News On Japan

Japan 2011 current account surplus smallest in 15 years

Reuters — 2012-02-08 06:52:03

Japan's current account surplus shrank sharply last year to its smallest in 15 years as weak exports and surging fuel imports resulted in a rare trade deficit, raising worries about the country's declining ability to fund its huge public debt with domestic savings. The current account balance -- a broad measure of trade and other flows--logged a surplus of 9.6289 trillion yen ($125 billion) in 2011, down 44 percent from the previous year, marking its biggest fall on record, although income from overseas investment still more than offset the trade deficit. The decline in inflows has been heralded by earlier data that showed Japan posted its first trade deficit since 1980 last year as a devastating earthquake in March hurt exports and increased its reliance on fuel imports due to nuclear plant shutdowns. (Reuters)

Japan's perverse message; just tax the corporate cash mountains even more

telegraph.co.uk — 2012-02-07 21:18:30

Everyone thinks of Japan as a nation of savers. Stop the blighters from saving and get them to spend instead, it is often said, and the country's economic woes would be over. In reality, it's a bit more complicated than that. In fact Mrs Watanabe no longer saves that much. The last time I looked, she was down to the sort of pitiful savings ratio we see in the UK and the US. At the vanguard of the ageing process, in fact Japan is moving into that phase of demographics where in aggregate, households may soon be in savings drawdown, rather than further adding to them. But the same is not true of companies. Poor levels of domestic demand means that in aggregate, there is not enough to invest in, even though Japanese companies are big investors in the future. The consequent surplus is recycled into J-bonds instead, where it finances the deficit. (telegraph.co.uk)

Nation's bullet train blues

Japan Times — 2012-02-07 21:06:03

The central government has decided to start construction work on three sections of three planned Shinkansen bullet train lines - the Shin Hakodate-Sapporo section of the Hokkaido Shinkansen Line, the Kanazawa-Tsuruga section of the Hokuriku Shinkansen Line and the Isahaya-Nagasaki section of the Kyushu-Nagasaki Shinkansen Line. The construction of the new Shinkansen sections, whose total cost is estimated at ¥3.01 trillion, could cause problems for the central government, local governments concerned and local residents. Since the central government and local governments along the planned Shinkansen lines cannot attain tax revenues large enough to cover the construction costs, the government decided to siphon the fees Japan Railway companies pay to the Japan Railway Construction, Transport and Technology Agency for use of Shinkansen tracks owned by the agency. (Japan Times)

Japan's forex reserves hit record high at $1.307 trillion

kuna.net.kw — 2012-02-07 09:58:49

Japan's foreign exchange reserves hit a new record of USD 1.307 trillion at the end of January, up 0.8 percent from the previous month, the Finance Ministry said Tuesday. The previous record was USD 1.305 trillion posted in November. The reserves marked the first increase in two months and remained the world's second-largest after China, according to the ministry. The increase was also attributed to valuation gains in the government's holdings of the US Treasuries, as lower interest rates in the US drove bond prices higher, the ministry said. Other factors included a rise in gold prices. (kuna.net.kw)

The sun is setting on Japan; a third 'lost decade' awaits

firstpost.com — 2012-02-06 23:33:31

The 'Santa Claus' rally in global equity markets towards the end of 2011 has extended well beyond the first few weeks of January. The broadbased S&P 500 index is approaching its 2011 highs on the back of better-than-expected jobs data released on Friday and the US Federal Reserve mandate to keep interest rates near zero until 2014. European markets too have been moving up along with the euro, which is again above the key 1.3 level versus the dollar, as European leaders are finally sending out a strong message that they are serious about resolving the sovereign debt crisis. Inflation in emerging market heavyweights China and India is believed to have peaked out and interest rate easing cycle is set to begin. But looking further east, things are not looking so bright in the land of the rising sun - Japan, which faces a lot of headwinds and fundamental challenges in 2012. (firstpost.com)

Japan's once powerful industries are now crumbling

zimbabwemetro.com — 2012-02-06 23:33:31

Within the Japanese business community there are whispers of a sense of paralysis or "hopelessness", and the fear that if decisive action is not taken, some of the companies that were the engine for Japan's postwar growth could fall into irreversible decline. "Japanese companies cannot keep doing what they have been doing," says Hiroshi Mikitani, the founder of e-commerce giant Rakuten, equivalent to the Japanese version of Amazon.com

The country's electronics sector has been hit by the success of South Korea's Samsung and LG, which assemble products in lower-cost countries such as China, Indonesia and Thailand. There have also been lack of ambitions since the bubble burst, for instance, Japan already had web-surfing handsets nearly a decade before the iPhone, yet local producers failed to tap overseas markets. (zimbabwemetro.com)

Govt expands use of FX reserves / Economic diplomacy used to assist Eurozone, stem Asian currency declines

Yomiuri — 2012-02-06 23:21:09

The government is strengthening its economic diplomacy by utilizing foreign exchange holdings to help stem Europe's ongoing financial crisis and prevent sharp declines in the value of Asian currencies. The expanded use of the foreign exchange reserves is also aimed at addressing criticism that the huge amount of funds are not being used effectively, observers said. The government had used most of its foreign exchange reserves to buy U.S. Treasury bonds, which are regarded as a safe investment. But faced with increasing international requests for the nation's contribution to resolve the European sovereign debt crisis, the government has started using its foreign exchange pool to contribute to the International Monetary Fund's plan to expand financial resources. (Yomiuri)

Rising bond auction demand defies growing debt-burden concerns

Japan Times — 2012-02-06 23:15:57

Demand has risen at every note and bond auction in Japan this year, helping the nation maintain the world's second-lowest borrowing costs on a debt burden poised to exceed ¥1 quadrillion. Last week's sale of 10-year notes attracted bids for 3.72 times the ¥2 trillion offered, the highest so-called bid-to-cover ratio since April. It was the sixth-straight sale of debt this year where demand increased, boding well for Thursday's auction of 40-year bonds, the longest maturity. The benchmark 10-year yield slid to 0.94 percent on Feb. 3, within 0.5 basis point of the 14-month low reached in January. (Japan Times)

FSA seeks disclosure on bank salaries

Japan Times — 2012-02-06 23:08:11

Citing an international trend to clamp down on risk-taking that could lead to financial disasters similar to the 2008 collapse of Lehman Brothers, banks will soon be required to disclose the salaries of employees who earn as much as board members do, a Financial Services Agency official said Monday. Starting in July, banks will have to disclose how many such employees they have and their collective salaries each year, FSA Supervisory Bureau official Tsuyoshi Saito said. It "will be up to each bank" to disclose any further information, he said. "We are doing this as part of an international movement to prevent banks from linking too much of an employee's salary to performance," Saito said. (Japan Times)

Japan to suffer sovereign downgrade this year: experts

donga.com — 2012-02-05 23:13:36

The Japanese economy, which has been suffering from a huge national debt for a long time, could see a sovereign downgrade this year, many experts say. Amid such fears, they warn of the prospects of the yen and Japanese Treasury bonds plummeting. The yen and the bonds have been considered safe assets since the 2008 global financial crisis. To restore fiscal soundness, Tokyo is mulling measures such as tax reform, but has failed to win over global investors due to poor political leadership. The collapse of the Japanese economy will have a negative impact on the Korean economy through an outflow of Japanese funds, according to experts. (donga.com)

Japan must be ready to expand stimulus: IMF official

Taipei Times — 2012-02-03 23:45:19

The Bank of Japan (BOJ) should be ready to expand monetary stimulus and intervention is an option if the yen moves excessively, an IMF official said in Tokyo. "Intervention could be an option," if yen moves are too large, Naoyuki Shinohara, a deputy managing director, said yesterday. "Japan's economy has many downside risks, so depending on the circumstances, the BOJ should always be ready to expand quantitative easing." The central bank kept its asset-buying fund at ￥20 trillion (US$260 billion) and its credit-lending program at ￥35 trillion on Jan. 24 while cutting its forecast for the nation's growth. A yen near post World War II highs against the US dollar is eroding exporters' profits just as faltering global growth undermines demand, with Panasonic Corp yesterday forecasting a record loss for the 12 months ending March. (Taipei Times)

If Japan is our worst-case scenario, we're all right

Motley Fool — 2012-02-03 23:18:40

In 1991, former MIT dean Lester Thurow wrote that "If one looks at the last 20 years, Japan would have to be considered the betting favorite to win the economy honors of owning the 21st century." He wasn't alone. The standard view of the 1980s held that Japan's sway over the world economy was unbreakable. Its economy grew faster. Its corporations were more efficient. Its workers more productive. In 1988, former Reagan official Clyde Prestowitz warned: "The American century is over. The big development in the latter part of the century is the emergence of Japan as a major superpower." Such comments are now ridiculed relentlessly by analysts and commentators, including myself. Japan, after all, did not boom. Far from overtaking the United States, its economic growth stagnated for two decades, its stock and housing markets collapsed, and its government entombed itself in debt. Twenty years ago, Japan was synonymous with the phrase "juggernaut." Today, it's often seen next to the phrase "lost decade." America should take notice, we hear these days. If we don't get our act together, we could be in for a lost decade or two just like Japan. (Motley Fool)

Detroit automakers say 'no' to Japan joining trade talks

Reuters — 2012-02-03 23:18:40

Detroit automakers are urging President Barack Obama to reject Japan's bid to join talks on a regional free trade agreement, the head of an automotive group representing GM, Ford and Chrysler said on Thursday. "Adding Japan to the Trans-Pacific Partnership negotiations will lengthen those negotiations ... by years and perhaps keep them from ever coming to fruition," Matt Blunt, president of the American Automotive Policy Council, told Reuters. While Detroit automakers support Obama's goal of creating a free trade pact in the Asia Pacific, they do not believe U.S. negotiators can dismantle "non-tariff" measures Japan has long used to keep U.S. autos out of its market, said Blunt, a former Republican governor of Missouri whose father is a U.S. senator. (Reuters)

As red ink flows, Japanese firms struggle to keep manufacturing at home

csmonitor.com — 2012-02-03 23:18:40

Following the report of Japan's first annual trade deficit in more than 30 years, the country's major manufacturers have been delivering earnings results soaked in red ink. The factories that once powered the economy by churning out world-beating electronics, cars, and machinery are either being relocated overseas or losing out to Asian rivals. Japan will now have to come to terms with a new post-industrial economy that will see it increasingly rely on income from overseas investments. Japan recorded a trade deficit of nearly 2.5 trillion yen ($32 billion) in 2011 as a storm literally battered its industries. The March tsunami destroyed factories, ports, and infrastructure, disrupting supply chains across the country and the globe. (csmonitor.com)

Japan Inc. suppliers cut jobs as yen batters tv, chip profit

BusinessWeek — 2012-02-03 11:48:13

Japan Inc. is suffering and the supply chain is bearing the cost. Sumco Corp., a supplier to Sony Corp. and Toshiba Corp., said yesterday it will cut 1,300 jobs. Auto windshield maker Nippon Sheet Glass Co., which sells to Mazda Motor Corp., said it will cut 3,500 jobs. They join NEC Corp., a Japanese maker of telecom equipment and components, which said last month it would eliminate 10,000 positions. The yen's 7 percent surge against the dollar in the past 12 months has widened losses at Panasonic Corp. Sony, Mazda and Sharp Corp., which plans to halve TV production at its biggest factory to reduce inventory. Manufacturers have been forced to both relocate production outside of Japan and to press their suppliers for cost cuts. (BusinessWeek)

Nuclear crisis bolsters Japan push for utilities reform

Reuters — 2012-02-01 08:16:02

Mayor Nobuto Hosaka had more than saving taxpayers' money on his mind when he recently invited bids from rivals of giant utility Tokyo Electric Power Co to supply power to his ward in Japan's capital. Hosaka, like other advocates of reform, hopes altered public sentiment after the nation suffered the world's worst nuclear crisis in a 25 years will spur reforms of an electricity oligopoly dominated for decades by regional utility fiefdoms. "Doing this will reduce our electricity costs," said Hosaka, a former lawmaker from a tiny left-leaning party who now runs a area of Tokyo that is home to some 800,000 people. "But the reason this attracted so much attention was that until now, the voices of ordinary users -- the people, residents of the ward, businesses -- have not been heard," he told Reuters. (Reuters)

Delicate wage negotiations

Japan Times — 2012-02-01 00:13:15

The annual wage negotiations for 2012 take place in a difficult situation marked by the effects of the March 11 disasters, the floods in Thailand, prolonged deflation and the strong yen. Labor and management must search for a wage level that is not only reasonable but also will eventually contribute to strengthening the Japanese economy as a whole. Kicking off wage negotiations, Mr. Hiromasa Yonekura, head of the Japan Business Federation (Keidanren), Japan's most influential business lobby, on Jan. 25 met with Mr. Nobuaki Koga, head of the Japanese Trade Union Confederation (Rengo), Japan's largest labor organization. Rengo seeks to increase the total volume of wages by 1 percent from the previous year. (Japan Times)

A worrisome trade deficit

Japan Times — 2012-01-30 23:14:35

Japan's trade balance went into the red in 2011 - the first since 1980 when soaring oil prices caused a trade deficit. But the current account balance is still in the black thanks to income generated by Japan's overseas net assets amounting to some ¥250 trillion. This money is reinvested overseas to generate further income. Still, utmost care must be taken to prevent trade deficits from becoming a regular feature of the Japanese economy. In 2011, Japan's exports decreased 2.7 percent from 2010 to ¥65.554 trillion - the first dip in two years. Behind the fall were such factors as the serious damage inflicted on supply chains by the March 11 disasters and a slowdown of the world economy caused by the sovereign debt crises in Europe. Japan's car exports declined 10.6 percent and exports of electronic parts by 14.2 percent. (Japan Times)

Japan's pension problem

Japan Times — 2012-01-30 23:14:35

In its manifesto for the 2009 Lower House election, the Democratic Party of Japan proposed introducing a minimum monthly pension of ¥70,000 or more. In their recent outline for tax and social welfare reforms, the government and the party only stated that they will submit a proposal for a minimum pension of about ¥70,000 to the Diet in 2013. They should make serious efforts to flesh out their proposal, which lacks concrete details. The 2009 manifesto called for unifying existing pension schemes and having all people participate in the same pension scheme. Everyone would be entitled to a minimum monthly pension of ¥70,000 or more, which would be funded by the consumption tax. (Japan Times)

In disparity-ridden Japan, don't mind the gaps - just get out of them

Japan Times — 2012-01-29 01:54:32

When the term kakusa shakai came into vogue in 2006 - a fairly self-explanatory expression given that kakusa means "gap" or "disparity," and shakai means "society" - it was a clear sign of Japanese people having finally recognized that the notion of theirs being a hope-filled nation of upwardly mobile middle-class people was a myth. In fact, being a highly stratified country, Japan has always been riddled with gaps. And its social strata, like layers of rock from different eras piled on top of each other, don't readily mix with each other. It takes something on the seismic scale of the 1868 Meiji Restoration, which marked the overthrow of centuries of military government under the Tokugawa Shogunate, and the social revolution of the latter half of the 19th century, to dislodge and remix the strata. (Japan Times)

Japan prices fall, mild deflation to persist

Reuters — 2012-01-27 12:06:01

Japan's core consumer prices fell for the third consecutive month in the year to December, and mild deflation is expected to persist this year as energy prices stabilize and worries about Europe's debt crisis suppress wage growth and economic activity. Core consumer prices declined an annual 0.1 percent, matching the median estimate, and a narrower measure that excludes both food and energy also fell in a sign that Japan continues to grapple with a strong yen, which pushes down import prices and makes exporters reluctant to raise salaries. Retail sales fell 1.2 pct in 2011, the first fall in two years, and auto and machinery equipment sales posted record falls in the series, which dates back to 1980. But sales rose an annual 2.5 percent in December, the biggest increase in 16 months. (Reuters)

Govt aims to add millions of part-timers to state-run pension scheme

Yomiuri — 2012-01-26 23:30:51

The Health, Labor and Welfare Ministry is seeking to add millions of part-time workers to those covered by the government-run employee pension scheme. Part-time workers are automatically covered by the pension scheme if they work at least 30 hours a week, but the ministry plans to lower the threshold to 20 hours. The change would apply to workers earning at least 800,000 yen a year at companies with at least 300 employees. The measure will be included in bills the ministry will submit to revise related laws during the current Diet session. (Yomiuri)

CO2 emissions traded to help Tohoku region

Yomiuri — 2012-01-26 00:09:54

Firms that emit greenhouse gases but also want to help revitalize business in the Tohoku region following the Great East Japan Earthquake are being drawn to participate in a carbon dioxide offset trading scheme. Named J-VER (Japan Verified Emission Reduction), the scheme is a type of carbon-offset program. Under the scheme, entities practicing silviculture through thinning, planting and other means can enter a certification process to claim credits, depending on how much carbon dioxide their forests absorb. Including prefectural governments, the entities can then sell their credits to other bodies wanting to act on global warming. (Yomiuri)

Japan, hit by quake impact and rising yen, announces first annual trade deficit since 1980

Washington Post — 2012-01-25 12:54:03

The devastating March tsunami and shift of manufacturing overseas plunged Japan's trade account into the red for the first time since 1980. Experts said the years of Japan running massive trade surpluses are likely over. The 2.49 trillion yen ($32 billion) deficit for 2011 reflected a surge in energy imports to cover shortfalls caused by the disaster. and a 2.7 percent decline in the value of Japan's exports to 65.55 trillion yen ($843 billion), according to the Ministry of Finance figures released Wednesday. Manufacturers have moved some production overseas to avoid the damage inflicted by the strong yen, a trend that has accelerated in recent years. Some economists say the trade balance will be in the black again within two years, but the era of very large surpluses that allowed Japan to build a huge pile of foreign reserves has ended. (Washington Post)

Japan posts first annual trade deficit since 1980

AP — 2012-01-25 06:24:28

Japan reported its first annual trade deficit since 1980 as it imported expensive energy to offset shortfalls caused by the devastating tsunami and manufacturers shifted production overseas to avoid the damage inflicted by the strong yen. The 2.49 trillion yen ($32 billion) deficit for 2011 reflected a 2.7 percent decline in the value of Japan's exports to 65.55 trillion yen ($843 billion). In December, the trade balance was a deficit of 205.1 billion yen, according to the Ministry of Finance figures released Wednesday. The yen's surge to record levels against the dollar and euro has made Japanese exports more expensive and also erodes the value of foreign earned income when brought home. Recently, Nissan Motor Co. and Panasonic Corp. have shifted some of their output to factories overseas. At the same time, Japan is facing intense competition from South Korea, Taiwan and Singapore, where labor and production costs are cheaper. (AP)

Japan's in for a hard landing

SeekingAlpha — 2012-01-24 23:34:45

Here in Japan, people are dour as the Bank of Japan cut its growth outlook for fiscal 2012 to +2.0 pct from its October estimate of +2.2 pct. It cited heightened concern about the eurozone crisis crimping the global economy, and the strong yen. Shortly after that, the government said it's likely to fail in its goal of balancing the budget by 2020 even if it proceeds with the wildly unpopular plan of doubling the national sales tax. Societe Generale's chief Japan economist quipped, "To balance the budget, the [sales tax] rate needs to rise further. We've passed the point where we can soft-land the fiscal situation. The question is how hard the landing is going to be." Pretty hard by the looks of it. (SeekingAlpha)

Japan-Peru FTA to kick in March 1

Japan Times — 2012-01-24 23:18:46

Japan's free-trade accord with Peru will go into effect March 1 now that all of the necessary domestic and diplomatic procedures have been completed, Foreign Minister Koichiro Genba said Tuesday. "I'm hoping that the two countries' economies will become more active" as a result of the agreement, Genba said. Japan and Peru will scrap tariffs on more than 99 percent of the value of goods traded between the two countries within 10 years after the effective date. (Japan Times)

BOJ sees recovery delayed as Europe bites but skips easing

Reuters — 2012-01-24 13:08:28

The Bank of Japan forecast the economy will contract in the current fiscal year but kept policy steady on Tuesday, expecting exports to emerging markets and reconstruction after last year's earthquake will help fuel a steady recovery later in 2012. BOJ Governor Masaaki Shirakawa, however, warned that Europe's sovereign debt crisis remained the biggest threat to Japan's recovery prospects, already clouded by recent yen rises against the euro and slowing global demand for Japanese goods. "At present, Europe's debt problem poses the biggest risk for the global economy, including Japan's. If the situation worsens further, it may trigger a global credit crunch," Shirakawa told a news conference after the BOJ's widely expected decision to hold off on additional monetary easing. (Reuters)

Exporter Japan eyes first trade deficit in 3 decades

Reuters — 2012-01-24 13:08:28

Japan probably produced its first trade deficit last year in more than three decades as energy imports surged to cover for the loss of nuclear power following the Fukushima disaster, a major blow to an economy built on its exports prowess. For decades Japan used an exports-orientated economic policy to build up global brand names such as Toyota, Sony and Canon and a manufacturing might that was the envy of the world. Official trade figures due for release on Wednesday are expected to show that Japan swung to a deficit for the first time since 1980, as utilities purchased fossil fuels for power stations to make up for the loss of nuclear power. (Reuters)

Japan puts reserves to work in global financing role as economy slips

Japan Times — 2012-01-23 22:16:44

Japan is crafting ways of using the $1.2 trillion it holds in currency reserves, the world's second-largest, to help bolster its role in international finance as economic stagnation diminishes its share of global output. Last month, Prime Minister Yoshihiko Noda sealed an agreement in New Delhi making about $15 billion of Japan's reserves available to India if needed. Noda also oversaw a deal with China in the same month to expand use of the yuan and yen in bilateral trade and purchase Chinese bonds. At home, officials are deploying ¥10 trillion in a fund aiding companies in overseas acquisitions. (Japan Times)

Japan manufacturers brace for euro zone breakup: Reuters poll

Reuters — 2012-01-23 10:34:37

Japanese manufacturers are bracing for a possible breakup of the euro zone, according to a Reuters poll released on Monday, with 65 percent saying they see a need to prepare for the currency block's partial or complete collapse. Europe's two-year old sovereign debt crisis, which has left Greece teetering on the edge of default, has taken a heavy toll on Japanese corporate sentiment as exporters struggle with a strong yen and slower growth in China. When manufacturers were asked if they are considering changing business plans in Europe, 31 percent of those responding said they are in the process of doing so or have already made changes. Of those firms, 90 percent said they could scale back operations or have already done so. (Reuters)

1.8 trillion yen in govt surplus funds unused

Yomiuri — 2012-01-20 23:44:53

About 1.8 trillion yen worth of surplus funds in the government's special accounts for fiscal 2009 remained unused even after the money was made available the following fiscal year, the Board of Audit has discovered. This is the first time the board has found that such a large amount of surplus funds in the government's special accounts has not been spent effectively. Central and local governments create special accounts to reserve funds for specific projects. Due to criticism that the central government's special accounts have been an inefficient use of money, the number of accounts held by ministries and agencies has been gradually reduced from 31 in fiscal 2006 to 17. (Yomiuri)

BOJ struggles to feed cash, fails to meet bill buy target

Reuters — 2012-01-20 11:36:17

The Bank of Japan failed to meet its target for purchases of short-term government securities on Friday, the first time since its asset-buying plan was put in place and raising questions about the effectiveness of the key monetary policy tool. Europe's sovereign debt crisis has boosted global investors' appetite for short-term Japanese government notes as a safe-haven asset, pushing borrowing costs below the central bank's policy rate of 0.1 percent for up to three months. (Reuters)

Korea and Japan ― a tale of two countries

Korea Herald — 2012-01-19 23:17:54

Over the past two decades, as Japan has gradually slipped down the OECD ladder in terms of GDP per capita, Korea has progressively climbed the same ladder. It's just a matter of time before Korea overtakes its neighbor. How could this happen? One important factor has been how the two countries have responded to crises. Japan was struck down by the collapse of its bubble economy two decades ago, and was also badly hit by the global financial crisis in 2008. Despite many calls for structural reforms, Japan has sought to keep its economy afloat by continued fiscal stimulus, rather than swallowing the necessary bitter medicine. The result is that Japan's public debt is now over 200 percent of GDP, and the economy is no stronger for it. By contrast, Korea has taken its structural reform agenda much more seriously, and is benefiting greatly from it. (Korea Herald)

Japan's age of denial

Wall Street Journal — 2012-01-19 23:17:54

Japanese are disappearing in slow motion and so far, there is no rescue plan. Every January, those turning 20 over the next twelve months celebrate their Coming-of-Age Day at shrines across the nation. Yet each year there are fewer of them. This year, only 1.2 million youth will turn 20, half as many as in 1970. On U.N. calculations, the 2010 population of 127 million will shrink by a fifth, to 101.6 million in 2050. Moreover, the decline speeds up over time, with the population dropping by 6.65% between 2015 and 2030, but plummeting a whopping 13.4% from 2030 to 2050-far and away the worst growth projection in the world. Consider that Pakistan is expected to nearly double its population, to 335 million, in the same period. (Wall Street Journal)

Japan health care no TPP issue: U.S.

Japan Times — 2012-01-19 23:05:55

Assistant U.S. Trade Representative Wendy Cutler told Diet members Wednesday that the United States sees no problem with Japan's heath insurance system in regard to the Trans-Pacific Partnership free-trade initiative. Although the Japan Medical Association is concerned that the United States could request Japan to revise its universal health insurance coverage, Cutler said she had no comment to make about the Japanese system, Lower House lawmaker Yasutoshi Nishimura said. Along with Taku Eto, another Lower House lawmaker, Nishimura met with Cutler to discuss the TPP negotiations. Both lawmakers are from the Liberal Democratic Party. (Japan Times)

Tohoku turned 2011 into record year for losses

Japan Times — 2012-01-19 23:05:55

Economic losses from disasters around the world in 2011 totaled a record $366 billion due mainly to the March 11 earthquake and tsunami, according to a United Nations report released Wednesday. The figure, which includes $210 billion in losses from the March disaster, compares with the previous record of $243 billion in 2005, data released by the U.N. International Strategy for Disaster Reduction showed. The March catastrophe tops the list of the most deadly and economically costly natural disasters last year, accounting for 57.4 percent of the total economic losses with an estimated 19,846 people killed or missing following the calamity, according to the ISDR data. (Japan Times)

Euro-yen intervention an option for Japan, but not now

Reuters — 2012-01-19 11:19:01

Japanese authorities, while reluctant to act now, may consider engaging in a rare intervention to stem yen rises against the euro if the moves appear to be driven by speculators and sharp enough to severely hurt business sentiment. If they were to act, authorities will step directly into the euro-yen market despite its low trading volume and may twin it with dollar-yen intervention to maximize the effect, say sources with direct knowledge of government tactics and market players. "Technically it's possible. People talk about the euro-yen market being too small, but that's not an obstacle," said a policymaker with direct knowledge of the matter. Another source expressed a similar view. Both declined to be named due to the sensitivity of the subject. (Reuters)

DPJ readies bill to cut Diet seats

Yomiuri — 2012-01-18 22:23:57

The Democratic Party of Japan's headquarters to promote political reform finalized Wednesday a proposed bill to reform the House of Representatives election system by cutting 85 seats from the lower house. The bill, formulated at an executive meeting of the headquarters the previous day, calls for eliminating one single-seat constituency in each of five prefectures in an effort to rectify imbalances in the value of votes seen in the chamber's 2009 election. The bill would revise a law concerning the government's Council on the House of Representatives Electoral Districts and takes into account a related plan by the main opposition Liberal Democratic Party. (Yomiuri)

Welfare ministry to make new poverty index

Yomiuri — 2012-01-18 22:23:57

The welfare ministry has decided to create a new poverty index in response to the sharp increase in the number of people living on welfare benefits and problems related to the working poor, it has been learned. The new index will help clarify Japan's poverty situation and rate by measuring factors such as health, food, clothing and living conditions. Although there are existing international poverty indexes, they are considered difficult to use and do not properly reflect Japan's actual situation, according to the ministry. The Health, Labor and Welfare Ministry plans to create the index within the next fiscal year, and will measure poverty rates continuously to provide data for the government when making new policies, such as reviewing welfare benefit criteria. (Yomiuri)

Academic to replace JICA's Ogata

Japan Times — 2012-01-17 22:24:24

University of Tokyo Vice President Akihiko Tanaka will head the Japan International Cooperation Agency from this spring, replacing Sadako Ogata, Foreign Minister Koichiro Genba said Tuesday. Tanaka, 57, a well-known professor of international politics at the university, will take up the top post at JICA on April 1, Genba told reporters after a Cabinet meeting. Ogata had requested replacement, as she has expressed concern about her advancing years, the minister said. (Japan Times)

BOJ cuts its economic view for seven of nine regions

Bloomberg — 2012-01-16 08:45:53

The Bank of Japan cut its economic assessment of seven of the country's nine regions as a global slowdown and the yen's gain threaten the nation's recovery from the March earthquake. Conditions in Hokkaido, Hokuriku, Kanto, Tokai, Kinki, Chugoku and the Kyushu-Okinawa area have deteriorated from October, the central bank said today in its quarterly Sakura Report on regional economies. It left its evaluation of Shikoku and the eartahquake-stricken region of Tohoku unchanged, citing reconstruction demand in the disaster area. (Bloomberg)

Japan key orders jump; policymakers fret over euro

Reuters — 2012-01-16 08:38:28

Japan's key gauge of corporate capital spending rose at its fastest pace in nearly four years in November, thanks partly to post-quake rebuilding demand, but policymakers were kept on guard over the potential fallout from the euro zone debt crisis. Policy chiefs reiterated their concerns about Europe's sovereign debt crisis as Asian share prices and the euro fell on Monday after Standard & Poor's mass downgrade of euro zone countries late last week. Finance Minister Jun Azumi said he is worried about the euro's fall as the common currency hit a fresh 11-year low of 97.04 yen at one point on trading platform EBS. (Reuters)

U.S. auto council opposes Japan joining in TPP talks

Yomiuri — 2012-01-15 22:28:07

A council representing the Big 3 U.S. automakers has declared that it opposes Japan joining negotiations on the Trans-Pacific Partnership free trade agreement at this time, saying Japan's auto market is not receptive to imports. The American Automotive Policy Council (AAPC) also said it is no longer reasonable for the Japanese government to give preferential treatment to the "Kei" category of super-mini vehicles that are manufactured only domestically. The AAPC expressed its views in an opinion paper submitted to the U.S. Trade Representative on Friday, the deadline for submitting opinions to the USTR to assist it in assessing Japan's expression of interest in the TPP negotiations. (Yomiuri)

Japan steps up efforts to crack untapped Myanmar market

Yomiuri — 2012-01-15 02:06:53

yanmar has been billed as "Asia's final frontier," and its rich resources and cheap wage levels are increasingly catching the eye of Japanese companies and the government. Economy, Trade and Industry Minister Yukio Edano on Friday met with President Thein Sein and other senior officials of Myanmar, and reached an agreement on Japan's cooperation in the Southeast Asian country's economic development. Rivals from China and elsewhere in Asia have already made significant investments in Myanmar's infrastructure and the procurement of natural resources. Although Myanmar's development has lagged other Asian nations due to economic sanctions imposed by Western nations, some restrictions have been loosened in recent months as it has made steps toward democratization. (Yomiuri)

Noda frets over Japan's credit rating

Japan Times — 2012-01-15 01:22:48

Prime Minister Yoshihiko Noda on Saturday expressed concern about Japan maintaining its sovereign debt rating, after France lost its coveted triple-A credit status the previous day. "The European crisis is not a fire on the other side of the river. Even France's rating has been lowered. If we continue to mismanage fiscal issues, Japan will (be next)," he said on a program broadcast by TV Tokyo. Standard & Poor's Ratings Services said Friday it has downgraded its long-term French bond rating by one notch from the highest AAA level, and has also lowered its ratings for eight other eurozone countries. (Japan Times)

Japan's trade balance

The Economist — 2012-01-12 23:32:04

Imbalances are not for ever. In the 1980s and 1990s, Japan's huge trade surplus was a popular target for American and European protectionists. No longer. Provisional estimates suggest that Japan's merchandise trade moved into the red in 2011-its first annual deficit (excluding freight costs) since 1963. Japan remains the world's biggest net foreign creditor. Income from its assets more than offset the trade gap, keeping its current account in surplus, equivalent to about 2% of GDP (down from 5% in 2007, see chart). That surplus, however, could also disappear within a few years. Is that good news or bad? Last year's trade deficit partly reflected some temporary factors, notably the earthquake and tsunami which disrupted production and exports. Imports were inflated by higher oil prices and larger imports of energy following the shutdown of nuclear-power plants. (The Economist)

Surplus plunges 85% in Nov. / Year-on-year fall to 138 billion yen marks lowest level since Jan. 2009

Yomiuri — 2012-01-12 23:21:48

The nation's current account surplus declined 85.5 percent in November from the same month a year earlier to 138.5 billion yen, shrinking for the ninth straight month, according to a Finance Ministry preliminary report on the balance of international payments released Thursday. The surplus was at its lowest level since January 2009, when the balance fell to minus 132.7 billion yen due to the so-called Lehman Brothers shock. The current account is the broadest measure of Japan's global trade of goods and services. (Yomiuri)

Quake victims to lose unemployment aid

Yomiuri — 2012-01-12 23:21:48

More than 4,000 people in the disaster-hit areas of Fukushima, Iwate and Miyagi prefectures will lose their unemployment benefits by the end of February, according to labor ministry estimates. The period of unemployment benefit eligibility for victims of the Great East Japan Earthquake has been extended twice, giving recipients an extra 210 days of support. But some of these recipients had their benefits expire Thursday because the government will no longer offer additional extensions. Unemployment benefits are handed out every four weeks to people who lose their job while signed up to the government's unemployment insurance system. While job-seekers, these people receive financial assistance of 50 percent to 80 percent of the average salary they earned during the previous six months before becoming unemployed. The amount varies depending on the age of the job-seeker and the period of time in which they were enrolled in unemployment insurance. (Yomiuri)

Analysis: Ageing, indebted Japan holds lessons for others

Reuters — 2012-01-12 22:42:08

An asset price bubble pops, hitting bank balance sheets and tax revenues. As growth weakens and the economy flirts with deflation, the real burden of servicing debt increases. Companies race to pay off debt, further dragging down growth. Government spending takes up the slack. Monetary policy is akin to pushing on a piece of string, so even zero interest rates have scant impact. Population decline compounds the vicious circle. That is a rough summary of Japan's plight over the past 20 years. Worryingly, it may also turn out to be the template for other mature economies, especially in Europe. "In terms of nominal GDP growth, things are playing out in a very similar way to how they did in Japan," said Albert Edwards, global strategist at French bank Societe Generale. In a presentation for investors in London, Edwards said world markets, too, were following Japan's "ice age" lead. (Reuters)