News On Japan
All the latest news on Japan



Japan must be ready to expand stimulus: IMF official (Feb 3)
The Bank of Japan (BOJ) should be ready to expand monetary stimulus and intervention is an option if the yen moves excessively, an IMF official said in Tokyo. "Intervention could be an option," if yen moves are too large, Naoyuki Shinohara, a deputy managing director, said yesterday. "Japan's economy has many downside risks, so depending on the circumstances, the BOJ should always be ready to expand quantitative easing." The central bank kept its asset-buying fund at ￥20 trillion (US$260 billion) and its credit-lending program at ￥35 trillion on Jan. 24 while cutting its forecast for the nation's growth. A yen near post World War II highs against the US dollar is eroding exporters' profits just as faltering global growth undermines demand, with Panasonic Corp yesterday forecasting a record loss for the 12 months ending March. (Taipei Times)


If Japan is our worst-case scenario, we're all right (Feb 3)
In 1991, former MIT dean Lester Thurow wrote that "If one looks at the last 20 years, Japan would have to be considered the betting favorite to win the economy honors of owning the 21st century." He wasn't alone. The standard view of the 1980s held that Japan's sway over the world economy was unbreakable. Its economy grew faster. Its corporations were more efficient. Its workers more productive. In 1988, former Reagan official Clyde Prestowitz warned: "The American century is over. The big development in the latter part of the century is the emergence of Japan as a major superpower." Such comments are now ridiculed relentlessly by analysts and commentators, including myself. Japan, after all, did not boom. Far from overtaking the United States, its economic growth stagnated for two decades, its stock and housing markets collapsed, and its government entombed itself in debt. Twenty years ago, Japan was synonymous with the phrase "juggernaut." Today, it's often seen next to the phrase...


Detroit automakers say 'no' to Japan joining trade talks (Feb 3)
Detroit automakers are urging President Barack Obama to reject Japan's bid to join talks on a regional free trade agreement, the head of an automotive group representing GM, Ford and Chrysler said on Thursday. "Adding Japan to the Trans-Pacific Partnership negotiations will lengthen those negotiations ... by years and perhaps keep them from ever coming to fruition," Matt Blunt, president of the American Automotive Policy Council, told Reuters. While Detroit automakers support Obama's goal of creating a free trade pact in the Asia Pacific, they do not believe U.S. negotiators can dismantle "non-tariff" measures Japan has long used to keep U.S. autos out of its market, said Blunt, a former Republican governor of Missouri whose father is a U.S. senator. (Reuters)


As red ink flows, Japanese firms struggle to keep manufacturing at home (Feb 3)
Following the report of Japan's first annual trade deficit in more than 30 years, the country's major manufacturers have been delivering earnings results soaked in red ink. The factories that once powered the economy by churning out world-beating electronics, cars, and machinery are either being relocated overseas or losing out to Asian rivals. Japan will now have to come to terms with a new post-industrial economy that will see it increasingly rely on income from overseas investments. Japan recorded a trade deficit of nearly 2.5 trillion yen ($32 billion) in 2011 as a storm literally battered its industries. The March tsunami destroyed factories, ports, and infrastructure, disrupting supply chains across the country and the globe. (csmonitor.com)


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


Nuclear crisis bolsters Japan push for utilities reform (Feb 1)
Mayor Nobuto Hosaka had more than saving taxpayers' money on his mind when he recently invited bids from rivals of giant utility Tokyo Electric Power Co to supply power to his ward in Japan's capital. Hosaka, like other advocates of reform, hopes altered public sentiment after the nation suffered the world's worst nuclear crisis in a 25 years will spur reforms of an electricity oligopoly dominated for decades by regional utility fiefdoms. "Doing this will reduce our electricity costs," said Hosaka, a former lawmaker from a tiny left-leaning party who now runs a area of Tokyo that is home to some 800,000 people. "But the reason this attracted so much attention was that until now, the voices of ordinary users -- the people, residents of the ward, businesses -- have not been heard," he told Reuters. (Reuters)


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


A worrisome trade deficit (Jan 30)
Japan's trade balance went into the red in 2011 - the first since 1980 when soaring oil prices caused a trade deficit. But the current account balance is still in the black thanks to income generated by Japan's overseas net assets amounting to some ¥250 trillion. This money is reinvested overseas to generate further income. Still, utmost care must be taken to prevent trade deficits from becoming a regular feature of the Japanese economy. In 2011, Japan's exports decreased 2.7 percent from 2010 to ¥65.554 trillion - the first dip in two years. Behind the fall were such factors as the serious damage inflicted on supply chains by the March 11 disasters and a slowdown of the world economy caused by the sovereign debt crises in Europe. Japan's car exports declined 10.6 percent and exports of electronic parts by 14.2 percent. (Japan Times)


Japan's pension problem (Jan 30)
In its manifesto for the 2009 Lower House election, the Democratic Party of Japan proposed introducing a minimum monthly pension of ¥70,000 or more. In their recent outline for tax and social welfare reforms, the government and the party only stated that they will submit a proposal for a minimum pension of about ¥70,000 to the Diet in 2013. They should make serious efforts to flesh out their proposal, which lacks concrete details. The 2009 manifesto called for unifying existing pension schemes and having all people participate in the same pension scheme. Everyone would be entitled to a minimum monthly pension of ¥70,000 or more, which would be funded by the consumption tax. (Japan Times)


In disparity-ridden Japan, don't mind the gaps - just get out of them (Jan 29)
When the term kakusa shakai came into vogue in 2006 - a fairly self-explanatory expression given that kakusa means "gap" or "disparity," and shakai means "society" - it was a clear sign of Japanese people having finally recognized that the notion of theirs being a hope-filled nation of upwardly mobile middle-class people was a myth. In fact, being a highly stratified country, Japan has always been riddled with gaps. And its social strata, like layers of rock from different eras piled on top of each other, don't readily mix with each other. It takes something on the seismic scale of the 1868 Meiji Restoration, which marked the overthrow of centuries of military government under the Tokugawa Shogunate, and the social revolution of the latter half of the 19th century, to dislodge and remix the strata. (Japan Times)