Week of November 16, 2015
- Is PM Abe’s position so strong, or is the opposition so weak? It is clear that Shinzo Abe’s approval rates are down, but at the same time: there has never been a period in postwar Japan when the opposition was as weak as it is today. And this statement is by an analist close to Japan’s major opposition party DPJ, until 2 years ago ruling Japan (Financial Times).
- One of the reasons why PM Abe’s popularity is less than can be expected is the introduction of the state secrets protection law, that became effective December last year. A scheduled visit by a UN rapporteur for early December has been postponed upon request of the Japanese government and might be delayed for a year (Asahi Shimbun).
- With tensions over Chinese activities in the South China Sea, Japan is considering joining naval patrols in that area in a move that is likely to anger Beijing. The region is home to major shipping lanes through which ship-borne trade worth nearly EUR 5 trillion passes every year. And there are possible oil and gas fields. Japan already supplies the Philippines with defense equipment and now mulls over supplying it with coastguard vessels (Guardian).
- Mixed news on Japan’s economy last week: an official recession. GDP contracted at an annualised pace of 0.8% in the third quarter of this year, after also falling in the previous quarter. Weak business investment and shrinking inventories were behind the fall. The figure is not as bad as it seems, however. Consumption is in perkier shape. The real potential growth rate in Japan is probably only a little above zero, thanks to the country’s shrinking workforce. And critically, Japan’s nominal GDP (the sum of real GDP plus inflation) rose in the third quarter and has grown by 3.1% over the past year. I include again an article by FT’s Robin Harding last week proposing a review of terms like “recession”.
- A cheap yen may be a thing from the past - soon. Japan is gradually shifting away from sharply tighter fiscal policy and ever looser monetary policy. That will allow the yen to start recovering lost ground against its peers. Gains against the dollar may be limited but the European Central Bank is set to ease monetary policy again in December and the People’s Bank of China will weaken the renminbi as the world’s second-largest economy slows further. The yen’s days as the weakest major currency look increasingly numbered (Financial Times).
- I have heard of quite a few remarkable economic indicators, but not of red lipstick as a sign of an improving economy. Shiseido and Pola claim that women’s lip colors show that the Japanese economy is on its way up (Asahi Shimbun).
- What does the TPP or Trans Pacific Partnership free trade agreement mean for corporate Japan? Now that there is agreement on the TPP, notably between the USA and Japan, the Japanese government is to define new policy, including support for overseas ventures by small and midsize Japanese companies (The Japan News).
- Japan and China are competing heavily setting up Infrastructure projects in Asia - as well as in the USA. High speed railway projects are part of it and perhaps the Shinkansen can be seen between Houston and Dallas in some years. Hey JR Tokai, I would love to see your trains between Amsterdam and Rotterdam … and we have our tracks ready! (Nikkei).
- Part of Abenomics is Womenomics: to empower women in managerial roles, also in small and midsize companies. The gender pay gap in Japan is far wider than the OECD average and the ratio of female to male managers is less than 11 per cent. But a subsidy scheme failed to attract companies applying for funds (Financial Times).
- Ever heard about Japanese “Love Hotels”? Fancy places where you go with your beloved for an hour or two - and I’ve heard that the sky is the limit when it comes to the decoration of these hotels: steamships, trains, castles, UFO’s, often with the appropriate uniforms … But with a shrinking population, a huge influx of foreign tourists and too little hotel capacity these love hotels are transformed into more normal places (Financial Times).
- Some years ago some Dutch business relations wanted to climb Mt. Fuji with me but alas … the mountain was closed due to heavy mist. So we went to nearby Yunessun, a hot spring spa resort where you could take a coffee bath, or a bath in green tea, whisky or sake. And now also with Beaujolais Nouveau. Great pictures (Japan Realm).
- To close: Japan’s population may be shrinking, but its land is increasing. Nishinoshima, an island that popped up some years ago apr. 1.000 km south of Tokyo, is growing rapidly (NHK / news on Japan).