Week of September 14, 2015
- No phoney parliament this week in Japan, when PM Shinzo Abe had his security bills approved in the Upper House: a fight between members of various political parties. See this BBC video http://www.bbc.com/news/world-asia-34298071 including images of demonstrations outside parliament. The Financial Times has a similar but more extensive reporting: http://video.ft.com/4490460361001/Japan-approves-defence-bills/World (perhaps pay-wall).
- Japan Today had a simple Q&A on Japan's contentious security legislation. Many Japanese worry that deepening U.S.- Japan security ties will make Japan a more likely target of anti-U.S. extremists, and increase the risk of becoming embroiled in a U.S.-led conflict. Some students worry the legislation could lead to a military draft as Japan’s population shrinks and ages.
- Also The Japan News, the English edition of the conservative Yomiuri Shimbun, reported extensively on the subject. Interesting remark by a lawmaker close to Abe, “Abenomics is a lifeline for the administration. I hope he [Abe] will boost his administration once again with economic measures, and then pave the way to amending the Constitution” (the new security bills are now mainly a reinterpretation of the current Constitution).
- Have a look to this graphic overview of the military power in the world, incl. that of China and Japan.
- Standard & Poor's downgraded its rating on Japanese debt from AA- to A+ in what it framed as an indictment of prime minister Shinzo Abe’s economic strategy. "Despite showing initial promise, we believe that the government’s economic revival strategy — dubbed ‘Abenomics’ — will not be able to reverse this deterioration in the next two to three years.”
- One of the proposed measures by the Abe government to get Japan’s finances in order is to raise the VAT with another 2% from 8 > 10% in 2017. However, the government plans to compensate for the increase of costs-for-living by keeping an 8% VAT regime on a series of daily necessities, incl. food. Here is the plan: each time you buy your rice, orange juice or pre-packed sushi in the supermarket or convenience store you have to show your ID to be eligible for the discount. "This is nothing like the reduced rate we’ve been calling for,” said Makoto Nishida, secretary-general of the Komeito party in the upper house. “The concept is not the same.” And: 70% of the public is opposed.
- Mr. Yen or Eisuke Sakakibara, former vice minister of Finance and member of DUJAT's Advisory Board in Japan, told Bloomberg that the year of a cheap yen is coming to an end. "Mr. Kuroda’s monetary policy, aggressive easing of the monetary policy, has worked during the last couple of years,” Sakakibara said. “And both Mr. Abe and Mr. Kuroda are quite content with the current state of the economy.”
- No shortage of cash at corporate Japan: it has no less than 243 tln yen in cash available, apr. EUR 1.8 tln. Inflation has slipped back to zero, which may encourage some consumers and businesses to save now and spend later, given there is less likelihood of near-term price rises. Also M&A abroad is on the rise, see graph. "The deflationary mindset is still deeply rooted,” said Hideo Kumano, an economist at Dai-ichi Life Research Institute and former BOJ official. “Companies are not sold on Abenomics.” That is an ominous sign, if Japan’s corporate sector doesn't believe in PM Abe’s strategy to boost Japan’s corporate sector ...
- “Made in Japan”: it was - and is - a quality seal even if many components of the ultimate “Made in Japan” product are made outside. Japan’s corporate sector is reshoring but there is more reason than rising labour costs in China or other countries. Sometimes there is simply too much production capacity. Mizuho Securities estimates that a switch to domestic production for imported goods targeting Japanese consumers could still lift Japan’s overall industrial production by up to 3 per cent.
- No images of refugees in big numbers looking to enter Japan, rather the opposite. Last week Japan announced a change in its refugee system. Human rights activists said the changes, which were widely expected, will add extra hurdles to asylum seekers trying to reach Japan, as well as worsening conditions for many of the estimated 10,000 would-be refugees already in Japan.
- On January 2, 2011 a 7.1 strong earthquake hit Chile and 2 months later, March 11, the big 9.0 East Japan earthquake hit the country, causing a tsunami and a nuclear fall-out. On September 17 a 8.3 quake hit Chile and now the waiting is for another big one in Japan. Last week Lloyd’s of London released their City Risk Index and named Tokyo as the 2nd riskiest city in the world. The study cited an elevated chance of natural disaster (earthquake, flood and typhoon) but also named nuclear accidents as a high risk, adding that Japan could lose 39 trillion yen ($324 billion) of its GDP to potential disasters over the next decade. So Tokyo inhabitants have received a new Disaster Preparedness Guide, beautifully designed and really interesting to see.
- After the 2011earthquake the Olive Project was initiated, providing tips and tutorials on how disaster-stricken areas can use design to help improve their everyday life. After all, one of the most important things in times like these is trying to feel and live normally.
- Finally: a bookstore offering one title a week at expensive Ginza.