Week of April 4, 2016
- On May 26 and 27 the G7 meeting will be held in Japan’s Ise-Shima, a city with 130,000 inhabitants, a spectacular national park and one of the most beautiful coast lines of Japan (own experience). It hosts beautiful temples and for many Japanese Ise-Shima has also a spiritual meaning. Now, Ise-Shima is not too far from Hiroshima and the question is: will President Obama visit Hiroshima, the city destroyed by the first nuclear bomb? Over the last months, the White House has received thousands of letters from civic leaders, disarmament activists, schoolchildren, and others urging a presidential visit. A “Letters to Obama” campaign, organised by a Hiroshima broadcasting company, collected invitations from scores of Japanese. Letters were written on paper recycled from some of the ten million origami cranes that people all over the world send to Hiroshima each year. The magazine Foreign Affairs writes about the dilemma that the Obama administration is facing when making a decision. By the way, Barack Obama received in 2009 the Nobel Peace Prize in part for his discussions of nuclear disarmament …
- The Diplomat, a Tokyo based international current-affairs magazine for the Asia-Pacific region, came up with an interview with Bill Hayton, the writer of the acclaimed The South China Sea, the Struggle for Power in Asia. 40% of the world trade, incl. to and from Japan, passes through this sea and it is seen as a theatre for future clashes between China and the USA.
- Last week the Japanese Diet (lower house) started its discussions about the Trans Pacific Partnership / TPP, one of PM Abe’s biggest challenges and he argues that the trade agreement will provide a sustained JPY 14 trillion (EUR113 billion) boost to Japan’s GDP. Opposition parties arguments against the deal put the impact on the Japanese agricultural sector front and center. Perhaps the entire discussion will be useless when Donald Trump or Bernie Sanders will be elected in November, both being against this TPP (Nikkei).
- Despite heavy interference of the Bank of Japan (bond buying, negative interest rates), the cornerstone of Abenomics a strong yen vis-a-vis the US Dollar and the Euro, is a problem. The yen is becoming stronger and this poses a serious problem for Japan. In January the yen - dollar was 125 - 1, now it is 108 - 1. Akio Mimura, chairman of the Japan Chamber of Commerce, said that a range of Y110-Y115 was the comfort zone for small- and medium-sized companies (Financial Times).
- Foreign investors are net sellers of Japanese stock and they sold 5.1 trillion yen ($47.2 billion) more in Japanese shares than they bought in fiscal 2015, their biggest net selling in 28 years. The Tokyo Stock Exchange released the data Thursday for the year ended in March. This marks the first time such investors sold more than they bought in seven years (Nikkei).
- A major problem for the Japanese government is the reluctance by Japanese consumers to simply spend money. With negative interest rates (although not applicable for the ordinary consumer bank deposits and the recently introduced "My Number" national identification system, the Japanese save, or rather: they tuck money away at home. So the Bank of Japan is to print 17% more 10,000 yen bank notes (JPY 10,000 = EUR 81) this year. Hideo Kumano, chief economist at the Dai-Ichi Life Research Institute, estimates that the total volume of cash being saved by Japanese households at home is about 40 trillion yen or EUR 320 billion … (Asahi.)
- Japanese companies are suffering from the reluctant Japanese consumer. Restaurants and retail stores, they all suffer. One clear example is Fast Retailing , better known as Uniqlo. The company raised its prices last year - and won acclaim of PM Abe, but is now reversing these rises. It slashed its full-year outlook for the second time this year, and is now focusing on cutting production costs. Fast Retailing shares ended last Friday 11% lower (Reuters.)
- Interesting article in the Financial Times about Japanese innovation power: “There is a growing Japanese tradition of first winning the global initiative through inventiveness, only to lose it later through poor timing, poor luck or mistaking what customers really want.” The article focuses on Yamasa, the company that claims to have invented the pedometer, a small device that counts your steps (and that allows you to keep your physical condition in shape.) Some of Japan’s leading CEOs recently complained of the country’s failure to embrace globalisation as a concept. Close CEO advisers to prime minister Shinzo Abe, including Rakuten’s Hiroshi Mikitani and Suntory’s Takeshi Niinami, push for greater top-down appreciation of the need to globalise (Financial Times.)
- Dementia in Japan is, as elsewhere, on the rise, but the questions is how to cope with it? Right now apr. 5 million Japanese are suffering from senility and that number will rise to 7 mln in 10 years. It is also a budget problem: Public funding for long-term care for the elderly was the equivalent of just 1.2% of GDP in 2010 versus 3.7% in the Netherlands, according to the most recent OECD comparison. One reason is that relatives are still the main caregivers in Japan. There is a chronic lack of nurses - and beds. Bringing in nurses from abroad has not been successful, given the very high linguistic requirements. The Economist has a very informative article on this issue.
- “Karoshi” isn’t a particularly nice word: “death through overwork” is its meaning and alas: the number of people who die due to karoshi is on the rise. Not only among men, but also among women. Like often in Japan, phenomena like karoshi are well defined. Japan has no legal limits on working hours, but the labor ministry recognises two types of “karoshi:” death from cardiovascular illness linked to overwork, and suicide following work-related mental stress. A cardiovascular death is likely to be considered “karoshi” if an employee worked 100 hours of overtime in the month beforehand, or 80 hours of overtime in two or more consecutive months in the previous six. A suicide could qualify for karoshi if it follows an individual’s working 160 hours or more of overtime in one month or more than 100 hours of overtime for three consecutive months. Remarkable: Japan has a very low unemployment, so you would guess that conditions for workers are becoming better. However, the number of non-regular employees (so: not employed) are rising: in 2015, non-regular employees made up 38% of the workforce and in 1990 that was 20%.
- “A Pint or a Prayer?” The New York Times carried an article on buddhist monks in Japan turning into bar tenders, while “on duty”. Hirotake Asano, buddhist head priest at the famous Shingyoji temple nearTokyo has a clear statement: "Instead of lamenting that people no longer visit temples, I wanted to bring the temple to the people.” Asano now owns four restaurants and a golf shop. I reported earlier about different companies such as rent-a-monk providers through Amazon Japan and retail big Aeon for funerals and different rituals.
- Will the Abe government intervene to support its currency? MUFG’s Chief Economist discusses the topic at Bloomberg TV: Japan's Abe Weighs the Politics of a Stronger Yen
- Japan’s current account surplus higher than expected: Japan's Current Account Surplus Beats Expectations
- A new business idea: a cafe where you can play with hedgehogs: http://www.reuters.com/article/us-japan-cafe-hedgehog-idUSKCN0X32SY