Week of September 19, 2016
- You will remember that Japan’s Emperor spoke to the nation in a rare video message to the public on Aug 8 in which he voiced concern that he could one day become unable to fulfil his role as the symbol of the state because of his advanced age. What happened since? Well, as expected, a Committee has been formed, reports Japan Today, comprised of various people with at least for me interesting backgrounds.
- North Korea is rapidly ramping up its nuclear capabilities as well as its ballistic arsenal and that was PM Abe’sleitmotiv when he addressed the UN General Assembly last week. This year alone more than 21 ballistic missiles have been launched by North Korea, Abe said, with several of them reaching waters within Japan's exclusive economic zone - 200 nautical miles from its coast. "It is purely a matter of good fortune that no commercial aircraft or ships suffered any damage during this incident,” he said, adding that "there is no alternative but to say that the threat has now reached a dimension altogether different from what has transpired until now.” (CNN). Interestingly enough PM Abe also seeks help from Cuba that he visited last week and from Iran, that he will visit soon, as both regimes are supposedly in close contact with the government in Pyongyang.
- Japan’s foreign relations management requires more than ever the skills of a simultaneous chess player: North Korea, China, a possible Trump victory with all its implications for Japanse defense - and then there is Russia. At least on this front there is something positive to report now that the island dispute between Japan and Russia seems to move forward to a solution. Russia badly needs investments - and that is what Japan can offer. President and judoka Putin is to visit Japan in December and “the recent Japan-Russia rapprochement staged by Japanese Prime Minister Shinzo Abe is both spectacular and audacious given the tectonic shift it represents in the post-war diplomacy Japan conducted so far with Russia”, writes The Diplomat, an online magazine based in Tokyo.
- Tectonic shift: that is also what the Bank of Japan’s Governor Kuroda is causing when he made a thorough assessment of its past strategy to reach a 2% inflation. "Having so far undershot his 2% target, Mr Kuroda defiantly pledged to overshoot it, promising to keep expanding the money supply until inflation rose above 2% for an unspecified time. And in addition to keeping short-term rates at -0.1%, Mr Kuroda vowed to keep long-term rates, specifically the yield on ten-year government bonds, at about zero for the foreseeable future.” That is new territory for central banks. Added also a simple overview of the most important changes, courtesy Yomiuri / The Japan News.
- Financial Times’s Tokyo financial correspondent Robin Harding has doubts if this new policy will work. "BoJ experiment risks the worst of all worlds. New tools may deliver little easing benefit now, but big problems if and when inflation starts to rise”. Harding claims that in 2010 the FED, the US Central Bank, considered to imply the two strategy-shifts: one was that the Fed should promise to overshoot its 2 per cent inflation target. Another was that it should effectively make its bond purchases unlimited, putting caps on yields and promising to buy all bonds offered at that price. The FED thought these two ideas were too radical, but now the Bank of Japan has embraced them. But what if inflation really takes-off? It might get out-of-control, reason why the ECB will not follow this as Germany has bitter experiences with an uncontrollable inflation. See also video: Japan’s monetary policy in 90 seconds.
- Japan and the EU are to start a new round of negotiations, the 17th round, in the coming week on their envisioned trade agreement. Japan is focusing at lifting EU import taxes on automotive parts, writes the Nikkei, while the EU looks to increase its export of agricultural products to Japan. Japan uses its upcoming TPP treaty with mainly the US as a threat in its discussions with the EU (while I think this TPP agreement will not be signed at all or at best: will be altered after the US elections in November).
- Mitsubishi UFJ Financial Group’s chief executive, Nobuyuki Hirano, warned in an article in the Financial Times, together with a page-long ad, that a Brexit has to be orderly and the softest possible exit. "Mr Hirano’s remarks echo the private fretting among Japan’s big banks and security houses. In public, most have said they are 'studying the situation'. In reality, say people familiar with the situation, they have already begun preparations to establish hubs in European cities beyond London." Amsterdam is surely in the limelight as a possible alternative to London.
- In another article in the Financial Times, Japan’s behemoth advertising agency Dentsu was reported to have overcharged a wide range of its clients. “We offer our deepest apologies for causing trouble to our advertising clients and other stakeholders over our domestic online advertising services,” Shoichi Nakamoto, Dentsu’s senior executive vice president, said, making the traditional Japanese bow of contrition at a packed news conference.
- "You may think I'm crazy, but I am serious about building a group that will prosper for 300 years. Flexibility and dynamism are necessary to realize that,” Mr Masayoshi Son, founder and Chief Executive of Softbank told The Nikkei last week. From a series of 8 articles in the Asia Nikkei Review I chose one that explains Mr Son’s vision on the future and that one is powered by chips, reason why Softbank bought UK chip designed Arm Holdings for no less than GBP 24 bln. Son compares himself sometimes with a boxer and with a go-player and now plans to put "emotions" into automobiles. Softbank has agreed with Honda Motor to develop a car that can read the driver's emotions. The two companies have already developed communications equipment for connected cars.
- Japan and the death penalty: there is pressure from outside (Amnesty International) and now also from inside Japan, with the Japan Federation of Bar Associations (whose membership includes 37,000 lawyers and hundreds of other legal professionals), stating it would declare its opposition to capital punishment at a meeting in early October due to growing concern over miscarriages of justice. There are 124 inmates on death row in Japan, 89 of whom are seeking retrials, according to the justice ministry (The Guardian).
- Internet shopping is on the rise in the Netherland and also in Japan among elderly households. The Yomiuri / The Japan News reports that the percentage of elderly households that shopped online was 13.6 in 2015, or 3.6 times more than the 3.8 percent in 2005. Many used online payments for travel, at 22.5 percent, or shopped online for food, at 16.4 percent.
- Godzilla, the monster, we all know his terrific appearance. A new Godzilla movie has been released in July this year, very successfully, and here an article in the Washington Post on this movie and in particular how the reactions reflect Japan’s assessment of its role in the world. The film has a “soft nationalism” at its core, said Mark Schilling, a film critic for the Japan Times newspaper. “There’s a sense that ‘We Japanese have to do this ourselves; we can’t rely on the Americans to help us,’ ” he said. PM Abe has endorsed the film. “I heard that the chairman of the Joint Staff Council and members of the Self-Defense Forces appear in the film and are depicted as being very heroic,” Abe told a military gathering this month. “I think that [Godzilla’s] popularity is rooted in the unwavering support that the public has for the Self-Defense Forces.”
- Recommended video’s
- 2% or more inflation: what will it do to the Yen? Yen Sinks When Inflation Hits Japan: Goldman's Beinner
- Financial Times Robin Harding on Japan’s new monetary policy: http://video.ft.com/5134796507001/Japans-monetary-policy-in-90-seconds/editorschoice
- Obesity in Japan - and how to dress? See Plus-size fashion show looks to break taboos in Japan - YouTube