What's new

Japan Economy Forum

more bad news from asia and even bigger ones, the chinese property collapse has began. This can topple the chiense shadow banks. Will be interesting how this will turn out

China Property Collapse Has Begun - Forbes
Why are you derailing this thread? This thread is about Japan, not China. Start a new one on China if you want to!
 
The 3 main exports of Japan in the 1980s-2000's were cars, electronics (dvd players, walkman, cellphones, camera, ect) and household appliances (water boiler, rice cooker)

Samsung + Apple effectively dethroned Japan as the king of electronics, Apple's Ipod defeated Japanese walkman/CD player/MP3 device, Japan's computers are not as popular as apple/samsung/chinese, cellphone market lost to the smartphone revolution.

Japan's TV and camera market are still in OK shape but they don't command the same market share anymore.

Japan's household appliances are losing because china just make her own.

Japan's cars are still as strong as ever, but if Japan wants to be the export capital of the world like it was in the 1980's-1990's, she'll need to find a new industry because I don't think she can reclaim the electronics market share anymore.
 
Honda expects to expand Takata airbag recall, could top one million vehicles: source
YOKO KUBOTA

TOKYO — Reuters

Published Monday, Jun. 16 2014, 9:48 AM EDT

Last updated Monday, Jun. 16 2014, 9:59 AM EDT

Comments

Honda Motor Co expects to recall vehicles with potentially defective air bags, a move that could expand a massive, multi-company air-bag recall by more than a million, according to a person with knowledge of the matter.

The recall involves faulty air-bag inflators supplied by Takata Corp and would follow a similar move this week by Toyota Motor Corp. The Honda recall should be announced by the end of June, according to the person, who declined to be identified.

More Related to this Story

Spotted
Spotted: The best way to show your true World Cup colours is on your car


Gallery
In Pictures: How real soccer fans decorate their cars


Trans-Canada Highway
Ten exciting new cars to watch for

Honda, while waiting for further information from Takata on its inflator problems, is also investigating on its own how many vehicles it may need to call back and where they are, according to the individual. The number of vehicles it recalls could exceed the 1.135 million vehicles Honda called back globally last year, the person said.

Asked whether Honda will expand air-bag-related recalls from last year, company spokeswoman Akemi Ando said: “We are conducting investigations quickly and if we decide that there are vehicles that should be called back, we will swiftly file for a recall.”

Toyota, the world’s largest auto maker, on Wednesday called back 1.62 million previously recalled vehicles outside Japan as well as 650,000 more in Japan not previously recalled. The additional vehicles brought to more than 7 million the total number of cars equipped with Takata air bags to be called back worldwide over the last five years.

Toyota’s recall from 2013 was a part of a bigger recall by car makers that include Honda, Nissan Motor Co and Mazda Motor Corp. In total, they recalled about 3.6 million vehicles with air-bag inflators that could explode in an accident and send pieces of shrapnel into the vehicle.

Toyota said it has determined that the serial numbers of potentially faulty inflators that Takata previously supplied were incomplete. Takata said it supports Toyota’s decision to recall the vehicles.

The Japanese Transport Ministry has ordered car makers including Honda, Nissan and Mazda to determine quickly whether they need to expand their recalls. Mazda spokeswoman Misato Kobayashi declined to say when the company would finish its investigations, while Nissan could not be reached immediately.

The U.S. auto industry regulator, the National Highway Traffic Safety Administration, said it had opened an investigation this week into an estimated 1,092,000 vehicles made by not only Toyota, but also Honda, Nissan, Mazda and Fiat SpA’s Chrysler Group after receiving six reports of air bags not deploying properly in the humid climates of Florida and Puerto Rico.

(Additional reporting by Maki Shiraki in Tokyo)

Honda expects to expand Takata airbag recall, could top one million vehicles: source - The Globe and Mail
 
U.S. key to Uniqlo's global aspirations

NEW YORK —

Many of the details of Uniqlo’s aggressive U.S. expansion still need to be worked out, but at least one thing is clear: the campaign will start on the coasts.

The Japanese apparel chain, known in its home market for its cheap chic clothing basics, has so far confined its U.S. adventure to cities like Boston, San Francisco and Los Angeles.

But a broader U.S. presence will be inevitable as the company blankets the country as part of its ambition to become the world’s biggest specialty apparel retailer. Uniqlo will grow from fewer than 10 U.S. stores last year, to about 40 by the end of 2014, to 200 by 2020.

“We will have a much larger footprint, which has to include the middle of the country,” said Larry Meyer, chief executive of Uniqlo USA.

So far, Uniqlo’s brand recognition is strong in the Northeast, where consumers know its flagship U.S. stores in New York City, and in the West Coast, where a large Asian population already recognizes the company.

Uniqlo, a unit of Fast Retailing Co, is part of a wave of giants remaking global apparel. This group includes Spain’s Grupo Inditex, parent of Zara; Sweden’s Hennes & Mauritz (H&M); and U.S. chain Gap, all of which have greater sales than Uniqlo. For now.

The United States, along with China and Southeast Asia, are the key growth markets identified by founder and chief executive Tadashi Yanai, ranked Japan’s second-richest man by Forbes.

Yanai aims to increase global sales to five trillion yen by 2020, about a five-fold increase from 2013 sales and a sum that would make it the biggest player in this segment.

Yanai’s philosophy “and my philosophy is, ‘If you think small, you get no higher. So you might as well think big,’” said Meyer, a retail industry veteran who joined Uniqlo in January 2013.

Uniqlo is especially known for basics like T-shirts that may fetch $12 and undergarments that cost less than half of what they would garner at department stores.

The company also prides itself on innovations like “heattech,” a thin fabric that keeps heat from escaping the body, and “performance wear,” athletic gear donned by tennis star Novak Djokovic that is sweat and odor-resistant.

Morningstar analyst Jaime Katz said Uniqlo’s challenges include attracting enough customers at especially pricey locations like Fifth Avenue in Manhattan. She also cites the difficulty of breaking into a new market where companies like Gap and H&M are already established.

But Katz sees an appeal in Uniqlo.

“It’s more a color schematic than anything else,” Katz said. “It’s the same thing offered in 100 different colors. Everybody needs the basics, everybody needs consistent product, and that’s what they tend to offer.”

Meyer said its U.S. stores are “on the road to profitability” while the company is in expansion mode.

The company’s items will be manufactured at the same China sites and moved through the company’s global supply chain. The designs will be identical to those in Japan, although Uniqlo plans sizing specifications for the U.S. market.

“There’s more than just size in size,” Meyer said. “It’s a question of how wide are the shoulders, how wide is the rear. Clothing sizing is shockingly complex.”

U.S. key to Uniqlo's global aspirations ‹ Japan Today: Japan News and Discussion
 
JAL and NTT East to provide tourists to Japan with free Wi-Fi service

TOKYO —

Japan Airlines (JAL) and Nippon Telegraph and Telephone East Corp (NTT East) will provide free Wi-Fi service to tourists visiting Japan. Free ID and password for connecting to NTT East’s Free Wi-Fi (public wireless LAN) service can be obtained on JAL overseas website (JAPAN AIRLINES Worldwide Sites from late June.

Around 50% of international tourists to Japan wish to use free Wi-Fi. In response, free public wireless LAN environment has been developed in many areas such as airports, railway stations, and convenience stores etc. To introduce more convenient services to tourists visiting Japan, JAL said it would cooperate with NTT East, which has “Hikari Station” hotspots located at more than 46,000 shops and facilities in the eastern Japan, to enable tourists to use free Wi-Fi service during short visits to Japan.

Foreign visitors purchasing ticket of JAL flights to Japan will be eligible to apply for free ID and password on JAL overseas website. With the ID and password, users can enjoy free Wi-Fi service at a wide range of NTT East’s Wi-Fi hotspots for 14 days.


JAL and NTT East to provide tourists to Japan with free Wi-Fi service ‹ Japan Today: Japan News and Discussion
 
The 3 main exports of Japan in the 1980s-2000's were cars, electronics (dvd players, walkman, cellphones, camera, ect) and household appliances (water boiler, rice cooker)

Samsung + Apple effectively dethroned Japan as the king of electronics, Apple's Ipod defeated Japanese walkman/CD player/MP3 device, Japan's computers are not as popular as apple/samsung/chinese, cellphone market lost to the smartphone revolution.

Japan's TV and camera market are still in OK shape but they don't command the same market share anymore.

Japan's household appliances are losing because china just make her own.

Japan's cars are still as strong as ever, but if Japan wants to be the export capital of the world like it was in the 1980's-1990's, she'll need to find a new industry because I don't think she can reclaim the electronics market share anymore.

Well Japan was certainly a leader in consumer entertainment electronics (eg Sony). However that whole segment has gone through a huge transformation (I believe due to mp3s). Gone are the days of walking into a store like Tweeter and buying a receiver, equalizer, a dual cassette deck, a phonograph, a VCR, a CD player, and big @ss speakers. This stack could cost some serious cash:

TECHNICS%20System%20Component%20set%20X845.jpg



So much cash that thieves would break into your house and go straight for the stereo system.

Now it's basically this.

no more commercials like this anymore

At least break-ins have decreased as there isn't easy money to be had now. Hard to carry a huge flat screen under your arm. Playstation is still a target.
 
Last edited:
Well Japan was certainly a leader in consumer entertainment electronics (eg Sony). However that whole segment has gone through a huge transformation (I believe due to mp3s). Gone are the days of walking into a store like Tweeter and buying a receiver, equalizer, a dual cassette deck, a phonograph, a VCR, a CD player, and big @ss speakers. This stack could cost some serious cash:

TECHNICS%20System%20Component%20set%20X845.jpg



Now it's basically this.

Ah, the 80s and 90s. I was a poor kid but they were good times.
A time when a lot of things were out of reach so imagination and improvisation was the norm. Looking back, it seems to me like the modern world has corrupted me too much.
 
Ah, the 80s and 90s. I was a poor kid but they were good times.
A time when a lot of things were out of reach so imagination and improvisation was the norm. Looking back, it seems to me like the modern world has corrupted me too much.

Plus most speakers in tv's sounded like sh*t and you were pretty much forced to buy stuff like that to get decent sound.
Now tv speakers are relatively decent (not great...but acceptable). So no need for extra components.

Mp3s + decent tv sound = death of the component stack and Japan's electronics cash cow.
 
Last edited:
Japan PM Abe says 'positive cycle' emerging in economy

TOKYO (Reuters) - Japanese Prime Minister Shinzo Abe said on Tuesday that a "positive cycle" was appearing in the country's economy as rising corporate revenues lead to higher wages and household income.

But Abe said the recovery has yet to reach broader sectors of the economy, stressing the need to ensure the positive economic cycle does not end up as a temporary phenomenon.

"The mandate of 'Abenomics' is to make people across Japan feel the benefits of the economic recovery," he told a news conference.




Japan PM Abe says 'positive cycle' emerging in economy - chicagotribune.com

JAPANESE Prime Minister Shinzo Abe yesterday announced an "upgrading" of his New Growth Strategy, and pledged anew to deregulate and revive the world's third-largest economy through bold economic reforms.

"There will be no taboos and no sacred areas. The Abe Cabinet will break through any wall," he said.

The expanded strategy identified key areas of reform as economic deregulation, labour market reforms, taxation, foreign investment in Japan, agricultural and other trade reforms, stabilising Japan's shrinking population, boosting financial investment and improving corporate governance, along with actions such as strengthening the role of women.

At a briefing last night after the Cabinet endorsed the enhanced growth strategy, Mr Abe acknowledged that the benefits of Abenomics had yet to reach all corners of Japan, and pledged to remedy this.

With the main provisions of the growth strategy having been leaked lately, financial markets were blase about the news; Tokyo stock prices barely moved.

Obviously aware that markets had become sceptical of any early progress on the deregulation and structural reform front, Mr Abe kept stressing yesterday that his administration was bent on breaking all barriers to reform.

One of the most closely watched areas of the growth strategy is the proposed reduction of corporate taxes, which will give a boost to businesses foreign and domestic.

Mr Abe yesterday repeated his determination to cut the standard rate from the current 35 per cent to under 30 per cent. He still did not specify a time frame for doing this, but gave an assurance that the cut would not be tied to a second scheduled increase in the national consumption tax.

No decision has been made yet about going ahead with the plan to raise this tax from 8 per cent to 10 per cent next year, but he said that the government would "find the resources" to fund the corporate tax cut - and this will depend on the economy fares from hereon.

Markets worry that non-economic issues - security questions and constitutional issues, for example - could divert his attention from his ambitious agenda, but he pledged yesterday to stay the course.

Mr Abe defended his record of reform, saying that 30 bills related to economic reform had been passed in the 150-day ordinary session that just ended, and that the pace of reform would not lose steam.

Japan's economy is about to regain its confidence, he said, citing restored economic growth and inflation along with rising wages and bonuses, which are powering consumption. He conceded, however, that social expenditures would need to go up to aid certain groups and smaller businesses.

A key concern in the country is the need to stabilise the shrinking population at 100 million; experts say this will be difficult to achieve without allowing more immigration.

But Mr Abe defended his decision to focus on allowing construction and other workers to enter Japan for limited periods - likely to be extended from three years to five. Other countries have come up against problems from open-door policies, he said.

On trade, the government strategy is to quickly conclude the 12-nation Trans-Pacific Partnership (TPP) agreement. Talks are now bogged down as Japan and the United States, by far the most dominant economies in the TPP, remain at odds over issues such as access to Japan's agricultural market.

Under the New Growth Strategy, agricultural cooperatives will be urged to reform themselves over the next five years; the number of agricultural corporations will be raised four-fold to 50,000 by 2020, and the value of agricultural exports, to five trillion yen (S$61 billion) by 2030.

A Reuters report said the new growth strategy includes opening up US$30 billion in public infrastructure projects such as airports to management by private investors.

Tokyo also aims to double annual foreign direct investment to nearly US$345 billion by 2020. At 3.5 per cent of the gross domestic product, Japan's inbound direct investment is the lowest among OECD (Organisation for Economic Co-operation and Development) countries.

The Tokyo Stock Exchange will meanwhile compile by mid-2015 a Corporate Governance Code to improve oversight of listed companies. Under this, banks will have to appoint at least one outside director - a capitulation on previous recommendations from Mr Abe's party, which had called for multiple external directors for all listed companies.



Japan PM unveils his enhanced growth strategy, japan economy japan economy News & Headlines - THE BUSINESS TIMES
 
Last edited:
Sumitomo Mitsui Would Consider BNP Paribas’s U.S. Unit

Sumitomo Mitsui Financial Group Inc. (8316), Japan’s second-biggest bank by market value, would be open to a purchase of BNP Paribas (BNP) SA’s U.S. unit amid a push for acquisitions abroad, Chairman Masayuki Oku said.

“The U.S. market is a very big market and in retail banking there might some chances to get in -- of course we will study them,” Oku, 69, said yesterday in an interview in London. If BNP Paribas “comes to us, we will study it -- but they’re not coming. There are no such plans” at the moment, he said.

Sumitomo Mitsui and larger rival Mitsubishi UFJ Financial Group Inc. (8306) are watching to see if BNP Paribas will sell the BancWest Corp. unit, the Sunday Times reported June 1, without saying how it obtained the information. Japanese banks are seeking acquisitions abroad to offset falling lending rates that have led to the lowest interest margins in Asia.

“BancWest would be a rare deal if BNP really decides to sell it,” Akira Takai, a Tokyo-based analyst at Daiwa Securities Group Inc., said by phone today. “Japanese banks are expecting overseas businesses to lead earnings growth because domestic growth is slow.”

A potential $10 billion fine against BNP Paribas for violating U.S. sanctions is fueling speculation that France’s largest bank will seek to exit BancWest, which the Paris-based company has owned since 2001.


Isabelle Wolff, a spokeswoman at BNP Paribas in Paris, declined to comment on Oku’s remarks.

U.S. Return
Shares of Sumitomo Mitsui gained 0.4 percent to 4,259 yen at the midday trading break in Tokyo, where the company is based. The broader Topix (TPX) index added 0.2 percent.

A purchase of BancWest would bring the Japanese lender back to the U.S. for the first time since 1998, when predecessor Sumitomo Bank Ltd. sold San Francisco-based Sumitomo Bank of California. Japanese banks were pulling back from international businesses at the time, weighed down by bad loans at home.

BancWest, based in San Francisco, has more than 670 branches in 20 U.S. states, serving more than 2.4 million clients, according to its website. BNP Paribas said in March it was targeting at least 6 percent annual revenue growth for BancWest through 2016, after posting 2.2 billion euros ($3 billion) last year.

Price Concern
“The biggest issue would be the price,” Daiwa’s Takai said. “If it’s too high, that would lead to concern that Sumitomo Mitsui would need to sell shares to raise funds.”

Sumitomo Mitsui has stepped up investments abroad over the past two years. It doubled its stake in Bank of East Asia Ltd., Hong Kong’s largest family-run lender, to 9.5 percent in 2012 and agreed to buy 40 percent of Indonesia’s PT Bank Tabungan Pensiunan Nasional for about $1.5 billion last year.

Outside the U.S. and Asia, where the bank will continue to boost client assets, Sumitomo Mitsui is also eager to grow through acquisitions and has held talks with several European lenders that haven’t led to agreements, Oku said. He declined to identify the companies.

“We’re open to proposals in commercial banking that supplement our strategies in expanding our businesses on a global basis, or in Europe in a wider sense, the Middle East or Africa,” Oku said.

PNC Financial Services Group Inc. and Sumitomo Mitsui are among the banks weighing bids for Bank of New York Mellon Corp.’s corporate-trust arm, people with knowledge of the matter said last month. BNY Mellon is working with Goldman Sachs Group Inc. to sell the unit, which may fetch more than $2.5 billion, people familiar with the matter have said.

Sumitomo Mitsui last month forecast a 19 percent drop in this year’s earnings as loan growth loses momentum and returns from stock investments wane.


Sumitomo Mitsui Would Consider BNP Paribas’s U.S. Unit - Bloomberg
 
Japan’s Jobless Rate Falls to 16-Year Low

TOKYO — The unemployment rate in Japan fell to a 16-year low in May, government data showed on Friday, suggesting that the economy would rebound in the third quarter from a sales tax increase and consequent slump in consumer spending.

The jobless rate in Japan — the world’s third-largest economy, after those of the United States and China — fell to 3.5 percent. That is the lowest level since 1997 and that which the Japanese central bank says is near full employment. The jobless rate was 3.6 percent in April. At the same time, the availability of jobs rose to its highest level since 1992, which is encouraging news for Prime Minister Shinzo Abe as he tries to cement a recovery after two decades of stagnation.

The strong employment numbers were published alongside other data on Friday showing that the core consumer price index, which includes oil products but excludes the volatile prices of fresh food, rose 3.4 percent in the year to May, matching the median forecast of economists surveyed by Reuters. The sales tax increase pushed up prices across the board for the fastest rise since April 1982.

Excluding the tax increase, core consumer inflation stood at 1.4 percent, slower than the 1.5 percent annual increase in the previous month, mainly because of the fading effects of the weak yen and a rise last year in electricity bills. The slight decrease was in line with the Japanese central bank’s projection that price gains would slow for a few months before accelerating again late this year. The Bank of Japan estimated that the sales tax increase — it rose to 8 percent from 5 percent on April 1 — would add 1.7 percentage points to annual consumer inflation in April and two percentage points from May onward. The central bank has also said that Japan is on track to meet its 2 percent inflation target next year, although it projects that consumer inflation will hover just above 1 percent for several months.

Japan’s household spending fell 8 percent in the year to May, the government said Friday, four times the drop projected in a median market forecast and more than the 4.6 percent decline in April. The tumble mainly reflected a pulling back in spending on housing, cars and household appliances, all of which underwent a surge in demand before the sales tax increase. Households spent more on items like television sets, personal computers and clothing in May. Spending on eating out also stopped falling.

“The decline in household spending is too large to ignore, but if you exclude auto sales, there are signs that spending is bottoming out,” said Hiroshi Miyazaki, a senior economist at Mitsubishi UFJ Morgan Stanley Securities. “It may take a little longer for spending to recover,” he added, “but there’s no need to turn pessimistic on the economy.”

Analysts say they expect the economy to contract in the second quarter. Weak spending could make the contraction worse, they say, although the strong job market and an expected increase in summer bonus payments will underpin spending.

“A contraction in the second quarter is a certainty, but the job market improvements are positive for the economy,” said Yoshiki Shinke, the chief economist at the Dai-ichi Life Research Institute.

The data are unlikely to change dominant market expectations that the central bank will hold off on further monetary stimulus for the rest of this year, analysts said, and the central bank has signaled that it sees no immediate need to expand the already huge stimulus program deployed in April 2013.


http://www.nytimes.com/2014/06/28/b...-rate-falls-to-16-year-low-in-japan.html?_r=0
 
Japanese automakers boost investment in U.S. by $5 bn in 2013


WASHINGTON: Japanese carmakers boosted investment in their U.S. plants by more than $5 billion in 2013, the biggest increase on record, new figures from the Japan Automobile Manufacturers Association showed on Monday.


Total manufacturing investment in U.S. plants, vehicles and engines reached $40.6 billion in 2013, up $5.2 billion from the previous year and the biggest jump since Japanese automakers started building U.S. factories in the early 1980s.



Since Honda Motor Co began making cars in Ohio in 1982, Japanese automakers have come to rely on locally made vehicles for the U.S. market. About 70 percent of the vehicles sold by Japanese brands in the United States are made in North America.



Japanese automakers cut the exposure to fluctuating currency valuations and shipping expenses by making cars in the United States, Mexico and Canada for the U.S. market.



U.S. employment rose slightly to 82,816 workers last year at the 26 manufacturing facilities, 36 research plants and distributors operated by Japanese automakers Honda, Toyota Motor Corp, Nissan Motor Co, Subaru, a unit of Fuji Heavy Industries, Mitsubishi Motors Corp and Isuzu Motors. The increase in workers employed on research and development was the biggest since 2005.



"Direct employment through manufacturing and R&D increased for the third year in a row, proving the Japanese auto industry's value to America and its many hard workers," said JAMA USA general director Ron Bookbinder.



Another 319,568 workers were employed at the 6,312 dealerships operated by Japanese carmakers last year, JAMA said.



Bookbinder said the number of manufacturing workers at Japanese plants in the United States rose 2.7 percent to 59,494.



Japanese automakers boost investment in U.S. by $5 bn in 2013 | ET Auto
 
Sumitomo Mitsui Would Consider BNP Paribas’s U.S. Unit


A purchase of BancWest would bring the Japanese lender back to the U.S. for the first time since 1998, when predecessor Sumitomo Bank Ltd. sold San Francisco-based Sumitomo Bank of California. Japanese banks were pulling back from international businesses at the time, weighed down by bad loans at home.

It is precisely this way of thinking that has kept Japan from re-engineering its economy. The basics of management: dispose of underperforming assets, invest in growth assets. I was hopeful when Nomura stepped up to the plate to buy Lehman Bros' Asian operations, but my understanding is that the integration has not gone so well. Any insight on that from the Japanese press, @Nihonjin1051 ?

A couple of articles to add to the mix as a follow-up to my last comment. I will try and highlight only the key sections to save the reader some time:

1) Bolstering Japan’s ROE, Military and Financial
...Mr. Abe argues that longstanding Japanese traditions now must be changed, whether it’s a management culture that favors many stakeholders over shareholders, or a pacifism that seems impervious to new threats in the region.

...
But the farmers protesting Japan’s entry into a pan-Pacific free-trade pact have also been vociferous about the threat to their way of life. The Keidanren big business lobby has, behind the scenes, been fervent in arguing that Japan, unlike virtually every other advanced economy, doesn’t necessarily need independent directors on corporate boards. Even some institutional investors have argued that a focus on higher corporate ROE could erode social stability if companies forced to seek higher profits lay off workers, challenging Japan’s lifetime employment model.

The Abe counterargument: Japan has no choice. Japanese companies in listed on the first section of the Tokyo Stock Exchange had an average ROE of 6% from 2003 through 2013, compared with 12.6% for those in the MSCI World index, according to Bloomberg. That may have been fine for a time when Japan could rely on tolerant domestic capital for growth. It seems less viable if domestic companies need to turn more to global investors.

2) Boosting Japan’s Growth: Some Low-Hanging Fruit
Many parts of Prime Minister Shinzo Abe’s new growth strategy will be difficult to implement. That’s why he has called himself a “drill bit” poised to “break through the solid rock of vested interests.” It’s why some of the most significant proposals were, to mix metaphors, watered down before announcement. If it were easy to remove the impediments to Japanese growth, it would have been done long ago.

But there are actually a number of quick bureaucratic reforms the government could enact that could make a big difference for Japanese commerce. For example, “elimination of the requirement for company seal and judicial scrivener to complete the registration procedure” to start a new business “can be done without changing any existing law,” says a new working paper from Stanford University’s Japan Studies Program. “Moreover, these reforms are not likely to face much political resistance because the benefactors of the regulations (seal makers and judicial scriveners in this example) are not known for their political clout.”

The study, by economists Jamal Ibrahim Haidar of the Paris School of Economics and Takeo Hoshi of Stanford, offers a detailed examination of one part of Mr. Abe’s program: a pledge to boost Japan’s position in the World Bank’s “Doing Business Ranking,” which assesses the “ease of doing business” in various countries around the world. Japan currently ranks 15th among 31 high-income countries in the Organization for Economic Cooperation and Development. Mr. Abe’s goal is to hit the top three by 2020. The authors identify 27 changes, mainly fairly narrow, that could get him there.

---

If Abe cannot get these relatively easy reforms done in the next 12 months, "Abenomics" is finished.

 
It is precisely this way of thinking that has kept Japan from re-engineering its economy. The basics of management: dispose of underperforming assets, invest in growth assets. I was hopeful when Nomura stepped up to the plate to buy Lehman Bros' Asian operations, but my understanding is that the integration has not gone so well. Any insight on that from the Japanese press, @Nihonjin1051 ?

A couple of articles to add to the mix as a follow-up to my last comment. I will try and highlight only the key sections to save the reader some time:

1) Bolstering Japan’s ROE, Military and Financial
...Mr. Abe argues that longstanding Japanese traditions now must be changed, whether it’s a management culture that favors many stakeholders over shareholders, or a pacifism that seems impervious to new threats in the region.

...
But the farmers protesting Japan’s entry into a pan-Pacific free-trade pact have also been vociferous about the threat to their way of life. The Keidanren big business lobby has, behind the scenes, been fervent in arguing that Japan, unlike virtually every other advanced economy, doesn’t necessarily need independent directors on corporate boards. Even some institutional investors have argued that a focus on higher corporate ROE could erode social stability if companies forced to seek higher profits lay off workers, challenging Japan’s lifetime employment model.

The Abe counterargument: Japan has no choice. Japanese companies in listed on the first section of the Tokyo Stock Exchange had an average ROE of 6% from 2003 through 2013, compared with 12.6% for those in the MSCI World index, according to Bloomberg. That may have been fine for a time when Japan could rely on tolerant domestic capital for growth. It seems less viable if domestic companies need to turn more to global investors.

2) Boosting Japan’s Growth: Some Low-Hanging Fruit
Many parts of Prime Minister Shinzo Abe’s new growth strategy will be difficult to implement. That’s why he has called himself a “drill bit” poised to “break through the solid rock of vested interests.” It’s why some of the most significant proposals were, to mix metaphors, watered down before announcement. If it were easy to remove the impediments to Japanese growth, it would have been done long ago.

But there are actually a number of quick bureaucratic reforms the government could enact that could make a big difference for Japanese commerce. For example, “elimination of the requirement for company seal and judicial scrivener to complete the registration procedure” to start a new business “can be done without changing any existing law,” says a new working paper from Stanford University’s Japan Studies Program. “Moreover, these reforms are not likely to face much political resistance because the benefactors of the regulations (seal makers and judicial scriveners in this example) are not known for their political clout.”

The study, by economists Jamal Ibrahim Haidar of the Paris School of Economics and Takeo Hoshi of Stanford, offers a detailed examination of one part of Mr. Abe’s program: a pledge to boost Japan’s position in the World Bank’s “Doing Business Ranking,” which assesses the “ease of doing business” in various countries around the world. Japan currently ranks 15th among 31 high-income countries in the Organization for Economic Cooperation and Development. Mr. Abe’s goal is to hit the top three by 2020. The authors identify 27 changes, mainly fairly narrow, that could get him there.

---

If Abe cannot get these relatively easy reforms done in the next 12 months, "Abenomics" is finished.

Ah yes, i think that was a bad move, considering what happened to Lehman Brothers , in the end. In my opinion, Nomura would have done better to consider Lehman brother's SEC litigation history. But then again, $225 million is a minor cost for Nomura Holdings. Thanks for the links @LeveragedBuyout . It is with expectation that I will be following our economic development.
 
Back
Top Bottom