Week of July 25, 2016
- For weeks there are rumours that Japan’s Emperor might abdicate and according to sources with connections to the matter, writes the Yomiuri / The Japan News, "the 82-year-old Emperor anticipates that it may become necessary to cede the throne to Crown Prince Naruhito, 56, if the Emperor should become unable to fulfil his duties as the symbol of the state as he further advances in years.” In the first part of August the Imperial Household Agency is making arrangements to create an opportunity for the Emperor to express his thoughts directly to the public because it considers it important for the issue to be widely discussed among the public as abdication requires fundamental reviews of the system regarding the Emperor, who is the symbol of the unity of the people.
- With the July 10 elections in his pocket, PM Abe will reshuffle his cabinet, to be announced on August 3. Two days before an economic stimulus package will be announced that will include 13.5 trillion yen in “fiscal measures,” both direct government spending and loans, according to a draft of the package seen by Reuters on Friday. The package includes 7.5 trillion yen in spending by the national and regional governments and 6 trillion yen from the Fiscal Investment and Loan Programme, which is not included in the government’s general budget, the draft shows. The headline figure for the package, which includes public-private partnerships and other amounts that are not direct government outlays, comes to 28.1 trillion yen or USD 265 bln (Japan Today).
- But the effectiveness is already in doubt, at least for the investments in Japan’s high-profile Maglev trains, that will bring you sometime in the 2045 (!) in little more than an hour from Osaka to Tokyo. The investments in the Maglev infrastructure is no small beer: apr. EUR 90 bln. Japan Today quotes several experts that are critical of this project. "On paper, Maglev ticks most of the boxes,” said one expert, adding the benefits might not stack up in practice.
Other private economists share those doubts. “It is highly questionable whether we need to fast-track this,” said another, a senior economist at BNP Paribas Securities. PM Abe, who is close to JR Tokai Chairman emeritus Yoshiyuki Kasai, has touted the Maglev as a “dream technology” that could, for example, link New York and Washington in under an hour. Experts, however, cast doubt on the extent of overseas demand. “What is being sought is not super-high speed ... It’s safety, convenience, network and environmental protection,” said Reijiro Hashiyama, a University of Alabama professor emeritus. “In short, the export potential is zero.” (Japan Today).
- Abenomics failed? No, claims The Economist that carried an upbeat article about Abenomics. Inflation is modest, Japan’s government debt is huge and PM Abe's three arrows that were launched have not yet reached its targets fully, but “but as long as monetary and fiscal policy work in tandem, demand should be resilient. Mr. Abe’s bold macroeconomic efforts may then achieve some of what his structural reforms have so far fallen short of achieving. Abenomics has underperformed its targets but outperformed the past. And its next, surely more humble, three years could then improve on its first boastful ones.”
- Also for the Financial Times there are positive signs about the Japanese economy, even with a less than expected economic stimulus package of USD 265 bln. If Bank of Japan’s Governor Kuroda is showing a willingness to run policy tighter than the economy wants, this is a reason to buy the yen and be bearish on Japanese stocks. "Whatever the natural rate, the major worry is the BoJ gives up trying to force rates low enough for continued recovery. A happier thought is that the BoJ considers prospects for the Japanese economy sufficiently bright that such low rates are not as necessary as before.”
- Meanwhile Japan’s Government pension Investment Fund, one of the world’s largest, suffered a big loss, reported the Nikkei: a JPY 5.3 trillion or USD USD 52 billion for fiscal 2015, logging a negative 3.81% return due to a rising yen and falling stock prices. Its total assets shrank for the first time in five years, amounting to about JPY 134.7 trillion at the end of the fiscal year in March, the fund said Friday. Not (yet) consequences for its pay-outs to its pensioners.
- Line, the Japanese developed but Korean owned version of WhatsApp, went successfully public some weeks ago and here a story by the Nikkei on Line’s Asian ambitions in a highly competitive landscape with WhatsApp, FaceBook and Chinese Tencent. It operates in a region with a population of 500 million (Indonesia, Thailand, Taiwan, Japan and South-Korea) ,”and we can penetrate into 70% to 80% of" Indonesia, Japan, Thailand and Taiwan”, claims one of its directors. Great example of Japanese - South Korean cooperation.
- MUFG, or still better known as the holding of which Bank of Tokyo Mitsubishi-UFJ forms part, will become the first Japanese bank to purchase a major investment manager in the U.S. Rydex's assets under administration, mainly in mutual funds, are valued at USD 53.5 billion, making it the 10th-largest player in the country. The Nikkei reports that since 2013, Mitsubishi UFJ Trust has acquired four overseas asset custodians catering to hedge funds and investment funds but had not been able to break into the mutual fund market. The Rydex deal will boost its total assets under administration to USD 378 billion, making it the world's sixth-largest custody services provider after such U.S. giants as State Street and JPMorgan Chase.
- "We want to be a company that lasts 100 or even 1,000 years,” Fanuc’s President Inaba said when he explained that his so far rather secretive robot manufacturing company is opening up to partnerships with other companies. Fanuc has a partnership with Cisco and announced this week a partnership with Japanese telecom giant NTT. The Internet of Things, a main driver for Softbank to buy UK chip designer for a record amount, is also a driver for Fanuc to open up. I wouldn’t be surprised when Fanuc would announce new openings in Europe (Nikkei).
- The attacker who killed 19 disabled people and wounded another 15 last week stated to the police that "'Hitlerism' occurred to him in February”. It is a tragic story by a lunatic who was detained after he told his coworkers in the same clinic in February that "disabled people should be euthanised", and then told city officials the next day he is a member of the Freemasonry. He also said then there are some 800 million disabled people around the world and the money spent on them should be spent on something else (Japan Today).
- Bears in Japan are becoming increasingly aggressive and In Akita Prefecture, four people assumed to be victims of bear attacks were found dead between May and June. Pieces of human flesh were found in the stomach of one of the bears suspected to have attacked the victims. Other people in the prefecture have been seriously injured in recent attacks.Why? The sounds of bells and radios have long been assumed to be effective in frightening bears away. But experts point out this may no longer be true. On the opposite: they attract bears and Akita is not the only prefecture in Japan where bears are regularly spotted and attack humans (Yomiuri / The Japan News).
- Japanese counting is based upon the grouping of large numbers by 10,000 - and here an original idea: to celebrate your 10,000’s, 20,000’s and 30,000’s day (by then you are 82 years and one month old…). There are also the first commercial activities: one can also purchase 10,000th-day merchandise. Balloon Art Poppins, a Hiroshima-based company that sells gift balloons, offers a balloon for 10,000th-day anniversaries in the shape of the five-digit number, priced at ¥5,400 including tax.