Week of October 19, 2015
- To reach a 2% inflation target, a pay rise is necessary; moreover, Japanese corporations are sitting on a EUR 1.2 trillion cash pile. Rengo, the Japanese Trade Union Federation, is aiming for a 2% wage hike for next year’s spring negotiations, but Japanese companies are reluctant, due to China’s staggering economy and general economic uncertainty (Nikkei).
- Standard and Poor’s, that cut its rating on Japan from AA- to A+ (four notches below its top rating of AAA), advised PM Abe's government to raise VAT as the debt level is unsustainable. Abe's government aims to return to a primary budget surplus in fiscal 2020 and then lower the debt-GDP ratio, the world's worst, at around twice the size of Japan's EUR 5-trillion economy, so it is time to act (Reuters).
- While Japanese investments in China are slowing down, the Chinese are entering Japan in massive numbers. 47% of all foreign tourists visiting Japan come from big brother at its east. Japanese exports may be thriving by the relative low yen, but Japan is becoming a tourist destination as well. July - September 2015 brought well over 5 million visitors with an average spending of JPY 187,000 (Bloomberg).
- Japan is sometimes referred to as a country that does not like revolutions but evolutions - and evolution goes, as we all know, slow. This is also true for corporate governance. The Financial Times compares the conservative stance in corporate governance to voter’s behaviour: the public just happens to have voted the same party into power for 55 of the past 60 years. Japanese institutional investors are equally conservative. The most recent voting records of Japan’s powerful Investment Trusts Association show these institutional investors voted against 75 per cent of shareholder proposals for companies to raise dividends and against 91 per cent of proposals for share buybacks (Financial Times).
- Japan isn’t lucky with its own developed airliners. Mitsubishi Regional JET was initially scheduled for its first takeoff back in 2011. The flight has been postponed several times since for design and manufacturing reviews, and now again… (Nikkei).
- The merger between Anheuser-Busch InBev and SABMiller causes also Suntory to review its market position, in beer and for brown spirits such as bourbon and whiskey. Perhaps with Heineken? Nikkei).
- Japan may see itself as a homogeneous society (and with many Japanese still claiming that it is for 90% middle-class), but there is a substantial group of people that are seen as the low of lowest: burakumin, people that are working in slaughter houses and other “unclean” work conditions. How many people? Estimates are between 1 - 3 million. The BBC covered this subject (BBC).
- Website goo Ranking surveyed Japanese when they realise at or after a trip abroad "that they are really Japanese" and here the top-5: poor calculating to give back change, too big food portions and too sweet drinks as well as “longing for a bowl of white rice”. Obviously also a lack of service is listed (Japan Today).
- Japanese universities need bright ideas, claims Sahoko Kaji of Ivy-league Keio university. The University of Tokyo always ranked #1 in Asia but has been overshadowed by universities in Singapore and China. So something has to change. For your information, DUJAT is preparing a seminar on differences in knowledge transfer in Japan and the Netherlands in 2016.