bloomberg).
- The once famous company Sharp is in trouble and the question is now: will it be taken over by Taiwanese Foxconn or by a Japanese state fund, the Innovation Network Corporation of Japan / INCJ, that offers investors a lower price. However, this INCJ would like to combine Sharp with Japan Display that is already part of its portfolio (Reuters).
- Dentsu, Japan’s largest advertising agency, is on a buying spree in the USA and Europe and plans 60 M&A deals for the coming years. It recently bought Dutch digital advertising company Achtung BV.
- Airbnb, a big success in Japan so far, is facing a major set-back. Under pressure from the hotel industry and a populace concerned with the surge of foreigners in their neighbourhoods Prime Minister Shinzo Abe’s government has released guidelines for home sharing - called minpaku in Japanese - that could make most Airbnb rentals in the country illegal. Airbnb hosts would only be allowed to rent to guests who stay for a week or longer, a minuscule slice of the market. Airbnb was expected to be a major beneficiary of the Tokyo Olympics in 2020 and let’s face it: there is simply too little hotel space in Tokyo (Bloomberg).
- A Japanese company giving its blessing to same-sex marriages: I wouldn’t have expected this from an “old” company like Panasonic, but it happened this week. Panasonic is considering a range of benefits for same-sex couples including wedding leave, although the details have not yet been decided. The changes, if implemented, are set to come into effect in April. The review was prompted by requests from Panasonic's employees, global trends, and its status as a sponsor of the Tokyo 2020 Olympics.
- A long read on the Tokyo Olympics: are they in trouble? asks Foreign Policy. The magazine compares the Tokyo 2020 Olympics with those in 1964, when Japan was still suffering from the aftermath of WWII. Great read as it explains what the 1964 Olympics did for Tokyo: it transformed a war-scarred, dilapidated, diseased, and polluted third-world megalopolis where the harbour and the capital’s main rivers were thick with sludge from human and industrial waste, into a modern, well functioning metropolis.