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Goodman Group Operations in Japan Are Thriving as Company’s Local Developments Are On-Schedule
Tokyo, Japan – Goodman’s undertakings in the Japanese market are all reportedly on track according to plan. The company has already completed a project this month, with two other developments set to come online very soon.
The logistics properties developed by Goodman include Goodman Obu in Nagoya, Goodman Mizue and Goodman Ichikawa in Tokyo Bay, and Goodman Business Park Chiba in Tokyo. Apart from the developments, the Goodman Japan Core Fund completed the second stage of the JPY 40 billion capital raising, which closed almost two times over-subscribed by both new and existing investors, while proceeds from the capital raising were used this year in the acquisition of Goodman Sakai. The balance will be used in the acquisition of Goodman Obu, Goodman Mizue and Goodman Ichikawa from the Goodman Japan Development Partnership.
Goodman Obu in Nagoya is a four-story, ramp up, high specification logistics facility that was completed this November. The property offers up 550,000 square feet of space, and has had considerable success in regards to the leasing process, with a number of Japanese customers expressing interest in the asset. Goodman Mizue in Tokyo Bay is a very similar project, with slightly more space, totaling 645,000 square feet of space. Completion on the four-story facility is scheduled for next month, and the property is already leased up. Also located in Tokyo Bay, Goodman Ichikawa is a 700,000 square-foot, high-specification logistics facility that is set for completion during the first half of next year. About a quarter of the available space at the project is already pre-leased.
The Goodman Business Park Chiba in Tokyo will have an end value of $1 billion across a number of buildings. The project will be built in stages in a growth area of Greater Tokyo. Stage one of the project will be dubbed Goodman Business Park Chiba East, will offer a total of around 1.3 million square feet of space, four-story ramp up, multi-customer, high specification logistics facility. Twenty-five percent of the available space is already under contract, with completion scheduled for March 2016.
Goodman Group Operations in Japan Are Thriving as Company’s Local Developments Are On-Schedule | Multi-Housing News Online
Tokyo, Japan – Goodman’s undertakings in the Japanese market are all reportedly on track according to plan. The company has already completed a project this month, with two other developments set to come online very soon.
The logistics properties developed by Goodman include Goodman Obu in Nagoya, Goodman Mizue and Goodman Ichikawa in Tokyo Bay, and Goodman Business Park Chiba in Tokyo. Apart from the developments, the Goodman Japan Core Fund completed the second stage of the JPY 40 billion capital raising, which closed almost two times over-subscribed by both new and existing investors, while proceeds from the capital raising were used this year in the acquisition of Goodman Sakai. The balance will be used in the acquisition of Goodman Obu, Goodman Mizue and Goodman Ichikawa from the Goodman Japan Development Partnership.
Goodman Obu in Nagoya is a four-story, ramp up, high specification logistics facility that was completed this November. The property offers up 550,000 square feet of space, and has had considerable success in regards to the leasing process, with a number of Japanese customers expressing interest in the asset. Goodman Mizue in Tokyo Bay is a very similar project, with slightly more space, totaling 645,000 square feet of space. Completion on the four-story facility is scheduled for next month, and the property is already leased up. Also located in Tokyo Bay, Goodman Ichikawa is a 700,000 square-foot, high-specification logistics facility that is set for completion during the first half of next year. About a quarter of the available space at the project is already pre-leased.
The Goodman Business Park Chiba in Tokyo will have an end value of $1 billion across a number of buildings. The project will be built in stages in a growth area of Greater Tokyo. Stage one of the project will be dubbed Goodman Business Park Chiba East, will offer a total of around 1.3 million square feet of space, four-story ramp up, multi-customer, high specification logistics facility. Twenty-five percent of the available space is already under contract, with completion scheduled for March 2016.
Goodman Group Operations in Japan Are Thriving as Company’s Local Developments Are On-Schedule | Multi-Housing News Online
GLP gives giant boost to Japan, Brazil development platforms
HONG KONG — Global Logistic Properties (GLP) has announced its second giant investment this week, pouring $138 million into a Japanese joint venture development that will be matched by long term partner Canada Pension Plan Investment Board.
The expansion of GLP Japan Development Venture, a 50:50 JV with the pension fund, will increase the investment to $2.2 billion that will be used to develop modern logistics facilities in Japan.
Earlier this week, GLP announced the expansion of its Brazilian fund management platform by 68 percent, injecting the portfolio of BA Properties acquired in March and growing the fund from $1.5 billion to $3.7 billion. The platform comprises GLP Brazil Income Partners II (GLP BIP II) and the expansion of GLP Brazil Development Partners I (GLP BDP I).
GLP BIP II comprises approximately 9.6 million square feet of high-quality logistics assets mainly located in São Paulo and Rio de Janeiro. GLP will retain a 40 percent stake in GLP BIP II, with Canada Pension Plan Investment Board and a leading North American institutional investor each taking approximately a 30 percent stake.
GLP BDP I has been expanded by 36 percent to $1.5 billion and the additional capital will be used to acquire a strategically-positioned land parcel in Rio de Janeiro, comprising 3.8 million square feet of buildable area. The project will be developed in phases, with the first phase expected to begin in 2017, with the total development cost, at today’s prices, estimated to be $257 million. GLP owns 40 percent of GLP BDP I, with the pension fund and GIC holding 39.6 percent and 20.4 percent respectively.
Mauro Dias, president of GLP Brazil, said the company capitalized on market conditions to acquire GLP BDP I’s first development site in Rio de Janeiro, one of Brazil’s best logistics markets.
“Our local team did an excellent job in securing an exceptional site of considerable scale. We believe Brazil will return to a long-term growth trajectory and look forward to building a sustainable, long-term business there,” he said.
In Japan, the GLP Japan Development Venture was established in September 2011 and is committed to projects in various stages of development that are currently valued at $1.4 billion. Following this week’s announcements, GLP’s global fund management platform now has $13.2 billion of assets under management.
Yoshiyuki Chosa, president of GLP Japan, said the deal would strengthen the long term partnership with Canada Pension Plan Investment Board.
“GLP Japan Development Venture has consistently outperformed over the past three years with leasing progressing ahead of schedule and achieved rents higher than budgeted,” he said in a statement.
In the second quarter, GLP began development of GLP Soja II, a 840,000 square feet multi-tenant logistics facility in Okayama prefecture, Western Japan. The total development cost is estimated to be $88 million.
http://www.joc.com/international-lo...an-brazil-development-platforms_20141028.html
HONG KONG — Global Logistic Properties (GLP) has announced its second giant investment this week, pouring $138 million into a Japanese joint venture development that will be matched by long term partner Canada Pension Plan Investment Board.
The expansion of GLP Japan Development Venture, a 50:50 JV with the pension fund, will increase the investment to $2.2 billion that will be used to develop modern logistics facilities in Japan.
Earlier this week, GLP announced the expansion of its Brazilian fund management platform by 68 percent, injecting the portfolio of BA Properties acquired in March and growing the fund from $1.5 billion to $3.7 billion. The platform comprises GLP Brazil Income Partners II (GLP BIP II) and the expansion of GLP Brazil Development Partners I (GLP BDP I).
GLP BIP II comprises approximately 9.6 million square feet of high-quality logistics assets mainly located in São Paulo and Rio de Janeiro. GLP will retain a 40 percent stake in GLP BIP II, with Canada Pension Plan Investment Board and a leading North American institutional investor each taking approximately a 30 percent stake.
GLP BDP I has been expanded by 36 percent to $1.5 billion and the additional capital will be used to acquire a strategically-positioned land parcel in Rio de Janeiro, comprising 3.8 million square feet of buildable area. The project will be developed in phases, with the first phase expected to begin in 2017, with the total development cost, at today’s prices, estimated to be $257 million. GLP owns 40 percent of GLP BDP I, with the pension fund and GIC holding 39.6 percent and 20.4 percent respectively.
Mauro Dias, president of GLP Brazil, said the company capitalized on market conditions to acquire GLP BDP I’s first development site in Rio de Janeiro, one of Brazil’s best logistics markets.
“Our local team did an excellent job in securing an exceptional site of considerable scale. We believe Brazil will return to a long-term growth trajectory and look forward to building a sustainable, long-term business there,” he said.
In Japan, the GLP Japan Development Venture was established in September 2011 and is committed to projects in various stages of development that are currently valued at $1.4 billion. Following this week’s announcements, GLP’s global fund management platform now has $13.2 billion of assets under management.
Yoshiyuki Chosa, president of GLP Japan, said the deal would strengthen the long term partnership with Canada Pension Plan Investment Board.
“GLP Japan Development Venture has consistently outperformed over the past three years with leasing progressing ahead of schedule and achieved rents higher than budgeted,” he said in a statement.
In the second quarter, GLP began development of GLP Soja II, a 840,000 square feet multi-tenant logistics facility in Okayama prefecture, Western Japan. The total development cost is estimated to be $88 million.
http://www.joc.com/international-lo...an-brazil-development-platforms_20141028.html
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Japan's third-quarter recession seen milder than feared as capex grows
*still not too good, but any lessening of economic woes is positive in my book.
Japan's fall into recession between July-September could turn out to be less severe than feared, with new capital expenditure figures out on Monday suggesting revisions will put the third quarter in a slightly more positive light.
The 5.5 percent year-on-year rise in capital expenditure over the third quarter reported on Monday followed a 3.0 percent annual increase in April-June, which could ease concerns about recovery from a sales tax increase earlier this year.
"The revised data will show a smaller contraction in GDP that could be close to zero," said Hiroaki Muto, senior economist at Sumitomo Mitsui Asset Management Co.
"Other data on consumer spending, factory output and business investment show these three factors will drive future growth."
Japan's economy still contracted in the third quarter, following a decline in the second quarter and confirming a recession. But rising business investment means the contraction was not as severe as initially estimated.
Compared with the previous quarter, capital spending excluding software rose a seasonally adjusted 3.1 percent, versus a 1.5 percent decline in April-June in an encouraging sign of vigorous business investment.
Preliminary data showed the economy contracted an annualized 1.6 percent in July-September, confirming Japan had entered its third recession in the past four years as a sales tax hike in April hurt consumer spending and business investment.
Revised gross domestic product data is due on Dec. 8. The finance ministry data released on Monday is used to re-calculate the capital expenditure component of GDP.
In preliminary GDP data, capital expenditure shrank 0.2 percent, but this could be revised up to show a 1 percent gain, according to Hidenobu Tokuda, senior economist at Mizuho Research Institute.
The recession set the stage for Prime Minister Shinzo Abe to delay a second sales tax hike that was originally scheduled for next year.
Pushing back the tax hike has eased concerns about consumer spending, but the recession has also shown that Abe's policies have not been enough to strengthen the underlying economy - even after some two years in office.
Economists expect Japan to resume growth in the current quarter as consumer spending, and Monday's strong capital expenditure, show that growth will become more broad-based.
From Japan's third-quarter recession seen milder than feared as capex grows | Reuters
*still not too good, but any lessening of economic woes is positive in my book.
Japan's fall into recession between July-September could turn out to be less severe than feared, with new capital expenditure figures out on Monday suggesting revisions will put the third quarter in a slightly more positive light.
The 5.5 percent year-on-year rise in capital expenditure over the third quarter reported on Monday followed a 3.0 percent annual increase in April-June, which could ease concerns about recovery from a sales tax increase earlier this year.
"The revised data will show a smaller contraction in GDP that could be close to zero," said Hiroaki Muto, senior economist at Sumitomo Mitsui Asset Management Co.
"Other data on consumer spending, factory output and business investment show these three factors will drive future growth."
Japan's economy still contracted in the third quarter, following a decline in the second quarter and confirming a recession. But rising business investment means the contraction was not as severe as initially estimated.
Compared with the previous quarter, capital spending excluding software rose a seasonally adjusted 3.1 percent, versus a 1.5 percent decline in April-June in an encouraging sign of vigorous business investment.
Preliminary data showed the economy contracted an annualized 1.6 percent in July-September, confirming Japan had entered its third recession in the past four years as a sales tax hike in April hurt consumer spending and business investment.
Revised gross domestic product data is due on Dec. 8. The finance ministry data released on Monday is used to re-calculate the capital expenditure component of GDP.
In preliminary GDP data, capital expenditure shrank 0.2 percent, but this could be revised up to show a 1 percent gain, according to Hidenobu Tokuda, senior economist at Mizuho Research Institute.
The recession set the stage for Prime Minister Shinzo Abe to delay a second sales tax hike that was originally scheduled for next year.
Pushing back the tax hike has eased concerns about consumer spending, but the recession has also shown that Abe's policies have not been enough to strengthen the underlying economy - even after some two years in office.
Economists expect Japan to resume growth in the current quarter as consumer spending, and Monday's strong capital expenditure, show that growth will become more broad-based.
From Japan's third-quarter recession seen milder than feared as capex grows | Reuters
Japan, China stocks lead Asia gains on yen, data
HONG KONG (AP) — Japanese and Chinese shares led Asian markets higher Wednesday as the Nikkei touched a fresh high on the yen's slump and Chinese business surveys offered some optimism about the world's No. 2 economy.
KEEPING SCORE: Japan's benchmark Nikkei 225 index added 1 percent to 17,845.91, after rising as high as 17,881.76 earlier, the highest level since mid-2007. South Korea's Kospi edged up 0.2 percent to 1,969.27 and Hong Kong's Hang Seng rose 0.6 percent to 23,799.30 while the Shanghai Composite Index in mainland China gained 0.9 percent to 2,789.96. Australia's S&P/ASX 200 rose 0.4 percent to 5,302.20.
YEN SLUMP: The Nikkei's rise comes as the Japanese currency falls to its lowest in seven years, with the latest catalyst coming in the form of a downgrade by ratings service Moody's to the government's credit rating. The dollar strengthened to 119.33 yen from 119.22 yen in late trading Tuesday. The weakening yen, driven by the government's monetary easing aimed at stimulating the economy, is good for the nation's big exporters such as Toyota and Canon because it makes their cars and electronics cheaper overseas.
CHINA SERVICES: Shanghai shares jumped after two monthly surveys showed that activity in the No. 2 economy's service industries edged higher. The results of an official purchasing managers' index and a similar one by HSBC, which showed that new orders rose at their fastest in two and half years, were encouraging signs after a recent string of downbeat data.
WALL STREET: The Dow Jones industrial average gained 0.6 percent to a record close of 17,879.55. The Standard & Poor's 500 rose 0.6 percent to close at 2,066.55. The Dow Jones industrial average gained 0.6 percent to 17,879.55, while the Nasdaq composite rose 0.6 percent to 4,755.81.
ENERGY: Oil prices rebounded, with benchmark U.S. crude rising 79 cents to $67.67 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $2.12 to settle at $66.88 a barrel on Tuesday. Brent crude, used to price internationally, rose 62 cents to $71.16 on the ICE Exchange in London.
Japan, China stocks lead Asia gains on yen, data : Business
Japan’s Otsuka to Buy Avanir Pharmaceuticals
With $3.5 Billion U.S. Deal, Abilify Maker Is Latest Japanese Drug Firm to Push Abroad
TOKYO—Otsuka Pharmaceutical Co. agreed to buy Avanir Pharmaceuticals Inc. of the U.S. for $3.5 billion, the latest large deal by a Japanese drug maker looking to expand overseas.
The deal gives Otsuka, maker of the schizophrenia and depression drug Abilify, access to more treatments for central-nervous-system diseases. California-based Avanir sells Nuedexta, a treatment for a condition known as pseudobulbar affect that causes sudden and involuntary outbursts in patients with neurological diseases such as amyotrophic lateral sclerosis.
Otsuka Pharmaceutical, part of Otsuka Holdings Co. , said it would pay $17 a share in cash for Nasdaq-traded Avanir. The deal is the largest purchase by Otsuka Holdings, which listed its shares in an initial public offering in Tokyo in 2010, giving it more resources for acquisitions. Like other Japanese pharmaceutical companies, Otsuka has been looking abroad as growth slows in the domestic market, the second-largest after the U.S.
Otsuka Holdings President Tatsuo Higuchi said at a news conference that Avanir’s strengths in neurological diseases would complement Otsuka’s experience in the area of mental illnesses. “We’ll try to maximize the integration effect,” he said.
Avanir Chief Executive Keith Katkin said in a written statement, “Together, our organizations will be able to more rapidly develop and commercialize needed medications.” Avanir, which was founded in 1988 as Lidak Pharmaceuticals, is conducting trials of medicines for depression, migraine headaches and other neurological diseases.
Some pharmaceutical companies have been reducing their involvement in those areas because of the large number of generic drugs available and the long period required for clinical trials and regulatory approval. But Otsuka is trying to build on its existing business and find new products to make up for Abilify, whose patent is set to expire in 2015 according to the company.
Otsuka has been bulking up in recent years and bought U.S. cancer-drug maker Astex Pharmaceuticals Inc. last year for about $886 million.
“From our experience, we value creativity which can be generated from cultural diversity and different ways of thinking,” Mr. Higuchi said. “I learned it from the late Chairman Otsuka,” he added, a reference to longtime executive Akihiko Otsuka, who died last Friday at the age of 77. Mr. Otsuka, a member of the founding family, was involved in the development of the company’s food and beverage arm, helping to create the Pocari Sweat sports drink and Calorie Mate energy bar.
Mr. Higuchi said the yen’s recent fall didn’t affect Otsuka’s decision-making on overseas acquisitions. “We’ll make a move when it should be done,” Mr. Higuchi said, adding that Otsuka would use funds it holds in dollars for part of the purchase.
The acquisition of Avanir is the latest among sizable overseas deals by Japanese pharmaceutical companies, which have included Takeda Pharmaceutical Co. ’s purchases of Millennium Pharmaceuticals and Nycomed, Astellas Pharma Inc. ’s acquisition of OSI Pharmaceuticals and Daiichi Sankyo Co. ’s deal for a controlling stake in Ranbaxy Laboratories Ltd.
The deals have given the Japanese companies broader access to overseas markets, but some have run into trouble. Daiichi sold its Ranbaxy stake this year, six years after the acquisition, following a series of regulatory problems. Takeda has faced questions from shareholders over its integration of Nycomed and Millennium. The company recently brought in a French executive as president and has said it would seek to break down internal silos.
http://online.wsj.com/articles/japans-otsuka-to-buy-drug-maker-avanir-in-3-5-billion-deal-1417513161
Japan’s nuclear restart to boost Australian uranium industry
The Minerals Council of Australia says Australia’s uranium industry is set for a boost as Japan moves to restart nuclear reactors for the first time since the Fukushima meltdown.
Two reactors at Japan’s Sendai nuclear plant in the south west of the country are due to restart next year after receiving approval from local governor Yuichiro Ito.
This is the first time a reactor will restart since an earthquake triggered a tsunami in 2011, causing a meltdown at the Fukushima facility.
All of Japan’s 48 nuclear plants were shut down in response, but Prime Minister Shinzo Abe has been pushing for their reopening as the cost of importing oil and gas hurts the Japanese economy, BBC reported.
Before the meltdown nuclear energy produced around 30 per cent of Japan’s power.
"I have decided that it is unavoidable to restart the No. 1 and No. 2 Sendai nuclear reactors," Ito said.
"I have said that assuring safety is a prerequisite and that the government must ensure safety and publicly explain it thoroughly to residents."
Executive director for uranium at the Minerals Council of Australia Daniel Zavattiero said the move was good news for the local uranium industry and its 4000 workers.
“Japan has been a major export destination for Australian uranium and its re-entry to the market will boost investment and development of the Australian industry,” Zavattiero said.
“Japan’s decision also sends a strong signal affirming nuclear’s role in meeting the world’s growing demand for energy.”
The price of uranium collapsed after the 2011 disaster and had been hovering at around $36.75 a pound, forcing many miners to shut their operations.
The announcement of the nuclear restart prompted a 14 per cent rise in price to $42 a pound last week.
However analysts say a price of around $60 a pound is required for uranium producers to reopen their mines.
Japan’s nuclear restart to boost Australian uranium industry | Mining Australia
Japan's Nikkei marks sixth day of gains
Japanese shares saw their sixth consecutive day of gains on Friday, marking their longest winning streak since August.
The benchmark Nikkei 225 closed up 0.2% to 17,920.45 points, which was its best finish since July 2007.
The dollar also rose past the 120-yen mark for the first time in seven-and-a-half years.
The rest of Asia traded mixed after the European Central Bank (ECB) decided not to expand its stimulus programme.
In a meeting on Thursday, the ECB put off a possible full quantitative easing programmeuntil early next year.
Investors also kept a close an eye on US jobs data due later in the day for signs of growth in the world's largest economy.
In China, Hong Kong's Hang Seng index rose 0.9% to 24,035.98, adding to the previous session's big gains, while the Shanghai Composite was down 0.3% at 2,891.4.
In Australia, the benchmark S&P/ASX 200 closed down 0.6% at 5,335.3, dragged lower by mining and energy firms.
Shares of mining services firm Bradken jumped more than 36% after receiving a 872m Australian dollar ($731m; £467m) takeover approach from buyout firms Pacific Equity Partners and Bain Capital.
South Korean shares ended flat after the country's trade ministry saying that exports were likely to grow 2.8% in 2014 to a record $575bn (£367bn).
The ministry forecast that South Korea would post a trade surplus of about $45bn this year, also the largest on record.
The benchmark Kospi index finished at 1,986.62.
BBC News - Japan's Nikkei marks sixth day of gains
HONG KONG (AP) — Japanese and Chinese shares led Asian markets higher Wednesday as the Nikkei touched a fresh high on the yen's slump and Chinese business surveys offered some optimism about the world's No. 2 economy.
KEEPING SCORE: Japan's benchmark Nikkei 225 index added 1 percent to 17,845.91, after rising as high as 17,881.76 earlier, the highest level since mid-2007. South Korea's Kospi edged up 0.2 percent to 1,969.27 and Hong Kong's Hang Seng rose 0.6 percent to 23,799.30 while the Shanghai Composite Index in mainland China gained 0.9 percent to 2,789.96. Australia's S&P/ASX 200 rose 0.4 percent to 5,302.20.
YEN SLUMP: The Nikkei's rise comes as the Japanese currency falls to its lowest in seven years, with the latest catalyst coming in the form of a downgrade by ratings service Moody's to the government's credit rating. The dollar strengthened to 119.33 yen from 119.22 yen in late trading Tuesday. The weakening yen, driven by the government's monetary easing aimed at stimulating the economy, is good for the nation's big exporters such as Toyota and Canon because it makes their cars and electronics cheaper overseas.
CHINA SERVICES: Shanghai shares jumped after two monthly surveys showed that activity in the No. 2 economy's service industries edged higher. The results of an official purchasing managers' index and a similar one by HSBC, which showed that new orders rose at their fastest in two and half years, were encouraging signs after a recent string of downbeat data.
WALL STREET: The Dow Jones industrial average gained 0.6 percent to a record close of 17,879.55. The Standard & Poor's 500 rose 0.6 percent to close at 2,066.55. The Dow Jones industrial average gained 0.6 percent to 17,879.55, while the Nasdaq composite rose 0.6 percent to 4,755.81.
ENERGY: Oil prices rebounded, with benchmark U.S. crude rising 79 cents to $67.67 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $2.12 to settle at $66.88 a barrel on Tuesday. Brent crude, used to price internationally, rose 62 cents to $71.16 on the ICE Exchange in London.
Japan, China stocks lead Asia gains on yen, data : Business
Japan’s Otsuka to Buy Avanir Pharmaceuticals
With $3.5 Billion U.S. Deal, Abilify Maker Is Latest Japanese Drug Firm to Push Abroad
TOKYO—Otsuka Pharmaceutical Co. agreed to buy Avanir Pharmaceuticals Inc. of the U.S. for $3.5 billion, the latest large deal by a Japanese drug maker looking to expand overseas.
The deal gives Otsuka, maker of the schizophrenia and depression drug Abilify, access to more treatments for central-nervous-system diseases. California-based Avanir sells Nuedexta, a treatment for a condition known as pseudobulbar affect that causes sudden and involuntary outbursts in patients with neurological diseases such as amyotrophic lateral sclerosis.
Otsuka Pharmaceutical, part of Otsuka Holdings Co. , said it would pay $17 a share in cash for Nasdaq-traded Avanir. The deal is the largest purchase by Otsuka Holdings, which listed its shares in an initial public offering in Tokyo in 2010, giving it more resources for acquisitions. Like other Japanese pharmaceutical companies, Otsuka has been looking abroad as growth slows in the domestic market, the second-largest after the U.S.
Otsuka Holdings President Tatsuo Higuchi said at a news conference that Avanir’s strengths in neurological diseases would complement Otsuka’s experience in the area of mental illnesses. “We’ll try to maximize the integration effect,” he said.
Avanir Chief Executive Keith Katkin said in a written statement, “Together, our organizations will be able to more rapidly develop and commercialize needed medications.” Avanir, which was founded in 1988 as Lidak Pharmaceuticals, is conducting trials of medicines for depression, migraine headaches and other neurological diseases.
Some pharmaceutical companies have been reducing their involvement in those areas because of the large number of generic drugs available and the long period required for clinical trials and regulatory approval. But Otsuka is trying to build on its existing business and find new products to make up for Abilify, whose patent is set to expire in 2015 according to the company.
Otsuka has been bulking up in recent years and bought U.S. cancer-drug maker Astex Pharmaceuticals Inc. last year for about $886 million.
“From our experience, we value creativity which can be generated from cultural diversity and different ways of thinking,” Mr. Higuchi said. “I learned it from the late Chairman Otsuka,” he added, a reference to longtime executive Akihiko Otsuka, who died last Friday at the age of 77. Mr. Otsuka, a member of the founding family, was involved in the development of the company’s food and beverage arm, helping to create the Pocari Sweat sports drink and Calorie Mate energy bar.
Mr. Higuchi said the yen’s recent fall didn’t affect Otsuka’s decision-making on overseas acquisitions. “We’ll make a move when it should be done,” Mr. Higuchi said, adding that Otsuka would use funds it holds in dollars for part of the purchase.
The acquisition of Avanir is the latest among sizable overseas deals by Japanese pharmaceutical companies, which have included Takeda Pharmaceutical Co. ’s purchases of Millennium Pharmaceuticals and Nycomed, Astellas Pharma Inc. ’s acquisition of OSI Pharmaceuticals and Daiichi Sankyo Co. ’s deal for a controlling stake in Ranbaxy Laboratories Ltd.
The deals have given the Japanese companies broader access to overseas markets, but some have run into trouble. Daiichi sold its Ranbaxy stake this year, six years after the acquisition, following a series of regulatory problems. Takeda has faced questions from shareholders over its integration of Nycomed and Millennium. The company recently brought in a French executive as president and has said it would seek to break down internal silos.
http://online.wsj.com/articles/japans-otsuka-to-buy-drug-maker-avanir-in-3-5-billion-deal-1417513161
Japan’s nuclear restart to boost Australian uranium industry
The Minerals Council of Australia says Australia’s uranium industry is set for a boost as Japan moves to restart nuclear reactors for the first time since the Fukushima meltdown.
Two reactors at Japan’s Sendai nuclear plant in the south west of the country are due to restart next year after receiving approval from local governor Yuichiro Ito.
This is the first time a reactor will restart since an earthquake triggered a tsunami in 2011, causing a meltdown at the Fukushima facility.
All of Japan’s 48 nuclear plants were shut down in response, but Prime Minister Shinzo Abe has been pushing for their reopening as the cost of importing oil and gas hurts the Japanese economy, BBC reported.
Before the meltdown nuclear energy produced around 30 per cent of Japan’s power.
"I have decided that it is unavoidable to restart the No. 1 and No. 2 Sendai nuclear reactors," Ito said.
"I have said that assuring safety is a prerequisite and that the government must ensure safety and publicly explain it thoroughly to residents."
Executive director for uranium at the Minerals Council of Australia Daniel Zavattiero said the move was good news for the local uranium industry and its 4000 workers.
“Japan has been a major export destination for Australian uranium and its re-entry to the market will boost investment and development of the Australian industry,” Zavattiero said.
“Japan’s decision also sends a strong signal affirming nuclear’s role in meeting the world’s growing demand for energy.”
The price of uranium collapsed after the 2011 disaster and had been hovering at around $36.75 a pound, forcing many miners to shut their operations.
The announcement of the nuclear restart prompted a 14 per cent rise in price to $42 a pound last week.
However analysts say a price of around $60 a pound is required for uranium producers to reopen their mines.
Japan’s nuclear restart to boost Australian uranium industry | Mining Australia
Japan's Nikkei marks sixth day of gains
Japanese shares saw their sixth consecutive day of gains on Friday, marking their longest winning streak since August.
The benchmark Nikkei 225 closed up 0.2% to 17,920.45 points, which was its best finish since July 2007.
The dollar also rose past the 120-yen mark for the first time in seven-and-a-half years.
The rest of Asia traded mixed after the European Central Bank (ECB) decided not to expand its stimulus programme.
In a meeting on Thursday, the ECB put off a possible full quantitative easing programmeuntil early next year.
Investors also kept a close an eye on US jobs data due later in the day for signs of growth in the world's largest economy.
In China, Hong Kong's Hang Seng index rose 0.9% to 24,035.98, adding to the previous session's big gains, while the Shanghai Composite was down 0.3% at 2,891.4.
In Australia, the benchmark S&P/ASX 200 closed down 0.6% at 5,335.3, dragged lower by mining and energy firms.
Shares of mining services firm Bradken jumped more than 36% after receiving a 872m Australian dollar ($731m; £467m) takeover approach from buyout firms Pacific Equity Partners and Bain Capital.
South Korean shares ended flat after the country's trade ministry saying that exports were likely to grow 2.8% in 2014 to a record $575bn (£367bn).
The ministry forecast that South Korea would post a trade surplus of about $45bn this year, also the largest on record.
The benchmark Kospi index finished at 1,986.62.
BBC News - Japan's Nikkei marks sixth day of gains
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BBC News - Japan's third quarter recession deeper than estimated
Japan's economy shrank more than initially estimated in the third quarter of 2014, according to revised gross domestic product (GDP) figures.
The economy contracted by 1.9% in annual terms from July to September, well above a preliminary reading of 1.6%.
It also shrank 0.5% on a quarterly basis, compared with an initial estimate of 0.4%, data showed.
A big fall in business spending plunged the economy into a deeper recession.
The revised figures, which come just days before Japan's national elections, showed that business spending dipped by 0.4% from the previous quarter, instead of the 0.2% estimated in the preliminary reading.
In recession
The world's third largest economy unexpectedly fell into a technical recession after shrinking for the second consecutive quarter in July to September.
It had contracted 7.3% in the second quarter, which was the biggest fall since the March 2011 earthquake and tsunami.
An increase in the country's sales tax, which was first raised in April from 5% to 8%, had hit growth in the second quarter and still appeared to be having an impact on the economy.
The dire data had led Prime Minister Shinzo Abe to call a widely-anticipated snap election last month, to seek a mandate to delay an increase in the tax to 10%, scheduled for 2015.
The tax increase was legislated by the previous government in 2012 to curb Japan's huge public debt, which is the highest among developed nations.
Adding to the downbeat data, a Reuters poll on Monday showed that confidence among Japanese manufacturers fell in December and is expected to deteriorate further.
The Reuters Tankan sentiment index for manufacturers fell to 10 in December from 13 in November, with automakers taking a hit.
Manufacturers expect a further decline to 7 in March.
Japan's economy shrank more than initially estimated in the third quarter of 2014, according to revised gross domestic product (GDP) figures.
The economy contracted by 1.9% in annual terms from July to September, well above a preliminary reading of 1.6%.
It also shrank 0.5% on a quarterly basis, compared with an initial estimate of 0.4%, data showed.
A big fall in business spending plunged the economy into a deeper recession.
The revised figures, which come just days before Japan's national elections, showed that business spending dipped by 0.4% from the previous quarter, instead of the 0.2% estimated in the preliminary reading.
In recession
The world's third largest economy unexpectedly fell into a technical recession after shrinking for the second consecutive quarter in July to September.
It had contracted 7.3% in the second quarter, which was the biggest fall since the March 2011 earthquake and tsunami.
An increase in the country's sales tax, which was first raised in April from 5% to 8%, had hit growth in the second quarter and still appeared to be having an impact on the economy.
The dire data had led Prime Minister Shinzo Abe to call a widely-anticipated snap election last month, to seek a mandate to delay an increase in the tax to 10%, scheduled for 2015.
The tax increase was legislated by the previous government in 2012 to curb Japan's huge public debt, which is the highest among developed nations.
Adding to the downbeat data, a Reuters poll on Monday showed that confidence among Japanese manufacturers fell in December and is expected to deteriorate further.
The Reuters Tankan sentiment index for manufacturers fell to 10 in December from 13 in November, with automakers taking a hit.
Manufacturers expect a further decline to 7 in March.
Japan's Economy Suffers Misguided Pundits, Not Export Competition And Low Birthrates
As is well known now, Japan’s economy recent entered into a “recession” of the fraudulent Gross Domestic Product (GDP) kind. Importantly, the downturn proclaimed by the astrologists who populate economics, along with their confused Keynesian enablers in the press, isn’t really a recession.
As Intermarket Forecasting’s Richard Salsman has pointed out, the Japanese “recession” merely proves what is well known intuitively: governments can’t create economic growth as much as they can reschedule it. GDP is a Keynesian creation of the first order, and as it’s focused on consumption, it’s no surprise that a technical recession has taken shape.
With Japanese legislators having telegraphed a 3 percent rise in the country’s consumption tax, Japanese consumers merely pushed up their consumption ahead of the increase. This rescheduling of purchases increased “growth” prior to the tax hike, and then it decreased the consumption that confused Keynesians view as growth once the tax was implemented. Japan’s underlying economic fundamentals only changed insofar as the worthless number that is GDP missed the obvious rescheduling of purchasing by Japanese consumers.
Despite this, Japan’s alleged decline very predictably attracted the attention of economic pundits eager to apply their astrology to the infinite decisions made by millions of Japanese every millisecond of every day. They presume based on a change in the artificial number that is GDP to understand what ails one of the richest economies in the world.
Notable here is that Bloomberg View columnist Megan McArdle recently took to the airwaves to explain to her flock that “better policy can’t save Japan.” According to McArdle, increased competition from other exporters along with demographics that resemble that of “an assisted living facility” render policy toothless. You can’t make this up.
In McArdle’s defense, the notion of increased global production (exports) weakening growth prospects has been confusing pundits long before she picked up a pen. What she and the others on whose shoulders she stands presume isn’t something to pay much mind to. If anything, increased global production (meaning once again, “exports”) represents only good things when applied to Japan, along with all other countries in what is a “closed” world economy.
Seemingly missed by McArdle is the simple economic truth that we produce in order to consume. Or better yet for those sold on the economically bankrupt notion of “export led growth,” to export is to import. By definition. To believe otherwise as McArdle apparently does is to presume that still impoverished countries like China are inhabited by individuals focused on working feverishly to export without any material enhancement in their individual standard of living in return.
The problem with such a belief is that it’s discredited by observable realities. One doesn’t need to visit China to know that its cities are increasingly populated with gleaming shops selling goods from producers around the world, including from the U.S. and Japan. And while the Chinese used to suffer living conditions that would make the poorest of Americans shudder, it’s increasingly the case that apartments and houses are going up everywhere in order to fulfill the demands of Chinese seeking the “import” reward of higher living standards in return for their exports.
Applied to Japan, while competition in a freer global economy is logically increasing, that it is also signals growing markets for Japanese producers to sell to. To believe otherwise is to once again believe that the individuals who inhabit once-poor countries are producing for the world without any design on exchanging the fruits of their labor for what others have produced.
But for fun, let’s assume for a moment that what McArdle seemingly imagines about producers exporting without any demands in return is true. If so, as in if every formerly poor individual from China, Poland and Brazil (to name but three countries) is literally banking every cent earned, such an action would in no way subtract from demand. Banks don’t pay for deposits only to sit on them, rather they pay for deposits so that they can lend what they’ve borrowed to others with near-term consumption desires, and who are willing to pay a rate of interest to consume now. In short, no act of saving from Chinese “exporters” subtracts from local and/or global demand. Saving is merely a shift of consumption or investment from one individual to others.
Looking at Japan again vis-à-vis the world, can McArdle really believe that its citizens would be better off economically if the rest of Asia and the world were defined by layabout countries populated by individuals doing nothing? No doubt the competition would be less, but so as a rule would be demand for Japanese exports. Unless McArdle has created a new law of economics previously unheard of, the individuals who comprise any economy can’t consume without producing first. Increased global production clearly signals increased demand for goods, including those created by Japanese producers.
Considering Japan vis-à-vis the U.S., did its post-World War II rise weaken the U.S. economic outlook for the Japanese creating cars and televisions that Americans have often chosen over U.S. manufacture of same? Obviously not. Japanese heft in the carmaking space has freed up Americans to enter into all manner of higher-margin industries. Ricardo called this “comparative advantage.” Considering televisions, Japanese producers have no doubt erased many American producers, but those TVs made by the Japanese have greatly enhanced the ability of American entertainment conglomerates to broadcast their plenty around the world.
Global trade and the competition that it fosters isn’t economy-sapping war as McArdle’s commentary presumes, rather it’s the happy process whereby everyone raises their game, not to mention that it migrates individual producers into forms of industry most suited to their skills, and for doing so increases their profit margins. We’ve seen this reveal itself beautifully in the U.S., and Japan is no different. Trade is good. Always.
Speaking of war, it’s no major insight to proclaim that World War II represented a demographic disaster for Japan. Two of its cities were wrecked by nuclear bombs, many more were reduced to rubble, but most tragic of all, Japan lost a generation or two of its best and brightest individuals to needless “competition” of the killing kind.
Yet despite this demographic tragedy that renders the musings of the economic commentariat about “rates of child replacement” microscopic by comparison, Japan’s economy soared after the war. Thanks to a stable yen made stable by its peg to the dollar, along with the fact that Japanese legislators made annual tax cuts the norm post-war, Japan’s economy took off, so much so that within a few decades it was one of the richest countries in the world.
If Japan could rebound substantially from a true demographic implosion that war is the picture definition of, the idea that its economy won’t be able to grow going forward thanks to lower birthrates that captivate McArdle and other conservatives is not something that readers should take seriously. “Low birthrates” are assuredly a non-problem that conservatives oddly focus on in much the same way that “global warming’s” alleged horrors are the obsession of the left.
Economic freedom and good policy trump rates of birth by many miles any day of the week, but perhaps the bigger reason why they’re irrelevant stares McArdle in the face every day that she fires up her computer in order to write her commentary. It is thanks to the internet that McArdle can doubtless claim readers not just in the U.S., but around the world. That McArdle can reach the world with her musings brings with it wildly positive economic implications for those who don’t earn a living with the proverbial pen.
Indeed, as evidenced by the rise of Internet concepts along the lines of Amazon.com, Alibaba.com and Uber, technological advances mean that entrepreneurs can increasingly sell to what is a global market; the latter made global by global production that has tautologically increased global demand for goods and services.
And what if a future Jeff Bezos of Japan lacks computer programmers to divine his entrepreneurial idea due to the Japanese not procreating enough? That’s no trouble either. Thanks to the same technology that has rendered Amazon a global brand, entrepreneurs can hire and work alongside in the virtual sense programmers sourced by companies such as ODesk that are in the business of hiring those skillful with the computer everywhere from Spokane to Shanghai.
To put it very plainly, Bezos could start Amazon in an “assisted living facility” today so accessible is global talent with the click of a mouse. Notable there is that Bezos started Amazon in Seattle, WA, a city well known to have suffered a demographic drain in the ‘70s so great that a billboard was erected near SeaTac airport which said “Will the last one to leave Seattle please turn the lights off?” Seattle wasn’t revived by rising birthrates, rather its rebirth was a function of two natives (Bill Gates and Paul Allen) making it Microsoft’s global headquarters. Birthrates don’t drive growth as McArdle presumes, but talent and economic freedom do.
In that case, and contrary to what McArdle believes, better policy can save Japan. Japan’s relative weakness today isn’t a function of competition that always and everywhere leads the productive to higher-margin pursuits, nor is it caused by irrelevant rates of birth. What ails Japan is what ails much of the world at present: too many politicians foisting too much bad medicine, including central bank allocation of limited credit (quantitative easing), on the individuals who comprise the country’s economy.
The answer to Japan’s troubles is quite simple, and it’s all about policy. Reduced government spending, lower taxes, a stable yen and a quiet Bank of Japan would free up the productive who power economies forward. What worked post-war will work again, and it will because economic growth is simple, and always results from a reduction of the barriers to production erected by governments. The shame is that the political class and the economic commentariat don’t understand what is so basic. Here’s hoping Japan’s voters soon enough tune out both. The country’s rebound will soon reveal itself if so.
Japan's Economy Suffers Misguided Pundits, Not Export Competition And Low Birthrates - Forbes
As is well known now, Japan’s economy recent entered into a “recession” of the fraudulent Gross Domestic Product (GDP) kind. Importantly, the downturn proclaimed by the astrologists who populate economics, along with their confused Keynesian enablers in the press, isn’t really a recession.
As Intermarket Forecasting’s Richard Salsman has pointed out, the Japanese “recession” merely proves what is well known intuitively: governments can’t create economic growth as much as they can reschedule it. GDP is a Keynesian creation of the first order, and as it’s focused on consumption, it’s no surprise that a technical recession has taken shape.
With Japanese legislators having telegraphed a 3 percent rise in the country’s consumption tax, Japanese consumers merely pushed up their consumption ahead of the increase. This rescheduling of purchases increased “growth” prior to the tax hike, and then it decreased the consumption that confused Keynesians view as growth once the tax was implemented. Japan’s underlying economic fundamentals only changed insofar as the worthless number that is GDP missed the obvious rescheduling of purchasing by Japanese consumers.
Despite this, Japan’s alleged decline very predictably attracted the attention of economic pundits eager to apply their astrology to the infinite decisions made by millions of Japanese every millisecond of every day. They presume based on a change in the artificial number that is GDP to understand what ails one of the richest economies in the world.
Notable here is that Bloomberg View columnist Megan McArdle recently took to the airwaves to explain to her flock that “better policy can’t save Japan.” According to McArdle, increased competition from other exporters along with demographics that resemble that of “an assisted living facility” render policy toothless. You can’t make this up.
In McArdle’s defense, the notion of increased global production (exports) weakening growth prospects has been confusing pundits long before she picked up a pen. What she and the others on whose shoulders she stands presume isn’t something to pay much mind to. If anything, increased global production (meaning once again, “exports”) represents only good things when applied to Japan, along with all other countries in what is a “closed” world economy.
Seemingly missed by McArdle is the simple economic truth that we produce in order to consume. Or better yet for those sold on the economically bankrupt notion of “export led growth,” to export is to import. By definition. To believe otherwise as McArdle apparently does is to presume that still impoverished countries like China are inhabited by individuals focused on working feverishly to export without any material enhancement in their individual standard of living in return.
The problem with such a belief is that it’s discredited by observable realities. One doesn’t need to visit China to know that its cities are increasingly populated with gleaming shops selling goods from producers around the world, including from the U.S. and Japan. And while the Chinese used to suffer living conditions that would make the poorest of Americans shudder, it’s increasingly the case that apartments and houses are going up everywhere in order to fulfill the demands of Chinese seeking the “import” reward of higher living standards in return for their exports.
Applied to Japan, while competition in a freer global economy is logically increasing, that it is also signals growing markets for Japanese producers to sell to. To believe otherwise is to once again believe that the individuals who inhabit once-poor countries are producing for the world without any design on exchanging the fruits of their labor for what others have produced.
But for fun, let’s assume for a moment that what McArdle seemingly imagines about producers exporting without any demands in return is true. If so, as in if every formerly poor individual from China, Poland and Brazil (to name but three countries) is literally banking every cent earned, such an action would in no way subtract from demand. Banks don’t pay for deposits only to sit on them, rather they pay for deposits so that they can lend what they’ve borrowed to others with near-term consumption desires, and who are willing to pay a rate of interest to consume now. In short, no act of saving from Chinese “exporters” subtracts from local and/or global demand. Saving is merely a shift of consumption or investment from one individual to others.
Looking at Japan again vis-à-vis the world, can McArdle really believe that its citizens would be better off economically if the rest of Asia and the world were defined by layabout countries populated by individuals doing nothing? No doubt the competition would be less, but so as a rule would be demand for Japanese exports. Unless McArdle has created a new law of economics previously unheard of, the individuals who comprise any economy can’t consume without producing first. Increased global production clearly signals increased demand for goods, including those created by Japanese producers.
Considering Japan vis-à-vis the U.S., did its post-World War II rise weaken the U.S. economic outlook for the Japanese creating cars and televisions that Americans have often chosen over U.S. manufacture of same? Obviously not. Japanese heft in the carmaking space has freed up Americans to enter into all manner of higher-margin industries. Ricardo called this “comparative advantage.” Considering televisions, Japanese producers have no doubt erased many American producers, but those TVs made by the Japanese have greatly enhanced the ability of American entertainment conglomerates to broadcast their plenty around the world.
Global trade and the competition that it fosters isn’t economy-sapping war as McArdle’s commentary presumes, rather it’s the happy process whereby everyone raises their game, not to mention that it migrates individual producers into forms of industry most suited to their skills, and for doing so increases their profit margins. We’ve seen this reveal itself beautifully in the U.S., and Japan is no different. Trade is good. Always.
Speaking of war, it’s no major insight to proclaim that World War II represented a demographic disaster for Japan. Two of its cities were wrecked by nuclear bombs, many more were reduced to rubble, but most tragic of all, Japan lost a generation or two of its best and brightest individuals to needless “competition” of the killing kind.
Yet despite this demographic tragedy that renders the musings of the economic commentariat about “rates of child replacement” microscopic by comparison, Japan’s economy soared after the war. Thanks to a stable yen made stable by its peg to the dollar, along with the fact that Japanese legislators made annual tax cuts the norm post-war, Japan’s economy took off, so much so that within a few decades it was one of the richest countries in the world.
If Japan could rebound substantially from a true demographic implosion that war is the picture definition of, the idea that its economy won’t be able to grow going forward thanks to lower birthrates that captivate McArdle and other conservatives is not something that readers should take seriously. “Low birthrates” are assuredly a non-problem that conservatives oddly focus on in much the same way that “global warming’s” alleged horrors are the obsession of the left.
Economic freedom and good policy trump rates of birth by many miles any day of the week, but perhaps the bigger reason why they’re irrelevant stares McArdle in the face every day that she fires up her computer in order to write her commentary. It is thanks to the internet that McArdle can doubtless claim readers not just in the U.S., but around the world. That McArdle can reach the world with her musings brings with it wildly positive economic implications for those who don’t earn a living with the proverbial pen.
Indeed, as evidenced by the rise of Internet concepts along the lines of Amazon.com, Alibaba.com and Uber, technological advances mean that entrepreneurs can increasingly sell to what is a global market; the latter made global by global production that has tautologically increased global demand for goods and services.
And what if a future Jeff Bezos of Japan lacks computer programmers to divine his entrepreneurial idea due to the Japanese not procreating enough? That’s no trouble either. Thanks to the same technology that has rendered Amazon a global brand, entrepreneurs can hire and work alongside in the virtual sense programmers sourced by companies such as ODesk that are in the business of hiring those skillful with the computer everywhere from Spokane to Shanghai.
To put it very plainly, Bezos could start Amazon in an “assisted living facility” today so accessible is global talent with the click of a mouse. Notable there is that Bezos started Amazon in Seattle, WA, a city well known to have suffered a demographic drain in the ‘70s so great that a billboard was erected near SeaTac airport which said “Will the last one to leave Seattle please turn the lights off?” Seattle wasn’t revived by rising birthrates, rather its rebirth was a function of two natives (Bill Gates and Paul Allen) making it Microsoft’s global headquarters. Birthrates don’t drive growth as McArdle presumes, but talent and economic freedom do.
In that case, and contrary to what McArdle believes, better policy can save Japan. Japan’s relative weakness today isn’t a function of competition that always and everywhere leads the productive to higher-margin pursuits, nor is it caused by irrelevant rates of birth. What ails Japan is what ails much of the world at present: too many politicians foisting too much bad medicine, including central bank allocation of limited credit (quantitative easing), on the individuals who comprise the country’s economy.
The answer to Japan’s troubles is quite simple, and it’s all about policy. Reduced government spending, lower taxes, a stable yen and a quiet Bank of Japan would free up the productive who power economies forward. What worked post-war will work again, and it will because economic growth is simple, and always results from a reduction of the barriers to production erected by governments. The shame is that the political class and the economic commentariat don’t understand what is so basic. Here’s hoping Japan’s voters soon enough tune out both. The country’s rebound will soon reveal itself if so.
Japan's Economy Suffers Misguided Pundits, Not Export Competition And Low Birthrates - Forbes
Japan government raises view on capex, output; economy in recovery albeit weakness
(Reuters) - Japan's government raised its view of business investment and factory output, but stuck to its overall economic assessment of moderate recovery despite some weakness as the economy struggles to recover from recession.
The government's monthly economic report comes days after Prime Minister Shinzo Abe's ruling coalition won snap elections, giving the premier a fresh mandate to proceed with his "Abenomics" strategy of reflationary policies.
"The Japanese economy is in a moderate recovery, while weakness can be seen in private consumption and some other areas," the Cabinet Office said in its report for December, issued on Friday.
It left the overall view unchanged for a second straight month.
The Bank of Japan offered on Friday a more upbeat view that the economy continues to recover moderately as a trend with the effect of April's sales tax hike waning as a whole.
Recent gains in industrial output have prompted the Cabinet Office to take a view that factory output is bottoming out, an official said, marking an upgrade from last month when the Cabinet Office said industrial output was declining.
Factory output unexpectedly rose for second straight month in October, suggesting firms have cut inventories of unsold goods built up after the tax hike hit consumers and led to two straight quarters of contraction through September.
The report follows the BOJ's key tankan survey that showed solid capital spending was planned by big firms in the fiscal year to March 2015. Companies have so far been slow to implement investment plans because of a murky outlook.
The Cabinet Office raised its view of business investment, saying it is largely flat after previously noting some weak spots in capital spending, although it was on a rising trend.
The Cabinet Office official expressed a cautious overall view, saying that weakness remained in the economy as a whole, including in private consumption.
The Cabinet Office described private consumption as holding firm while weakness was seen in consumer confidence which has been sliding because the weak yen drives up the cost of imports.
A tepid economic recovery challenges the plans of Abe and the BOJ to pull the world's third largest economy out of deflation and put it on a course for sustained growth led by the private sector.
Japan government raises view on capex, output; economy in recovery albeit weakness| Reuters
(Reuters) - Japan's government raised its view of business investment and factory output, but stuck to its overall economic assessment of moderate recovery despite some weakness as the economy struggles to recover from recession.
The government's monthly economic report comes days after Prime Minister Shinzo Abe's ruling coalition won snap elections, giving the premier a fresh mandate to proceed with his "Abenomics" strategy of reflationary policies.
"The Japanese economy is in a moderate recovery, while weakness can be seen in private consumption and some other areas," the Cabinet Office said in its report for December, issued on Friday.
It left the overall view unchanged for a second straight month.
The Bank of Japan offered on Friday a more upbeat view that the economy continues to recover moderately as a trend with the effect of April's sales tax hike waning as a whole.
Recent gains in industrial output have prompted the Cabinet Office to take a view that factory output is bottoming out, an official said, marking an upgrade from last month when the Cabinet Office said industrial output was declining.
Factory output unexpectedly rose for second straight month in October, suggesting firms have cut inventories of unsold goods built up after the tax hike hit consumers and led to two straight quarters of contraction through September.
The report follows the BOJ's key tankan survey that showed solid capital spending was planned by big firms in the fiscal year to March 2015. Companies have so far been slow to implement investment plans because of a murky outlook.
The Cabinet Office raised its view of business investment, saying it is largely flat after previously noting some weak spots in capital spending, although it was on a rising trend.
The Cabinet Office official expressed a cautious overall view, saying that weakness remained in the economy as a whole, including in private consumption.
The Cabinet Office described private consumption as holding firm while weakness was seen in consumer confidence which has been sliding because the weak yen drives up the cost of imports.
A tepid economic recovery challenges the plans of Abe and the BOJ to pull the world's third largest economy out of deflation and put it on a course for sustained growth led by the private sector.
Japan government raises view on capex, output; economy in recovery albeit weakness| Reuters
Minebea, Development Bank of Japan to acquire German company for $125M
Minebea's weight sensors are used in heavy machinery such as cranes.
TOKYO -- Minebea is partnering with Development Bank of Japan to acquire German industrial-scale giant Sartorius Mechatronics T&H, the industrial technology unit of Sartorius, in an investment expected to total just under 15 billion yen ($125 million).
The Japanese pair will buy all the shares in Sartorius Mechatronics from its parent, bio-equipment maker Sartorius AG, by February. Minebea will assume a 51% stake, and DBJ will take 49%. Minebea partnered with the bank to minimize risk, but may consider buying the remaining shares in several years. By acquiring the German company, it hopes to tap growing demand for industrial measurement equipment used in ensuring food product safety and product quality.
Sartorius Mechatronics makes, sells and services industrial equipment used for such purposes as measuring the amount of corn and oil stored in silos and tanks to detect foreign bodies that might make their way into processing procedures. It boasts a wide client base in Europe and has sites in China and India.
Sartorius Mechatronic's current sales tally roughly 15 billion yen. Minebea's measurement components unit sees sales of 12 billion yen. Minebea is aiming for the two combined to achieve around 50 billion yen in sales by fiscal 2017.
Industrial scales: Minebea, Development Bank of Japan to acquire German company for $125M- Nikkei Asian Review
Minebea's weight sensors are used in heavy machinery such as cranes.
TOKYO -- Minebea is partnering with Development Bank of Japan to acquire German industrial-scale giant Sartorius Mechatronics T&H, the industrial technology unit of Sartorius, in an investment expected to total just under 15 billion yen ($125 million).
The Japanese pair will buy all the shares in Sartorius Mechatronics from its parent, bio-equipment maker Sartorius AG, by February. Minebea will assume a 51% stake, and DBJ will take 49%. Minebea partnered with the bank to minimize risk, but may consider buying the remaining shares in several years. By acquiring the German company, it hopes to tap growing demand for industrial measurement equipment used in ensuring food product safety and product quality.
Sartorius Mechatronics makes, sells and services industrial equipment used for such purposes as measuring the amount of corn and oil stored in silos and tanks to detect foreign bodies that might make their way into processing procedures. It boasts a wide client base in Europe and has sites in China and India.
Sartorius Mechatronic's current sales tally roughly 15 billion yen. Minebea's measurement components unit sees sales of 12 billion yen. Minebea is aiming for the two combined to achieve around 50 billion yen in sales by fiscal 2017.
Industrial scales: Minebea, Development Bank of Japan to acquire German company for $125M- Nikkei Asian Review
Citibank Sells Japan Retail Unit to Sumitomo Mitsui
TOKYO—When Japanese regulators accused the local retail unit of Citigroup Inc. of improper lending practices in 2004 and ordered its private banking operations shut down, Charles Prince , then Citi’s chief executive, bowed deeply before reporters and pledged to overhaul the bank’s controls.
But the bank never fully got its hands around the issue and over the next decade faced punishments from Japan’s Financial Services Agency over anti-money-laundering controls and other problems. Many Japanese customers switched to other private banks.
On Thursday, Sumitomo Mitsui Banking Corp., Japan’s second-largest lender, said it would purchase Citi’s Japanese retail operations, leaving the New York bank to focus on corporate banking, investment banking and other institutional businesses in the world’s third-largest economy.
SMBC said it believed it could make the unit profitable, in part by leveraging the deal to give its customers access to Citigroup’s 1.9 million automated teller machines globally.
SMBC, the core banking unit of Sumitomo Mitsui Financial Group Inc., will take over Citibank Japan’s retail business including its deposits, 740,000 customers, branches, 1,600 employees and network of automated teller machines in October 2015. SMBC said it would merge Citi’s retail bank with its trust-bank unit, SMBC Trust Bank Ltd., which mainly consists of business taken over through SMBC’s acquisition of Société Générale Private Banking Japan Ltd. last year.
The Japanese lender will pay Citi between ¥30 billion and ¥50 billion (between $250 million and $417 million) depending on the number of customers and deposits it inherits, according to people familiar with the matter. SMBC said it had no plan to cut jobs following the acquisition.
“For current Citibank Japan customers, the service to be offered won’t change under our bank,” said Nobuaki Kurumatani, an SMBC executive, at a news conference Thursday. He said SMBC wanted to provide financial services such as asset management in foreign currencies to Citibank customers.
Citi’s retail business in Japan currently has about ¥2.4 trillion in deposits at 31 branches in major cities across the country. For decades, it has been the top Western bank in Japan, catering to Japanese who travel abroad and some foreign residents in Japan. Mr. Kurumatani said Citibank Japan’s ¥1 trillion of foreign-currency deposits were also attractive for SMBC.
Citigroup said in October it would exit the Japanese retail business, as part of its plan to scale back local operations in certain markets around the globe, such as Costa Rica and Egypt.
In the quarter ended in September, Citibank Japan posted a loss of about ¥2 billion.
Citigroup is separately in talks to sell its Diners Club credit-card business in Japan to another local lender, according to people familiar with the matter.
Citibank has had a presence in Japan for more than a century but hit a rough patch in recent years. Among several run-ins with regulators was a 2011 order by the Financial Services Agency to improve sales practices after Citigroup staff allegedly sold financial products such as investment trusts without disclosing the level of risk to customers. Citi said at the time it took the issue seriously and would take steps to avoid a repeat of the problems.
Sumitomo Mitsui said it didn’t expect the problems to recur and it would keep an eye on compliance.
“I can say there’s nothing problematic about our acquisition of Citi, and not that I’m saying Citi had an issue…but we want to reach the level that the regulators expect us to be at as a Japanese megabank,” SMBC’s Mr. Kurumatani said.
Citibank Sells Japan Retail Unit to Sumitomo Mitsui - WSJ
TOKYO—When Japanese regulators accused the local retail unit of Citigroup Inc. of improper lending practices in 2004 and ordered its private banking operations shut down, Charles Prince , then Citi’s chief executive, bowed deeply before reporters and pledged to overhaul the bank’s controls.
But the bank never fully got its hands around the issue and over the next decade faced punishments from Japan’s Financial Services Agency over anti-money-laundering controls and other problems. Many Japanese customers switched to other private banks.
On Thursday, Sumitomo Mitsui Banking Corp., Japan’s second-largest lender, said it would purchase Citi’s Japanese retail operations, leaving the New York bank to focus on corporate banking, investment banking and other institutional businesses in the world’s third-largest economy.
SMBC said it believed it could make the unit profitable, in part by leveraging the deal to give its customers access to Citigroup’s 1.9 million automated teller machines globally.
SMBC, the core banking unit of Sumitomo Mitsui Financial Group Inc., will take over Citibank Japan’s retail business including its deposits, 740,000 customers, branches, 1,600 employees and network of automated teller machines in October 2015. SMBC said it would merge Citi’s retail bank with its trust-bank unit, SMBC Trust Bank Ltd., which mainly consists of business taken over through SMBC’s acquisition of Société Générale Private Banking Japan Ltd. last year.
The Japanese lender will pay Citi between ¥30 billion and ¥50 billion (between $250 million and $417 million) depending on the number of customers and deposits it inherits, according to people familiar with the matter. SMBC said it had no plan to cut jobs following the acquisition.
“For current Citibank Japan customers, the service to be offered won’t change under our bank,” said Nobuaki Kurumatani, an SMBC executive, at a news conference Thursday. He said SMBC wanted to provide financial services such as asset management in foreign currencies to Citibank customers.
Citi’s retail business in Japan currently has about ¥2.4 trillion in deposits at 31 branches in major cities across the country. For decades, it has been the top Western bank in Japan, catering to Japanese who travel abroad and some foreign residents in Japan. Mr. Kurumatani said Citibank Japan’s ¥1 trillion of foreign-currency deposits were also attractive for SMBC.
Citigroup said in October it would exit the Japanese retail business, as part of its plan to scale back local operations in certain markets around the globe, such as Costa Rica and Egypt.
In the quarter ended in September, Citibank Japan posted a loss of about ¥2 billion.
Citigroup is separately in talks to sell its Diners Club credit-card business in Japan to another local lender, according to people familiar with the matter.
Citibank has had a presence in Japan for more than a century but hit a rough patch in recent years. Among several run-ins with regulators was a 2011 order by the Financial Services Agency to improve sales practices after Citigroup staff allegedly sold financial products such as investment trusts without disclosing the level of risk to customers. Citi said at the time it took the issue seriously and would take steps to avoid a repeat of the problems.
Sumitomo Mitsui said it didn’t expect the problems to recur and it would keep an eye on compliance.
“I can say there’s nothing problematic about our acquisition of Citi, and not that I’m saying Citi had an issue…but we want to reach the level that the regulators expect us to be at as a Japanese megabank,” SMBC’s Mr. Kurumatani said.
Citibank Sells Japan Retail Unit to Sumitomo Mitsui - WSJ
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For the first time since records were collected in 1955, Japan's population is drawing down its savings and the savings rate, calculated as savings divided by disposable income plus pension payments, was negative 1.3%.
It's a dramatic change from when the Japanese saved nearly a quarter of their income (23.1%) when the savings rate peaked in 1975.
Japan had the highest household saving rate in the OECD in the 1960s until it fell to the lowest. After all, an aging population draws down savings and Japan is the fastest-aging country in the world; its population has been shrinking for a decade.
It's another blow to the Japanese Prime Minister Shinzo Abe, who just won another term to try and implement his policies dubbed Abenomics. On the campaign trail, he said that Abenomics aimed to raise wages and employment to revive the economy and defeat deflation or price falls.
Yet, earnings (adjusted for inflation) dropped 4.3% from a year earlier in November. It's the steepest decline since the 2009 global crisis and marks the 17th month of falls.
Indebted country
Unsurprisingly, households are spending less. The average spend has dropped by 2.5%, which is the eighth consecutive drop - a trend that won't help boost domestic demand and prices.
Indeed, inflation has clocked in at a 14 month low. There's no price pressure on nominal yields on government bonds. The 10 year bond yield has fallen to a record low of below 0.3%.
Such low borrowing costs will help the highly indebted country, but it also reflects an expectation that the economy and inflation won't be getting going, and ultimately lead to rate rises.
BBC News - Japan’s savings rate turns negative for first time
In sum, it's a tough slew of data for Abenomics.
Since their debt crisis in the early 1990s, the Japanese have been reluctant to borrow on a large scale. So, unless wages rise sustainably, it's hard to see how household spending can. Without more domestic demand, firms are reluctant to raise wages and invest, which is why they still hold substantial cash.
In fact, Japanese firms' cash holdings have risen by about 12% since Abe came to power two years ago, and reached a record high of close to $2 trillion (some $1.96 trillion or 233 trillion yen).
Domestic consumption
The high savings rate of Japanese firms is also why declining household savings hadn't noticeably affected the country's current account surplus - which measures the amount of money made investing from the rest of the world as well as trade - for a while.
With savings drawn down and falling wages, it'll be hard for Japan to rely on consumption to recover. Until consumer spending does recover, Japan faces an uphill battle to revive its domestic economy.
I've written before about how developed nations are aging and 'turning Japanese' in that sense.
Another lesson to draw is that an aging population will dis-save, so high-saving countries now - like China and Germany - may soon find that they are heading down a similar road to Japan.
It's a dramatic change from when the Japanese saved nearly a quarter of their income (23.1%) when the savings rate peaked in 1975.
Japan had the highest household saving rate in the OECD in the 1960s until it fell to the lowest. After all, an aging population draws down savings and Japan is the fastest-aging country in the world; its population has been shrinking for a decade.
It's another blow to the Japanese Prime Minister Shinzo Abe, who just won another term to try and implement his policies dubbed Abenomics. On the campaign trail, he said that Abenomics aimed to raise wages and employment to revive the economy and defeat deflation or price falls.
Yet, earnings (adjusted for inflation) dropped 4.3% from a year earlier in November. It's the steepest decline since the 2009 global crisis and marks the 17th month of falls.
Indebted country
Unsurprisingly, households are spending less. The average spend has dropped by 2.5%, which is the eighth consecutive drop - a trend that won't help boost domestic demand and prices.
Indeed, inflation has clocked in at a 14 month low. There's no price pressure on nominal yields on government bonds. The 10 year bond yield has fallen to a record low of below 0.3%.
Such low borrowing costs will help the highly indebted country, but it also reflects an expectation that the economy and inflation won't be getting going, and ultimately lead to rate rises.
BBC News - Japan’s savings rate turns negative for first time
In sum, it's a tough slew of data for Abenomics.
Since their debt crisis in the early 1990s, the Japanese have been reluctant to borrow on a large scale. So, unless wages rise sustainably, it's hard to see how household spending can. Without more domestic demand, firms are reluctant to raise wages and invest, which is why they still hold substantial cash.
In fact, Japanese firms' cash holdings have risen by about 12% since Abe came to power two years ago, and reached a record high of close to $2 trillion (some $1.96 trillion or 233 trillion yen).
Domestic consumption
The high savings rate of Japanese firms is also why declining household savings hadn't noticeably affected the country's current account surplus - which measures the amount of money made investing from the rest of the world as well as trade - for a while.
With savings drawn down and falling wages, it'll be hard for Japan to rely on consumption to recover. Until consumer spending does recover, Japan faces an uphill battle to revive its domestic economy.
I've written before about how developed nations are aging and 'turning Japanese' in that sense.
Another lesson to draw is that an aging population will dis-save, so high-saving countries now - like China and Germany - may soon find that they are heading down a similar road to Japan.
Japan Approves $29 Billion Spending Package to Boost Economy
Japan’s government approved a 3.5 trillion yen ($29 billion) fiscal stimulus package to boost the economy after April’s sales tax hike caused consumption to slump.
The measures include shopping vouchers, subsidized heating fuel for the poor and low interest loans for small businesses hurt by rising input costs, and will boost gross domestic product by 0.7 percent, the government estimates. The spending will be paid for with tax revenue and unspent funds and won’t need new bond issuance, Economy Minister Akira Amari said today in Tokyo.
Unexpected falls in output and retail sales in November underscore the continued weakness in the economy. With little sign of a rebound in domestic demand, getting growth back on a recovery track is a priority for Prime Minister Shinzo Abe.
“This will support private consumption and boost regional economies, so that the virtuous economic cycle spreads to all corners of the nation,” Abe said in Tokyo after the decision.
About 1.7 trillion yen will be spent on public works in areas damaged by natural disasters and to improve disaster preparedness, with 600 billion yen for revitalizing regional economies and 1.2 trillion yen to support people and small businesses hurt by the current economic situation, according to documents released by the Cabinet Office.
Extra Budget
The package is part of an extra budget for the fiscal year through March which will be adopted by the cabinet on Jan. 9, Finance Minister Taro Aso said in Tokyo today. The budget then needs to be approved by parliament, which is controlled by the ruling coalition.
Abe last month delayed the planned further hike in the sales tax by 18 months after data showed the economy fell into recession. GDP (JGDPAGDP) shrank an annualized 1.9 percent last quarter, more than initially estimated, after a 6.7 percent contraction in the three months from April, when the levy was raised for the first time since 1997.
The postponement fueled concern about the government’s effort to rein in the world’s heaviest debt and prompted Moody’s Investors Service to cut its credit rating on Japan.
“Coupled with the delay of the sales tax hike, the package will be large enough to stimulate consumption ,” Hidenori Suezawa, a financial-market and fiscal analyst at SMBC Nikko Securities Inc. in Tokyo, said before the announcement. “Rising tax revenue will be of some help in reining in debt but the government’s fiscal policies are making it harder to consolidate their finances.”
The Bank of Japan expanded its already unprecedented monetary easing in October, aiming to pre-empt any risk of a delay in ending Japan’s “deflationary mindset.” A decline in demand following the tax increase and a drop in oil prices put downward pressure on prices, the bank said.
Japan Approves $29 Billion Spending Package to Boost Economy - Bloomberg
Japan’s government approved a 3.5 trillion yen ($29 billion) fiscal stimulus package to boost the economy after April’s sales tax hike caused consumption to slump.
The measures include shopping vouchers, subsidized heating fuel for the poor and low interest loans for small businesses hurt by rising input costs, and will boost gross domestic product by 0.7 percent, the government estimates. The spending will be paid for with tax revenue and unspent funds and won’t need new bond issuance, Economy Minister Akira Amari said today in Tokyo.
Unexpected falls in output and retail sales in November underscore the continued weakness in the economy. With little sign of a rebound in domestic demand, getting growth back on a recovery track is a priority for Prime Minister Shinzo Abe.
“This will support private consumption and boost regional economies, so that the virtuous economic cycle spreads to all corners of the nation,” Abe said in Tokyo after the decision.
About 1.7 trillion yen will be spent on public works in areas damaged by natural disasters and to improve disaster preparedness, with 600 billion yen for revitalizing regional economies and 1.2 trillion yen to support people and small businesses hurt by the current economic situation, according to documents released by the Cabinet Office.
Extra Budget
The package is part of an extra budget for the fiscal year through March which will be adopted by the cabinet on Jan. 9, Finance Minister Taro Aso said in Tokyo today. The budget then needs to be approved by parliament, which is controlled by the ruling coalition.
Abe last month delayed the planned further hike in the sales tax by 18 months after data showed the economy fell into recession. GDP (JGDPAGDP) shrank an annualized 1.9 percent last quarter, more than initially estimated, after a 6.7 percent contraction in the three months from April, when the levy was raised for the first time since 1997.
The postponement fueled concern about the government’s effort to rein in the world’s heaviest debt and prompted Moody’s Investors Service to cut its credit rating on Japan.
“Coupled with the delay of the sales tax hike, the package will be large enough to stimulate consumption ,” Hidenori Suezawa, a financial-market and fiscal analyst at SMBC Nikko Securities Inc. in Tokyo, said before the announcement. “Rising tax revenue will be of some help in reining in debt but the government’s fiscal policies are making it harder to consolidate their finances.”
The Bank of Japan expanded its already unprecedented monetary easing in October, aiming to pre-empt any risk of a delay in ending Japan’s “deflationary mindset.” A decline in demand following the tax increase and a drop in oil prices put downward pressure on prices, the bank said.
Japan Approves $29 Billion Spending Package to Boost Economy - Bloomberg
Lo and behold , he finally follows through ! 
@LeveragedBuyout -- thought of you when i read this
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Abe's cabinet OKs FY2015 tax plan centering on corporate tax cuts
TOKYO (Kyodo) -- Prime Minister Shinzo Abe's cabinet on Wednesday endorsed tax policy changes for fiscal 2015, centering on corporate tax cuts aimed at shoring up Japan's faltering economy.
The new tax reform plan is estimated to make tax cuts of around 142.3 billion yen for the next fiscal year starting April 1 in combined state and local taxes, the Finance Ministry said.
The Abe government will slash Japan's current 34.62 percent effective corporate income tax rate to 32.11 percent in fiscal 2015 and to 31.33 percent in the following year.
The tax reductions over the two years are expected to amount to more than 400 billion yen, the ministry said.
As a step to bolster private spending, the government will exempt from taxation in fiscal 2015 gifts of money from parents or grandparents to fund marriages, childbirth and child care for their offspring aged 20 and over.
The tax exemption, which will be applicable to gifts of up to 10 million yen, is designed to tap the huge financial assets held by the elderly to invigorate the economy, as Japan struggles with a rapidly aging population.
Elderly people are believed to own around 60 percent of financial assets held by individuals in Japan.
The existing tax benefits, including exemption from capital transfer tax for people donating funds for the education and home purchases of their children and grandchildren, will be extended.
In a bid to revitalize local economies, tax breaks will be given to companies relocating their headquarters to regional areas from Tokyo and other large cities.
As the economy has been sluggish in the wake of the 3-percentage-point consumption tax hike to 8 percent in April, the government decided to put off an additional tax increase to 10 percent by 18 months from October 2015.
Abe's cabinet OKs FY2015 tax plan centering on corporate tax cuts- Nikkei Asian Review
@LeveragedBuyout -- thought of you when i read this
-------------
Abe's cabinet OKs FY2015 tax plan centering on corporate tax cuts
TOKYO (Kyodo) -- Prime Minister Shinzo Abe's cabinet on Wednesday endorsed tax policy changes for fiscal 2015, centering on corporate tax cuts aimed at shoring up Japan's faltering economy.
The new tax reform plan is estimated to make tax cuts of around 142.3 billion yen for the next fiscal year starting April 1 in combined state and local taxes, the Finance Ministry said.
The Abe government will slash Japan's current 34.62 percent effective corporate income tax rate to 32.11 percent in fiscal 2015 and to 31.33 percent in the following year.
The tax reductions over the two years are expected to amount to more than 400 billion yen, the ministry said.
As a step to bolster private spending, the government will exempt from taxation in fiscal 2015 gifts of money from parents or grandparents to fund marriages, childbirth and child care for their offspring aged 20 and over.
The tax exemption, which will be applicable to gifts of up to 10 million yen, is designed to tap the huge financial assets held by the elderly to invigorate the economy, as Japan struggles with a rapidly aging population.
Elderly people are believed to own around 60 percent of financial assets held by individuals in Japan.
The existing tax benefits, including exemption from capital transfer tax for people donating funds for the education and home purchases of their children and grandchildren, will be extended.
In a bid to revitalize local economies, tax breaks will be given to companies relocating their headquarters to regional areas from Tokyo and other large cities.
As the economy has been sluggish in the wake of the 3-percentage-point consumption tax hike to 8 percent in April, the government decided to put off an additional tax increase to 10 percent by 18 months from October 2015.
Abe's cabinet OKs FY2015 tax plan centering on corporate tax cuts- Nikkei Asian Review
LeveragedBuyout
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Lo and behold , he finally follows through !
@LeveragedBuyout -- thought of you when i read this
-------------
Abe's cabinet OKs FY2015 tax plan centering on corporate tax cuts
TOKYO (Kyodo) -- Prime Minister Shinzo Abe's cabinet on Wednesday endorsed tax policy changes for fiscal 2015, centering on corporate tax cuts aimed at shoring up Japan's faltering economy.
The new tax reform plan is estimated to make tax cuts of around 142.3 billion yen for the next fiscal year starting April 1 in combined state and local taxes, the Finance Ministry said.
The Abe government will slash Japan's current 34.62 percent effective corporate income tax rate to 32.11 percent in fiscal 2015 and to 31.33 percent in the following year.
The tax reductions over the two years are expected to amount to more than 400 billion yen, the ministry said.
As a step to bolster private spending, the government will exempt from taxation in fiscal 2015 gifts of money from parents or grandparents to fund marriages, childbirth and child care for their offspring aged 20 and over.
The tax exemption, which will be applicable to gifts of up to 10 million yen, is designed to tap the huge financial assets held by the elderly to invigorate the economy, as Japan struggles with a rapidly aging population.
Elderly people are believed to own around 60 percent of financial assets held by individuals in Japan.
The existing tax benefits, including exemption from capital transfer tax for people donating funds for the education and home purchases of their children and grandchildren, will be extended.
In a bid to revitalize local economies, tax breaks will be given to companies relocating their headquarters to regional areas from Tokyo and other large cities.
As the economy has been sluggish in the wake of the 3-percentage-point consumption tax hike to 8 percent in April, the government decided to put off an additional tax increase to 10 percent by 18 months from October 2015.
Abe's cabinet OKs FY2015 tax plan centering on corporate tax cuts- Nikkei Asian Review
It's a good start, but I'm still pulling my hair out over the consumption tax hike. It seems like yesterday that Ryutaro Hashimoto did the same thing prematurely, just when Japan was starting to turn the corner. I hope this tax cut helps, but the DPJ setting the consumption tax hike schedule in motion really threw a wrench in the works.
Next up: increasing the labor force participation rate (through day care benefits?), fostering an increase in capex (or at least distributions of corporate tax hoards to shareholders), deregulation, reopening nuclear reactors, and TPP.
There is much to do, and the window is closing, fast. After renewing his mandate in this last election, Abe should be engaging in a shock-and-awe campaign to revitalize the economy. If he fails to put more on the table within his first 100 days, you can officially put me in the skeptic column.
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