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[ahfatzia]

Analysis: Japan's new cabinet likely to be long on loyalty, short on reform

(Reuters) - Incoming Japanese Prime Minister Shinzo Abe's cabinet looks likely to be heavy on close allies, with a few party rivals added to fend off criticism of cronyism, but few see signs that the line-up will produce creative reform policies.

Abe, who will be voted in as prime minister on Wednesday following his conservative Liberal Democratic Party's (LDP) sweeping election win, has made clear his top priority is to slay deflation with a huge dose of monetary easing and spending.

To assist with that task, the 58-year-old Abe, who served as premier from 2006-2007, will tap former prime minister Taro Aso as finance minister and ex-trade minister Akira Amari for a new "Economic Revival" portfolio, Japanese media reported this week.

Both are close allies who share Abe's affection for reflationary policies, including heavy pressure on the Bank of Japan to take more drastic action to beat deflation.

Bowing to such pressure, the central bank on Thursday delivered its third shot of monetary stimulus in four months and signaled it might set a higher inflation target at its January meeting.

"It's deja vu all over again," said Brad Glosserman, executive director of the Honolulu-based Pacific Forum CSIS think tank. "He (Abe) is a real Japanese economic traditionalist - inflate the economy to try to get growth but don't try anything that will upset the proverbial apple cart."

Among the changes Abe is not expected to tackle swiftly, if at all, are deregulation of sectors such as child-care, medical care, the labor market and agriculture, and participation in a U.S.-led trade pact. Vital reform of the creaking social welfare system is likely to be put off at least until after a July election for parliament's upper house.

Loyal Abe backer Yoshihide Suga is expected to become chief cabinet secretary, a key post combining the job of top government spokesman with coordinating among ministries.

Others who share Abe's agenda to revise the pacifist constitution and rewrite Japan's wartime history with a less apologetic tone have also been floated for posts. Abe may, however, put contentious issues that could upset China and South Korea on the backburner to concentrate on the economy.

"He's not dumb. He has learned the obvious lesson that he has to pay attention to the economy first," Glosserman said. "He can't afford a crazy conservative jihad because he knows the public is not behind him."

"TEAM ABE"

Sensitive to criticism that his first administration was loaded with chums rather than competent ministers, Abe is also expected to pick rivals and some elders to season his lineup, domestic media said.

Among the names floated are former LDP leader Sadakazu Tanigaki, 67, a softspoken fiscal conservative whom Abe replaced in September; Yoshimasa Hayashi, 51, a former defense minister and economic policy expert; and Nobuteru Ishihara, 55, a former LDP No. 2. The latter two lost to Abe in the September leadership race. Though political rivals to Abe, none of the three have reputations as proponents of bold structural reforms.

Abe ended his first term as prime minister by abruptly quitting in 2007 after a troubled year plagued by scandals in his cabinet, public outrage over lost pension records and the LDP's big defeat in an election for parliament's upper house. He later cited ill health as the reason for resigning.

"Hopefully, he's learned his lesson and 'Team Abe' will be better than last time," said Jeffrey Kingston, director of Asian studies at Temple University's Japan campus. "He's got a deep hole to climb out of and the LDP is reverting to form."

Abe has also said he would revive the Council on Economic and Fiscal Policy (CEFP), a government advisory body that had lain dormant under the outgoing Democratic Party of Japan (DPJ). Maverick LDP Prime Minister Junichiro Koizumi used the body to push through a privatization and deregulation agenda during his 2001-2006 term, but so far the focus this time has been on a revived CEFP as a venue for the government to pressure the BOJ.

Under Abe, the LDP back-pedaled on Koizumi-style reform. One of Abe's early moves as premier in 2006 was to welcome back to the party defectors who had rebelled against Koizumi's pet project of postal system privatization.

Signs of appetite for deregulation and structural reform now are few. A Kyodo news agency survey showed that more than 84 percent of LDP lawmakers elected on Sunday opposed Japan joining a U.S.-led trade pact, the Trans-Pacific Partnership (TPP).

"If you look at the seats (in parliament), 40 percent are urban and 60 percent are non-urban. Are we really going forward with TPP or economic reform? That's not so easy," said Robert Feldman, chief economist at Morgan Stanley MUFG Securities in Tokyo. "The question is whether Abe will have the fortitude and guts and energy and bull-headedness to push through (reforms)."

Analysis: Japan's new cabinet likely to be long on loyalty, short on reform | Reuters

 

[ahfatzia]

Sony says China business has recovered, foresees growth

Sony china President Nobuki Krita


(Reuters) - Sony Corp's business in China has "more or less" returned to levels seen before recent protests against Japan's actions over a group of disputed islands, the Japanese company's China chief, Nobuki Kurita, told reporters on Tuesday.

Calls for boycotts of Japanese products broke out across China in September after Japan nationalized two of a group of disputed East China Sea islands, known as the Diaoyu in Chinese and the Senkaku in Japanese, by purchasing them from their private owners.

The spat plunged relations between Japan and China into a deep freeze and hit sales of Japanese goods in China. Kurita said, however, that Sony's China business would recover strongly in the coming three business years after a dip in the current one.

"My general impression is business conditions have more or less returned to the pre-crisis environment," he told a media briefing at a Sony store in eastern Beijing.

He saw sales in China falling 10 percent in the business year to next March from the previous year, but rebounding in the year to March 2013 and growing strongly in the two subsequent years.

Kurita declined to comment on what impact the election of the hawkish Shinzo Abe as Japan's new prime minister could have on Japan-China relations.

Abe has vowed not to back down on the island dispute, but still must balance that stance with the need for stable relations with China. Japanese media have reported that he will send a special envoy to China to mend ties.

"There's no market that has no risk," he said when asked about Japan-China relations.

"Our mandate is to maximize our business potential in any given situation."

Kurita said he expects Sony's business in emerging markets to grow about 40 percent from the current level to reach some 2.6 trillion yen ($31 billion) in the business year ending in March 2015. China would account for "a good chunk" of that growth, he said.

Sony says China business has recovered, foresees growth | Reuters

 

[ahfatzia]

Russia unveils US$25 billion oil pipeline to Pacific


MOSCOW -- Russian President Vladimir Putin unveiled the final extension of a new US$25 billion oil pipeline to the Pacific that underscores the energy power's gradual shift away from stagnant European markets.

The East Siberia-Pacific Ocean (ESPO) link is also expected to expand sales to the United States and fulfill Putin's dream of cementing Russia's place as a dominant force on international crude markets.

Moscow hopes to make ESPO into a benchmark in the Asia-Pacific region that competes with WTI — the U.S. oil standard whose price some traders believe is too heavily based on domestic political factors.

But analysts worry that Russia may currently lack enough accessible oil in its underdeveloped East Siberia fields to keep the line fully flowing despite strong demand in China and Japan.

Putin brushed those concerns aside as he joined in the ribbon-cutting ceremony by video link from the Far East city of Khabarovsk.

“By completing the second leg, our potential is expanding,” Putin said in televised remarks.

“This is a serious event.”

The second leg of the 4,200-kilometer (2,600-mile) pipeline runs from fields west of Lake Baikal to the Pacific port of Kozmino near the northeastern edge of China.

The port — previously connected to East Siberian crude by rail — also provides Russia with quick access to Japan and South Korea.

But the head of the Transneft state oil pipeline operator said most of the crude from the final leg would in fact be destined for the United States.

“The American market will receive 35 percent of Kozmino oil,” Nikolai Tokarev said at the opening ceremony in comments reported by the company's website.

“Around 30 percent will go to Japan and 28 percent to China. The rest will go to Singapore, Malaysia and South Korea.”

Russia has repeatedly tried and failed to make meaningful inroads on the U.S. crude and natural gas markets.

Its gas sales never materialized after the North American shale revolution made both Canada and the United States effectively self-sufficient.

Analysts also point out that U.S. oil production is expanding at rates that should soon see the country outpace Russia and Saudi Arabia in the next few years.

But Transneft's Tokarev appeared to be placing his bets on this region as he laid to waste the idea of offering Europe any assurances that the continent could continue to rely on Russian oil.

“We do not owe a single EU country a thing, and we certainly not obligated to account for ourselves,” RIA Novosti quoted Tokarev as saying.

“If they (EU nations) want to hold a normal, proper conversation, they should change their approach to such a dialogue.”

Russia unveils US$25 billion oil pipeline to Pacific - The China Post

 

[ahfatzia]

Nationalism takes back seat to the economy

A new day: A lawmaker bows before passing through the gates to the Diet building Wednesday morning


The lineup of Prime Minister Shinzo Abe's Cabinet seems to underline his determination to learn from his mistakes.

During his first run as prime minister from 2006 to 2007, Abe concentrated mainly on diplomacy and patriotism, even though the public was clearly focused on issues related to their livelihoods, such as the pension system and the postal reforms achieved by his popular predecessor, Junichiro Koizumi.

As a consequence, the Liberal Democratic Party was crushed in the 2007 Upper House election, which eventually forced Abe to step down that year.

Five years later, media polls indicate the primary concerns of the voters are: the economy, the economy, and the economy.

With the Upper House election approaching in July, Abe this time around seems to be focusing on economic issues first by appointing most of his close aides and party heavyweights to the economic and financial posts.

Among them are Finance Minister Taro Aso, a former pr ime minister and advocate of public works spending, who has hinted he might delay the 2014 sales tax hike.

Abe has also created the new post of "economic revitalization minister" and given it to Akira Amari, one of his closest allies.

His hawkish diplomacy meanwhile seems to be on hold — at least for now. The new foreign and defense ministers — Fumio Kishida and Itsunori Onodera — are not regarded as outright hawks, choices that apparently reflect Abe's newfound efforts to soften his diplomatic profile and avoid more friction with Japan's neighbors, who still have memories of the war.

Indeed, Abe's comments repeatedly emphasize that his focus is on economic issues and the Upper House election.

"We are still under severe scrutiny by voters. We need to make our achievements one by one," Abe told his party during a general meeting Wednesday morning. "Our struggle will continue until" the election in July, Abe said.

But giving priority to the economy does not mean Abe has given up his long-time dream of reviving the "conservative" nationalism that he says was lost in the postwar years.

This is reflected by his selection of education minister Hakubun Shimomura, Public Security Commission Chairman Keiji Furuya and administrative reform minister Tomomi Inada, who are all known for their nationalistic outlooks and calls to revise public education.

Newly appointed LDP policy chief Sanae Takaichi is also a conservative who is still fond of making visits to war-related Yasukuni Shrine.

Yoshiyuki Inoue, who was Abe's top secretary and closest aide during his previous stint as prime minister, said Chief Cabinet Secretary Yoshihide Suga will be the critical link in the decision-making process for the entire Cabinet.

"The Cabinet members are all competent, so whoever plays the role of coordinator will be very important," Inoue said, while observing that the Cabinet picks reflect Abe's expectations for the poll.

While Abe insists he didn't pay attention to intraparty politics when forming the Cabinet, it appears that he carefully tried to head off any possibility of a rebellion.

In addition to Aso, Nobuteru Ishihara and Sadakazu Tanigaki — the new environment and justice ministers — are faction leaders.

And Abe was also careful to give three of his four rivals in the presidential election, including Ishihara, key posts in the Cabinet or the party: Yoshimasa Hayashi became farm minister and Shigeru Ishiba secretary general.

Nationalism takes back seat to the economy | The Japan Times Online

 

[kawaraj]

Abe is facing a hard road though.... Japanese economy is posed for a restart.

 

[ahfatzia]

For the first time in more than a half century.......


N.Korea leader calls for easing of tensions with S.Korea

A new year message from Kim, the supreme leader of North Korea, to his people


SEOUL: North Korean leader Kim Jong-Un called Tuesday for an easing of tensions with the South and flagged a "radical turnabout" in the national economy in a rare voiced message broadcast on state television.

"An important issue in putting an end to the division of the country and achieving its reunification is to remove confrontation between the North and the South," Kim said in a New Year's message.

"The past records of inter-Korean relations show that confrontation between fellow countrymen leads to nothing but war," he said.

The message came just weeks after the election of the conservative Park Geun-Hye as South Korea's new president and coincided with UN Security Council discussions on how to punish North Korea for its recent long-range rocket launch.

The voiced message was the first of its kind since Kim's grandfather and North Korean founder Kim Il-Sung delivered one in 1994, the year of his death.

Kim Jong-Un, who took power after the death of his father Kim Jong-Il on December 17, 2011, also said 2013 would be a year of "great creations and changes in which a radical turnabout will be effected."

"'Let us bring about a radical turn in the building of an economic giant with the same spirit and mettle as were displayed in conquering space!' -- this is the fighting slogan our Party and people should uphold this year," he said.

N.Korea leader calls for easing of tensions with S.Korea - Channel NewsAsia


.....and I hope this is not a political ploy.

 

[ahfatzia]

Japan PM Abe wants to replace landmark war apology - paper

TOKYO - Japanese Prime Minister Shinzo Abe wants to replace a landmark 1995 apology for suffering caused in Asia during World War Two with an unspecified "forward-looking statement", a newspaper reported on Monday.

Abe, a hawkish conservative who is known to want to recast Japan's position on its wartime militarism in less apologetic tones, led his party to a landslide victory in a Dec. 16 election.

He outlined his intention to restate Japan's position in an interview with the conservative Sankei newspaper, but he did not give details.

Any hint that Japan is back-tracking from the 1995 apology, issued by then Prime Minister Tomic Murayama, is likely to outrage neighbours, particularly China and North and South Korea, which endured years of brutal Japanese rule.

"The Murayama statement was a statement issued by Socialist Party Prime Minister Tomiichi Murayama," Abe was quoted as saying in an interview with the conservative Sankei newspaper published on Monday.

"I want to issue a forward-looking statement that is appropriate for the 21st century," he said.

Abe said he would consult experts about the details and the timing of statement.

He has also said he wants to loosen the constraints of Japan's post-war pacifist constitution.

Abe hails from a wealthy political family that includes a grandfather, Nobusuke Kishi, who was a wartime cabinet minister who was imprisoned but never tried as a war criminal after the war. He went on to become prime minister from 1957 to 1960.

First elected to parliament in 1993 after the death of his father, a former foreign minister, Abe rose to national fame by adopting a tough stance toward North Korea in a dispute over Japanese citizens kidnapped by North Korea decades ago.

More recently, he has promised not to yield in a territorial row with China over tiny islands in the East China Sea - known as the Senkaku in Japan and the Diaoyu in China - and boost defence spending to counter China's growing influence.

During a first stint as prime minister, which began in September 2006 and lasted a year, Abe pushed through a parliamentary revision of an education law to "restore patriotism" in school curriculums.

Japan PM Abe wants to replace landmark war apology - paper


Wrong signal again?

 

[ahfatzia]

Japan spurs talk of currency war

Japan has come under fire this week for policies that critics say deliberately devalue the yen, but analysts say fears of an outright currency war are overblown.

The political rhetoric became heated after the Bank of Japan announced plans to make open-ended asset purchases in an effort to re-inflate the Japanese economy, which recently slipped into recession.

Jens Weidmann, president of Germany's central bank, criticized the BoJ for caving under pressure from newly elected prime minister Shinzo Abe. Weidmann warned that the bank risks losing its independence, which could lead to a "politicization of exchange rates."

Akira Amari, Japan's economy minister, quickly pushed back.

In an interview with the Financial Times Wednesday, Amari said Germany has benefited from the fixed exchange rate maintained by the European Central Bank. "He's not in a position to criticize," said Amari of Weidmann.

The Japanese yen has lost about 12% of its value versus the U.S. dollar since October as investors in the currency market anticipated more easing from the BoJ. But the yen has rebounded in the days since the BoJ's announcement, which wasn't as drastic as some had feared.

"The Japanese yen is continuing to trade higher following the outcome of the BoJ meeting, which seemingly gave the appearance of easing without really doing very much," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman.

Japan has stressed that it's not deliberately trying to devalue its currency, saying the yen's decline has more to do with a market correction following a period of strength.

But the fact remains that a weaker yen, which makes Japanese goods more competitive on the global market, is a boon for Japan's export-driven economy.

Japan spurs talk of currency war - Jan. 23, 2013