Japan Economy Forum

[LeveragedBuyout]

First, investing through anime, now tourism promotion through anime?

---

Embassy of Israel Releases Promotional Anime - Japan Real Time - WSJ

• 

• October 29, 2014, 2:53 PM JST

Embassy of Israel Releases Promotional Anime


ByJohn D'Amico
The Embassy of Israel in Japan unveiled an unexpected promotional effort yesterday: an online anime series.

Running in a series of seven installments on the embassy’s official YouTube channel, the anime with a comedic touch” will introduce facts about Israel to Japanese viewers, according to the project announcement. It features the adventures of two sisters, Saki and Noriko, as they explore Israel on vacation. Also making an appearance is the embassy’s official anime mascot, Shalom-chan, a parrot adorned with the Star of David and carrying an olive branch. Shalom-chan “is working hard for world peace as Israel’s goodwill ambassador,” the mascot’s official biography states.

In the first episode, the two sisters touch down at Ben Gurion Airport and get a taste of city life. The younger sister, who at first thought Israel was nothing but desert, is won over by the modernity, safety, and good wine of the country. It turns out, however, that the elder sister is having some trouble in her marriage, ending the episode with a note of foreboding.

Throughout the episode, Shalom-chan provides facts about Israel, ranging from basic information about population to the popularity of Japan in Israel. The embassy used the company Manganimation to produce the videos. According to data from Israel’s Central Bureau of Statistics, so far just under 10,000 Japanese have visited Israel as tourists this year.

Reaction online to the video seems mixed.

https://twitter.com/x/status/527227812223012865

"Watching the anime produced by the Israeli Embassy I got really angry."

https://twitter.com/x/status/527088199793786880

Others took to parody, copying the opening line of the video "Let's go to Israel!" but pairing it with a quite different picture.

https://twitter.com/x/status/526967688313049088

"The promotional anime made by the Israeli Embassy was surprisingly interesting. I look forward to its continuation."

 

[Aepsilons]

First, investing through anime, now tourism promotion through anime?

---

Embassy of Israel Releases Promotional Anime - Japan Real Time - WSJ

• 

• October 29, 2014, 2:53 PM JST

Embassy of Israel Releases Promotional Anime


ByJohn D'Amico
The Embassy of Israel in Japan unveiled an unexpected promotional effort yesterday: an online anime series.

Running in a series of seven installments on the embassy’s official YouTube channel, the anime with a comedic touch” will introduce facts about Israel to Japanese viewers, according to the project announcement. It features the adventures of two sisters, Saki and Noriko, as they explore Israel on vacation. Also making an appearance is the embassy’s official anime mascot, Shalom-chan, a parrot adorned with the Star of David and carrying an olive branch. Shalom-chan “is working hard for world peace as Israel’s goodwill ambassador,” the mascot’s official biography states.

In the first episode, the two sisters touch down at Ben Gurion Airport and get a taste of city life. The younger sister, who at first thought Israel was nothing but desert, is won over by the modernity, safety, and good wine of the country. It turns out, however, that the elder sister is having some trouble in her marriage, ending the episode with a note of foreboding.

Throughout the episode, Shalom-chan provides facts about Israel, ranging from basic information about population to the popularity of Japan in Israel. The embassy used the company Manganimation to produce the videos. According to data from Israel’s Central Bureau of Statistics, so far just under 10,000 Japanese have visited Israel as tourists this year.

Reaction online to the video seems mixed.

https://twitter.com/x/status/527227812223012865

"Watching the anime produced by the Israeli Embassy I got really angry."

https://twitter.com/x/status/527088199793786880

Others took to parody, copying the opening line of the video "Let's go to Israel!" but pairing it with a quite different picture.

https://twitter.com/x/status/526967688313049088

"The promotional anime made by the Israeli Embassy was surprisingly interesting. I look forward to its continuation."

This is just so wonderful to see, the development, blossoming of Israeli-Japanese (just like the alphabet, lol) relations. It is only natural that Israel cooperate not only in matters of politics, but also military defense, cultural and people to people relations. The JCJ (Jewish Community of Japan) should be utilized by the Japan Government to broaden relations between the two countries. Relations are already strong, but it can be even stronger.

 

[Aepsilons]

Excellent update !


Japan factory output jumps, but Abe needs more to cement tax plan

(Reuters) - Japan's industrial output rose at the fastest pace in eight months in September, but analysts say the economy would need to show more signs of a durable recovery before the government can confidently proceed with plans for a second sales tax hike.

The 2.7 percent rise in factory output topped economists' median estimate of a 2.2 percent gain, led by demand for cars and smartphones, the trade ministry's data showed, following a 1.9 percent drop in August.

The upbeat report comes on the heels of government data on Tuesday showing retail sales rose for the third straight month in September - evidence the economy may be finally gaining traction after slumping on the back of an April sales tax hike .




Still, doubts remain whether Prime Minister Shinzo Abe could proceed with a second increase in the sales tax planned for October 2015, with markets continuing to speculate the Bank of Japan or the government would offer additional stimulus to safeguard a fragile recovery.

"The outlook is not so bright. Final domestic demand is unlikely to rebound as it takes time for private consumption to recover given deterioration in job-related indicators," said Hiromichi Shirakawa, chief economist at Credit Suisse in Tokyo.

"Prospects for external demand have not improved either. China's domestic demand is slowing and U.S. ISM (manufacturing activity index) suggests that global output is likely to slow in January-March."

Many analysts hope Abe will decide in December to proceed with the planned tax hike next year, but expect such a decision to be accompanied by plans for fresh stimulus measures. Markets fear that dithering over the tax plan could undermine confidence in Japan's public finances and hit the economy hard.

The BOJ, however, is in mood to ease policy again anytime soon.

At its policy review on Friday the central bank is expected to slash its growth projections but stick to its rosy view that the economy is on track to meet a 2 percent inflation target sometime next year - a prediction seen as unrealistic by many analysts.

The April sales tax hike to 8 percent from 5 percent drove the world's third-biggest economy into its deepest quarterly slump since the 2009 global financial crisis in the second quarter. Since then, a run of weak data has cast doubt about Abe's plans for the second tax increase, seen as a key in government efforts to contain Japan's heavy debt load.

SHAKY GLOBAL ECONOMY

Factory activity has been languishing since the April tax hike, which dampened demand for cars and housing construction, leaving companies saddled with a pile of inventories of unsold goods.

Cooling global growth may also weigh on external demand and factory output, particularly with a slowdown in China and the threat of recession in Europe complicating Abe's strategy to reflate the economy and quash deflation.

Highlighting the growing global risks, Sweden's central bank cut interest rates more than expected to zero on Tuesday to ward off prolonged deflation risk.

The uncertainty was reflected in Japanese manufacturers' outlook, with the ministry's survey showing they expected output to fall 0.1 percent in October but increase 1.0 percent in November.

"Companies are entering a stage where it needs to adjust inventories and production. We'll closely watch how long this adjustment will last," said a trade ministry official. The ministry notched up its view of industrial output, saying it is "seesawing", from the previous description that it was weakening.

Other key indicators for September due this week are also likely to show falling household spending, slowing consumer inflation and a rising jobless rate.

The government plans to raise the sales tax to 10 percent in October 2015 in a bid to fund bulging welfare costs and rein in mammoth public debt that at twice the size of the economy is by far the worst in the industrial world.

Analysts polled by Reuters forecast the economy would grow an annualised 2.9 percent in the third quarter, after an annualised 7.1 percent slump in the prior three months.

Some analysts believe the economy may have enough momentum to absorb the second sales tax increase, though concede the decision may not be straight forward.

"I think economic growth in the third quarter will be strong enough to allow for another sales tax hike, but it all depends on how confident the politicians are about the economy," said Norio Miyagawa, senior economist at Mizuho Securities Research & Consulting Co.


Japan factory output jumps, but Abe needs more to cement tax plan | Reuters

 

[Raphael]

Last Chance for Japan? by Stephen S. Roach - Project Syndicate

NEW HAVEN – Japan is the petri dish for the struggle against the secular stagnation that is now gripping most major developed economies. And, notwithstanding all of the fanfare surrounding “Abenomics,” Japan’s economy remains moribund. In the six quarters of Shinzo Abe’s latest stint as prime minister, annualized real GDP growth has averaged just 1.4% – up only slightly from the anemic post-1992 average of 1%.

Abenomics, with its potentially powerful combination of monetary and fiscal stimulus, coupled with a wide array of structural reforms, was supposed to end Japan’s “lost decades.” All three “arrows” of the strategy were to be aimed at freeing the economy from a 15-year deflationary quagmire.

Unfortunately, not all of the arrows have been soaring in flight. The Bank of Japan seems well on its way to delivering on the first one – embracing what it calls quantitative and qualitative easing (QQE). Relative to GDP, the BOJ’s monetary-policy gambit could actually far outstrip the efforts of America’s Federal Reserve.

But the flight of the other two arrows is shaky, at best. In recent days, Abe has raised serious questions about proceeding with the second phase of a previously legislated consumer-tax hike that has long been viewed as the linchpin of Japan’s debt-consolidation strategy. Abe has flinched because the economy remains weak, posing renewed risks of a deflationary relapse. Meanwhile, the third arrow of structural reforms – especially tax, education, and immigration reforms – is nowhere near its target.

Abenomics, one might conclude, is basically a Japanese version of the failed policy combination deployed in the United States and Europe: massive unconventional liquidity injections by central banks (with the European Central Bank apparently now poised to follow the Fed), but little in the way of fundamental fiscal and structural reforms. The political expedience of the short-term monetary fix has triumphed once again.

Such a gamble is especially problematic for Japan. With an aging – and now declining – working-age population, it has limited scope for reviving growth. Japan must either squeeze more out of its existing workforce by boosting productivity, or uncover new sources of demand at home or abroad.

At home, that could mean adding workers, either by boosting female participation in the work force, which, at 63%, is among the lowest in the developed world, or relaxing immigration restrictions. Unfortunately, there has been little progress on either front. Moreover, even if the political will to launch third-arrow structural reforms were suddenly to strengthen – a dubious proposition – any productivity payback would most likely take a long time to materialize.

That leaves external demand, which underscores what is perhaps Abenomics’ most serious strategic flaw: It does not take into consideration some of the biggest changes that are likely to occur in the global economy. That is a great pity, because Japan is well positioned to take advantage of one of the most powerful global trends – the coming rebalancing of the Chinese and US economies.

China appears to be more committed to restructuring than the US – at least for the foreseeable future. Its Third Plenum reforms provide a cohesive framework for a pro-consumption transformation. Though America currently remains intent on resurrecting a tired growth model, there is good reason to hope that it, too, will eventually rebalance.

Japan cannot afford to squander these opportunities. As the main driver of Chinese growth shifts from external to domestic demand, who could benefit more than Japanese exporters? China is already Japan’s largest export market, leaving it ideally situated to capture additional market share in the coming surge of Chinese demand for consumer products and services.

Likewise, Japan stands to benefit from its technological prowess in environmental remediation – an urgent priority for China in the years ahead. Japan already has great expertise in many of the solutions to some of China’s toughest problems.

Japan is also likely to gain from a long-overdue rebalancing of the US economy. A shift in the US – from excessive consumption of goods largely sourced in low-wage developing countries to the capital equipment that an increasingly investment-led economy will require – would play to Japan’s greatest strengths. As a global leader in sophisticated machinery and the earth-moving equipment needed for infrastructure investment, Japan should be able to to seize these opportunities.

In looking to external demand, Japan should not lose sight of its earlier achievements. In the 1970s and 1980s, Japan was the envy of the world, owing to an all-powerful export machine that tapped the demand of a rapidly growing global economy. “Japan, Inc.” still has a good institutional memory of what it takes to draw support from external demand.

It is time to recapture that memory. Failure to do so would leave Japan, the world’s third largest economy, at risk of being further marginalized by transformations in the world’s two largest, the US and China.

There is one obvious and important caveat: Poor Sino-Japanese relations, owing to unresolved historical grievances, could prevent Japan from realizing the economic benefits implied by China’s economic rebalancing.

The interplay between economics and politics lies at the heart of the rise and fall of great powers. In a rapidly changing world, underscored by likely shifts in the economic structure of China and the US, Japan cannot afford to lose sight of that fact. Just as the US and China have much to gain by transforming their economies, Japan is running out of time. In the grip of two lost decades and counting, this could be Japan’s last chance.

 

[LeveragedBuyout]

Last Chance for Japan? by Stephen S. Roach - Project Syndicate

NEW HAVEN – Japan is the petri dish for the struggle against the secular stagnation that is now gripping most major developed economies. And, notwithstanding all of the fanfare surrounding “Abenomics,” Japan’s economy remains moribund. In the six quarters of Shinzo Abe’s latest stint as prime minister, annualized real GDP growth has averaged just 1.4% – up only slightly from the anemic post-1992 average of 1%.

Abenomics, with its potentially powerful combination of monetary and fiscal stimulus, coupled with a wide array of structural reforms, was supposed to end Japan’s “lost decades.” All three “arrows” of the strategy were to be aimed at freeing the economy from a 15-year deflationary quagmire.

Unfortunately, not all of the arrows have been soaring in flight. The Bank of Japan seems well on its way to delivering on the first one – embracing what it calls quantitative and qualitative easing (QQE). Relative to GDP, the BOJ’s monetary-policy gambit could actually far outstrip the efforts of America’s Federal Reserve.

But the flight of the other two arrows is shaky, at best. In recent days, Abe has raised serious questions about proceeding with the second phase of a previously legislated consumer-tax hike that has long been viewed as the linchpin of Japan’s debt-consolidation strategy. Abe has flinched because the economy remains weak, posing renewed risks of a deflationary relapse. Meanwhile, the third arrow of structural reforms – especially tax, education, and immigration reforms – is nowhere near its target.

Abenomics, one might conclude, is basically a Japanese version of the failed policy combination deployed in the United States and Europe: massive unconventional liquidity injections by central banks (with the European Central Bank apparently now poised to follow the Fed), but little in the way of fundamental fiscal and structural reforms. The political expedience of the short-term monetary fix has triumphed once again.

Such a gamble is especially problematic for Japan. With an aging – and now declining – working-age population, it has limited scope for reviving growth. Japan must either squeeze more out of its existing workforce by boosting productivity, or uncover new sources of demand at home or abroad.

At home, that could mean adding workers, either by boosting female participation in the work force, which, at 63%, is among the lowest in the developed world, or relaxing immigration restrictions. Unfortunately, there has been little progress on either front. Moreover, even if the political will to launch third-arrow structural reforms were suddenly to strengthen – a dubious proposition – any productivity payback would most likely take a long time to materialize.

That leaves external demand, which underscores what is perhaps Abenomics’ most serious strategic flaw: It does not take into consideration some of the biggest changes that are likely to occur in the global economy. That is a great pity, because Japan is well positioned to take advantage of one of the most powerful global trends – the coming rebalancing of the Chinese and US economies.

China appears to be more committed to restructuring than the US – at least for the foreseeable future. Its Third Plenum reforms provide a cohesive framework for a pro-consumption transformation. Though America currently remains intent on resurrecting a tired growth model, there is good reason to hope that it, too, will eventually rebalance.

Japan cannot afford to squander these opportunities. As the main driver of Chinese growth shifts from external to domestic demand, who could benefit more than Japanese exporters? China is already Japan’s largest export market, leaving it ideally situated to capture additional market share in the coming surge of Chinese demand for consumer products and services.

Likewise, Japan stands to benefit from its technological prowess in environmental remediation – an urgent priority for China in the years ahead. Japan already has great expertise in many of the solutions to some of China’s toughest problems.

Japan is also likely to gain from a long-overdue rebalancing of the US economy. A shift in the US – from excessive consumption of goods largely sourced in low-wage developing countries to the capital equipment that an increasingly investment-led economy will require – would play to Japan’s greatest strengths. As a global leader in sophisticated machinery and the earth-moving equipment needed for infrastructure investment, Japan should be able to to seize these opportunities.

In looking to external demand, Japan should not lose sight of its earlier achievements. In the 1970s and 1980s, Japan was the envy of the world, owing to an all-powerful export machine that tapped the demand of a rapidly growing global economy. “Japan, Inc.” still has a good institutional memory of what it takes to draw support from external demand.

It is time to recapture that memory. Failure to do so would leave Japan, the world’s third largest economy, at risk of being further marginalized by transformations in the world’s two largest, the US and China.

There is one obvious and important caveat: Poor Sino-Japanese relations, owing to unresolved historical grievances, could prevent Japan from realizing the economic benefits implied by China’s economic rebalancing.

The interplay between economics and politics lies at the heart of the rise and fall of great powers. In a rapidly changing world, underscored by likely shifts in the economic structure of China and the US, Japan cannot afford to lose sight of that fact. Just as the US and China have much to gain by transforming their economies, Japan is running out of time. In the grip of two lost decades and counting, this could be Japan’s last chance.

Aww, I already posted this on the last page: Japan Economy News & Updates | Page 33

Do you have me on your ignore list? (I suppose a non-response would be an affirmative)

 

[Raphael]

Aww, I already posted this on the last page: Japan Economy News & Updates | Page 33

Do you have me on your ignore list? (I suppose a non-response would be an affirmative)

No of course not! I just didn't check the last page. No one has the stamina to carefully peruse a 34-page thread.

I don't have anyone on my ignore list, not least one of the more informed and contributive members here.

 

[Aepsilons]

Some sobering news, I'd say.


Hitachi's first-half net profit nearly triples

TOKYO —

Hitachi said Wednesday its net profit for the six months to September nearly tripled to 91.54 billion yen as it hiked its full-year earnings forecast.

The vast conglomerate said net profit was up from 32.77 billion yen a year earlier, as it pointed to a strong performance in its information technology and elevator divisions.

Operating profit rose about 23% to 214.02 billion yen on sales of 4.50 trillion yen, up 0.6%, said the company which sells everything from batteries to nuclear plants.

Hitachi also revised up its annual forecast.

It now expects a net profit of 250 billion yen on sales of 9.5 trillion yen, up from a previous outlook of 230 billion yen and 9.4 trillion yen, respectively.

Demand picked up for IT systems, electronic devices, and so-called social infrastructure such as elevators and trains, Hitachi said.

Strong demand for elevators and escalators in China helped results, Hitachi added, but it also warned that demand some parts of the world could be shaky.

“In terms of the overall global business environment going forward, the US economy will likely keep a steady recovery path while the global economy as a whole faces uncertainties,” it said in a statement.

“Risks pertaining to the European economy such as financial instability in southern Europe and the Ukraine crisis, a slowing growth in the Chinese economy, and geopolitical risks in the Middle East” may weigh on results.

Hitachi's first-half net profit nearly triples ‹ Japan Today: Japan News and Discussion

 

[LeveragedBuyout]

Some sobering news, I'd say.


Hitachi's first-half net profit nearly triples

TOKYO —

Hitachi said Wednesday its net profit for the six months to September nearly tripled to 91.54 billion yen as it hiked its full-year earnings forecast.

The vast conglomerate said net profit was up from 32.77 billion yen a year earlier, as it pointed to a strong performance in its information technology and elevator divisions.

Operating profit rose about 23% to 214.02 billion yen on sales of 4.50 trillion yen, up 0.6%, said the company which sells everything from batteries to nuclear plants.

Hitachi also revised up its annual forecast.

It now expects a net profit of 250 billion yen on sales of 9.5 trillion yen, up from a previous outlook of 230 billion yen and 9.4 trillion yen, respectively.

Demand picked up for IT systems, electronic devices, and so-called social infrastructure such as elevators and trains, Hitachi said.

Strong demand for elevators and escalators in China helped results, Hitachi added, but it also warned that demand some parts of the world could be shaky.

“In terms of the overall global business environment going forward, the US economy will likely keep a steady recovery path while the global economy as a whole faces uncertainties,” it said in a statement.

“Risks pertaining to the European economy such as financial instability in southern Europe and the Ukraine crisis, a slowing growth in the Chinese economy, and geopolitical risks in the Middle East” may weigh on results.

Hitachi's first-half net profit nearly triples ‹ Japan Today: Japan News and Discussion

Hitachi shows the way forward for Japan, Inc. Here's an excerpt from an article I read yesterday in the WSJ:

http://online.wsj.com/articles/hitachi-profit-rises-company-raises-full-year-outlook-1414579756

Like other Japanese companies confronting a stagnant domestic market with a shrinking population, Hitachi is moving to expand internationally. Overseas sales accounted for 47% of sales in the first half through Sep. 30, up by one percentage point from a year earlier. Mr. Nakamura said that Hitachi, after moving the headquarters of its rail business to London, would take other steps to decentralize its management.

In another move toward international norms—and a rejection of traditional Japanese corporate practice—Hitachi is shifting from a seniority-based compensation system for managers in Japan and adopting a performance-based pay scale, Mr. Nakamura said, adding that this was necessary to compete for global talent.

“We started from Ibaraki prefecture,” he said, referring to the provincial region that surrounds Hitachi city, home to the company’s original plants. “We were a typical Japanese company. We will go more global.”
​

We discussed this a long time ago in that thread about the decline of the Japanese electronic giants, so it's a good sign that several of the Japanese conglomerates are taking the steps necessary to succeed in today's global economy.

 

[Aepsilons]

Good to see this update, this gives me some fresh encouragements of brighter days ahead.

--------------

Japan's industrial production up 2.7% in Sept

TOKYO —

Japan’s September factory production posted its biggest rise in eight months, official data showed Wednesday, but the news failed to dispel doubts about the strength of the wider economy following a recent string of weak figures.

Industrial production rose 2.7% on-month, reversing a drop of 1.9% in August, the Ministry of Economy, Trade and Industry said.

That reading beat the median market forecast of a 2.2% rise and is the highest rise since a 3.9% expansion in January.

However, the quarterly data were less rosy with output from Japan’s factories shrinking 1.9% in July-September from the previous quarter, as makers of cars and home appliances tried to bring down their inventories after an April sales tax rise hit consumer spending.

The quarterly output drop followed a 3.8% fall in April-June, when the world’s number three economy suffered its biggest contraction since the 2011 quake-tsunami disaster.

Industrial output had grown at its fastest rate in more than two years in January as it caught up with stronger demand, before losing steam in the following months.

Retail sales also got a boost ahead of the April 1 sales tax rise—Japan’s first in 17 years—as shoppers made a last-minute dash to buy staples and big-ticket items such as cars and refrigerators before prices went up.

The industry ministry remained cautious despite the monthly upturn in manufacturing activity.

“Industrial production fluctuates indecisively,” it said in a monthly report, a more upbeat assessment than its August report, when the ministry said production “has weakened”.

A survey of manufacturers released with the data showed that they expected factory production to edge down 0.1% on-month in October and then pick up 1% in November.

“The surge in manufacturing output in September suggests that the sector has finally turned the corner, but a strong recovery is not on the cards,” Marcel Thieliant, Japan economist at Capital Economics, said in a note.

Despite the lackluster production, however, Japan is likely to manage to post small growth in the third quarter as activity in other parts of the economy such as the retail sector “seems to have picked up”, he said.

“Overall, we still expect GDP to increase by around 0.5% quarter-on-quarter in Q3,” following a drop of 1.8% in the second quarter, he said.

Third-quarter GDP data due out on November 17 will be closely watched for clues as to how Prime Minister Shinzo Abe’s economy growth blitz, known as “Abenomics”, is faring.

The data will be a key factor in whether Abe decides to raise the sales tax again to 10 percent next year—seen as crucial to Japan paying down a massive national debt.

The GDP data could also influence the Bank of Japan’s monetary policy, which has been aimed at stoking inflation, but which has had an adverse impact on private consumption.


Japan's industrial production up 2.7% in Sept ‹ Japan Today: Japan News and Discussion

------------------------------------



Honda net profit up 19%


TOKYO —

Honda on Tuesday said its six-month net profit jumped almost 19%, but the Japanese automaker, dented by a series of recalls, cut its earnings outlook for the full fiscal year.

The Civic and Accord maker posted a 288.41 billion yen net profit in April-September, up from 242.87 billion a year earlier, while sales rose to 6 trillion yen from 5.72 trillion yen.

However, Japan’s number three automaker net profit in the year to the end of March was estimated at 565 billion yen, down from an earlier 600 billion yen forecast, owing to a downturn at home and in other key Asian markets, including China.

The company also trimmed its full-year sales forecast to 12.75 trillion yen, from 12.8 trillion yen previously.

“Reflecting ... the forecast decline in unit sales in Japan and China due to the difficult business environment, Honda made some revisions to the previously announced forecasts for the current fiscal year,” it said in a statement.

Japanese sales have been dented by recalls of Honda’s new Fit subcompact.

The latest recall, of about 426,000 Fits and other vehicles in Japan, prompted Honda’s top executives to take three-month pay cuts to atone for the problems.

But Honda credited rising revenue in the first half to “brisk sales of vehicles and motorcycles in addition to positive impacts from currency rates”.

The statement added: “The operating profit rose 1.7% year on year after cost-cutting efforts despite higher expenses for sales, general management and research and development.”

The Japanese auto industry has benefited from the big-spending policies of Prime Minister Shinzo Abe, with huge monetary easing measures from the premier’s hand-picked team at the Bank of Japan helping push down the yen since last year.

A weaker yen boosts the competitiveness of Japanese exporters and inflates their repatriated overseas profits, although the effect has been waning in recent months, analysts say.

“The lower yen is undoubtedly a tailwind but factors other than that have not improved significantly from the first quarter,” said Credit Suisse analyst Masahiro Akita.

“A recovery in domestic sales since the April tax rise has been slow…(and) it is also unclear how demand in China—a core market for Japanese automakers—will fare” in the coming months, he added.

Japan raised its sales tax in April for the first time in 17 years in a bid to help pay down an eye-watering national debt.

But the levy hike hit growth in the world’s number three economy as consumer spending dropped off once prices went up on April 1.

That hurt demand for big-ticket items, including vehicles.

Honda is the first of Japan’s “Big Three” automakers to post its latest earnings, with rival Toyota and Nissan both reporting next week.

Honda net profit up 19% ‹ Japan Today: Japan News and Discussion

 

[kawaraj]

Hitachi shows the way forward for Japan, Inc. Here's an excerpt from an article I read yesterday in the WSJ:

http://online.wsj.com/articles/hitachi-profit-rises-company-raises-full-year-outlook-1414579756

Like other Japanese companies confronting a stagnant domestic market with a shrinking population, Hitachi is moving to expand internationally. Overseas sales accounted for 47% of sales in the first half through Sep. 30, up by one percentage point from a year earlier. Mr. Nakamura said that Hitachi, after moving the headquarters of its rail business to London, would take other steps to decentralize its management.

In another move toward international norms—and a rejection of traditional Japanese corporate practice—Hitachi is shifting from a seniority-based compensation system for managers in Japan and adopting a performance-based pay scale, Mr. Nakamura said, adding that this was necessary to compete for global talent.

“We started from Ibaraki prefecture,” he said, referring to the provincial region that surrounds Hitachi city, home to the company’s original plants. “We were a typical Japanese company. We will go more global.”
​

We discussed this a long time ago in that thread about the decline of the Japanese electronic giants, so it's a good sign that several of the Japanese conglomerates are taking the steps necessary to succeed in today's global economy.

that's certainly for general review. but more important factor still stays with the business unit and operation shift to better competitete in the niche of world market.

 

[LeveragedBuyout]

that's certainly for general review. but more important factor still stays with the business unit and operation shift to better competitete in the niche of world market.

These are the steps that enable Hitachi to compete. Localized management, meritocracy-based compensation, business-line rationalization. It's not rocket science; General Electric (Hitachi's peer) went through this exercise over 30 years ago.

 

[LeveragedBuyout]

Japan central bank shocks market with fresh easing - MarketWatch

Japan central bank shocks market with fresh easing

Published: Oct 31, 2014 1:21 a.m. ET




By

MICHAELKITCHEN
ASIA EDITOR

Shutterstock/Cristina Negoita
LOS ANGELES (MarketWatch) — In an unexpected move, the Bank of Japan’s policy board voted by a 5-to-4 margin to expand the pace of its quantitative easing, sending Tokyo stocks soaring and the Japanese yen falling sharply.

The central bank expanded the size of its Japanese Government Bond purchases to the equivalent of “about 80 trillion yen” ($727 billion) a year, an increase of ¥30 trillion from the previous pace. It said it would also buy longer-dated JGBs, seeking an average remaining maturity of 7-10 years.

The central bank also said it would triple its purchases of exchange-traded funds and real-estate investment trusts.

Concerns about dwindling inflation appeared to drive the move, with the Bank of Japan saying that “on the price front, somewhat weak developments in demand following the [April 1] consumption-tax hike and a substantial decline in crude-oil prices have been exerting downward pressure recently.”

It said that “if the current downward pressure on prices remains ... there is a risk that conversion of deflationary mindset, which has so far been progressing steadily, might be delayed.”

It also added that the so-called “quantitative and qualitative easing” program would continue “as long as it is necessary.”

Earlier in the day, data showed that Japan’s inflation rate in September had hit its lowest level in almost a year.

Most economists had expected no action at the current meeting, and the surprise sent the U.S. dollar USDJPY, +1.55% jumping to ¥110.55 in less than half an hour, up from around ¥109.37 just ahead of the decision. It marked the dollar’s highest level against its Japanese counterpart since before the 2008 global financial crash.

Likewise, Japanese stocks surged, with the benchmark Nikkei Average NIK, +4.42% up 4.7%, compared to a 1.6% gain just prior to the announcement.

The Kuroda Bazooka Round Two - Japan Real Time - WSJ

• 

• October 31, 2014, 3:29 PM JST

The Kuroda Bazooka Round Two
ByJacob M. Schlesinger

Bank of Japan Gov. Haruhiko Kuroda answers questions during a news conference in Tokyo on Oct. 7, 2014.
Agence France-Presse/Getty Images
Faced with fresh evidence that his bold campaign to end deflation was losing steam, Bank of Japan Gov. Haruhiko Kuroda Friday fired off a fresh round of ammunition from his famed money-spewing bazooka, shocking markets with a big increase in the central bank’s stimulus program.

The impact was immediate, with the Nikkei Stock Average soaring more than 4% and the yen dropping sharply to a near-seven-year low against the dollar. The announcement effect was amplified by Mr. Kuroda’s ability to pull off a big surprise. While analysts had long been saying more easing was needed, his steadily optimistic comments had successfully damped expectations for any further action until next year, with virtually no BOJ watchers predicting action so soon.

But the dramatic move from the master of monetary policy theater raises as many questions as it answers about Japan’s ability to tackle the persistent weakness that has hampered it for more than a decade.

In sharp contrast to Mr. Kuroda’s first major easing announcement in April 2013, shortly after he took office, the central bank’s policy board was deeply split. Last year, he managed to get a 9-0 vote in favor of a policy that broke sharply with his more cautious predecessor. This time, the board voted 5 to 4 in favor of dialing up the stimulus, raising the specter that the governor may be losing control over monetary policy.

The divided vote also reflects a deeper split — among policymakers, economists, business executives, and, despite the quick market pop, even investors — about the benefits and costs of more Bank of Japan action.

Earlier in the day, the government had announced that the most closely watched gauge of inflation had fallen to 1% in September, having decelerated sharply from the 1.5% peak in April. That’s well below Mr. Kuroda’s 2% target, and showed the limited impact of the stimulus program to date.

Mr. Kuroda also has been facing growing political heat over the costs of easing. He had been grilled for hours in parliament in recent days over, among other things, concerns that the weaker yen resulting from the central bank’s stimulus was pinching businesses by raising costs of imported goods. Those worries will likely only intensify.

The divided vote, and the surprise action, also risk undermining a key element of Mr. Kuroda’s game-plan for breaking what he calls Japan’s “deflationary mindset:” a projection of confidence.

Even as skepticism has spread about Japan’s recovery, Mr. Kuroda has been relentlessly upbeat, projecting self-assurance that he was steering Japan out of its long slump and was in complete control. The unexpected move raises risks that he now feels the economy is actually much weaker than he had believed, and that there is no clear consensus on how best to fix the mess.

Behind the surprise may also lie a broader strategy of economic policy coordination with the government. Before the BOJ announcement, Japanese stocks were up sharply in anticipation of an announcement planned for later in the day that the giant government pension fund would reallocate its portfolio,dumping Japanese government bonds in favor of stocks — another element in Prime Minister Shinzo Abe’s broader campaign to break the risk-averse culture that took root during the era of deflation, and to get Japanese investors to take more chances with their money.

And, looming for Mr. Abe is a decision on whether or not to go forward with a plan to raise the sales tax next year to 10% from the current 8%. It was the boost earlier this year — from the previous level of 5% — that slowed Japan’s economy and seemed to derail Mr. Kuroda’s earlier success in battling deflation.

Mr. Kuroda has been a staunch and public advocate that Japan needs to go forward with the tax hike in order to curb its mammoth sovereign debt. Friday’s move, by providing at least a short-term dose of growth, will likely make it easier for Mr. Abe to take that step.

 

[Aepsilons]

Bank of Japan Delivers Halloween Treat for Wall Street


FOX Business: Capitalism Lives Here

The Dow and S&P 500 booked record highs Friday in reaction to the Bank of Japan’s decision to expand stimulus measures, a move that surprised Wall Street.

Today’s Markets

The Dow Jones Industrial Average added 194 points, or 1.1%, to 17,390. The S&P 500 gained 23.3 points, or 1.2%, to 2,017. The Nasdaq rose 64.6 points, or 1.4%, to 4,630.

The blue-chip index, which also jumped to a new intraday record of 17,395 in mid-morning trading, logged its best week in two years.

After weeks of volatility, Wall Street has calmed a bit in the second half of October. Traders were faced with the looming end of the Federal Reserve’s bond-buying stimulus program, coupled with growing concerns over global economic growth.

The Fed on Wednesday officially declared that QE3 will come to a close this month. But the Bank of Japan sung a different tune.

On Friday, its policy makers voted 5-4 in favor of expanding quantitative easing to about 80 trillion yen annually, or $727 billion. That reflects an increase of 30 trillion yen compared to the central bank’s current stimulus program.

The Bank of Japan also announced it will triple purchases of exchange-traded funds and real-estate investment trusts.

“Clearly it’s good for equities, but it’s very, very bad for the yen,” Paul Mortimer-Lee, global head of market economics at BNP Paribas, said on 'Opening Bell with Maria Bartiromo.'

The yen moved to its weakest level against the U.S. dollar since December 2007. Japan’s currency depreciated to 112.47 yen per dollar in recent trading, up 3%.

The European Central Bank will likely follow in the BoJ's footsteps, and announce additional stimulus measures of its own in December, Mortimer-Lee added.

In corporate news, Exxon Mobil (XOM) beat Wall Street views with 3% earnings growth for the third quarter despite lower production and a decline in realized oil prices. Shares closed 2.4% higher.

Chevron (CVX) posted a 13% increase in its third-quarter profit and topped consensus estimates, sending shares up 2.4%.

Starbucks (SBUX) dropped 2.3% after providing weaker-than-expected guidance for its current quarter and fiscal 2015.

In commodities, West Texas Intermediate crude oil fell 58 cents to $80.54 a barrel. Wholesale New York Harbor gasoline slipped 2.31 cents, or 1%, to approximately $2.17 a gallon.

AAA said the national average for retail gasoline prices is expected to drop below $3 per gallon Saturday. Gas prices haven’t reached that milestone since December 2010.

On the economic front, the Labor Department reported consumer spending last month fell 0.2%, the first drop for the gauge since January, while the Street was looking for a 0.1% increase. Meanwhile, personal income rose 0.2% in September, its weakest pace since December, coming in short of expectations for a 0.3% increase.

A gauge of Midwest manufacturing activity was also released Friday, which showed factory activity in the region accelerated during the month of October, though it was expected to fall. The gauge jumped to 66.2 from 60.5 the month prior, while economists anticipated a slight drop to 60.

A reading on consumer sentiment from Thomson Reuters and the University of Michigan showed consumers were more optimistic in October. The gauge rose to 86.9, topping expectations for a reading of 86.4. The reading was the highest since July 2007.

Bank of Japan Delivers Halloween Treat for Wall Street | Fox Business

 

[Aepsilons]

These three words could save Japan’s economy


Whatever it takes.

Those are the three most important words a central banker can say. It's simple, really: People don't like to bet against someone who's willing and able to create infinite amounts of money to get what they want. That's why just uttering the phrase can sometimes be all that's needed. It's a kind of Jedi mind trick. But when that's not enough, a central bank has to put — or, more accurately, print — its money where its mouth is.

Which brings us to Japan. Its central bank, the aptly-named Bank of Japan (BOJ), stunned markets on Friday by announcing it will now buy ¥80 trillion, or $714 billion, of bonds a year with freshly-printed money, rather than the ¥50 trillion it had been before. It will also triple its purchases of stocks and real estate. So, in all, it's increasing its stimulus efforts by somewhere between ¥10 trillion and ¥20 trillion a year. That's actually doing whatever it takes to try to boost Japan's still-nascent recovery and still-low inflation rate.

Markets, at least, loved it. The Nikkei rocketed up 4.9 percent, and the yen fell 2 percent against the dollar, which is good news since a cheaper currency should help support prices and exports. But for all this financial exuberance, Japan's economy is still struggling to dig out of its deflationary hole. You have to print a lot of money to convince people that things are changing when there are twentysomethings who aren't old enough to remember what rising prices are like.

Japan's bubble, you see, burst in the early 1990s, but for the next 20 years the BOJ mostly acquiesced to low growth and even lower, negative actually, inflation. Instead of coming up with a plan to revive its economy, it just came up with excuses why it couldn't. Now, it's true that it finally ditched some of this fatalism and started printing money after its first lost decade. But the problem was it stopped as soon as things only looked half-bad. The BOJ lacked, as a then-Princeton professor named Ben Bernanke put it in 1999, the "Rooseveltian resolve" to keep experimenting until something worked.

The cost of all this caution, as you can see in the chart below from Brad DeLong, was enormous. It shows Japan's GDP per capita as a percentage of the U.S.'s throughout the postwar period. The short version of the story is that, by the late 1980s, it looked like Japan would not only catch up with the US, but actually pass it. (The old joke, as Paul Krugman reminds us, was that the Cold War was over, and Japan had won). Indeed, at its peak, the land beneath Tokyo's Imperial Palace was supposedly worth more than the entire state of California. But then its boom turned to bust, and the BOJ sat passively by while deflation and deleveraging decreased growth. The result was that Japan actually lost ground to the U.S. in the 1990s, and hasn't made up any of it since.

So instead of becoming as rich as the US, Japan, despite all its technological marvels, seems to have plateaued at a permanently poorer level.

But then came those three little words. It started in 2013, when new prime minister Shinzo Abe decided that two lost decades were enough, and it was time for the BOJ to get serious about getting prices rising and the economy moving again.

Let's back up for a minute. Why aren't falling prices a good thing? Well, anytime inflation is too low — practically-speaking, 1 percent or less — it makes it harder to pay back debts and means there isn't as much reason to spend or invest now rather than later. Put simply, it hurts growth.

That's why Abe appointed an outsider, Haruhiko Kuroda, who didn't buy the BOJ's excuses, to run the place instead. And he didn't disappoint. Kuroda promptly raised the BOJ's inflation target from 1 to 2 percent, started printing tens of trillion of yen to buy bonds with, and said he wouldn't stop until inflation got up to its new target. And if that wasn't enough, he said he'd do, yes, "whatever it takes" to end deflation.

Well, now we're finding out Kuroda meant what he said. See, Japan's economy and inflation rate have heated up the past year, but this progress has stalled out recently. That's because the government just passed a big sales tax hike, and lower oil prices, while good for the economy, have kept inflation expectations from rising anymore. So Kuroda is stepping on the gas even harder to make sure the economy gets to where it's supposed to go. And he's doing that over the objections of four of the BOJ's nine voting members. In other words, Kuroda's not going to accept failure, and he doesn't care what anyone else thinks.

"The most dangerous idea" in monetary policy, Berkeley professor Christina Romer has said, is that "monetary policy doesn't matter." The Federal Reserve made this mistake in the 1930s, when it said it was powerless to stop the vicious circle of default and deflation. It made the opposite mistake in the 1970s, when it said rising inflation was beyond its control. And it's the same one the BOJ has been making as its economy has languished for two decades now—well, at least until the last year. The lesson is that monetary policy has only failed when it hasn't been tried. And that's the best news for Japan. Even if all this stimulus isn't enough, the BOJ is determined to keep going until something does.

FDR would approve.


These three words could save Japan’s economy - The Washington Post

 

[Aepsilons]

Nissan says first-half net profit up 25%

TOKYO —

Nissan said Tuesday its half-year net profit rose 25% to 237 billion yen, lifted by strong North American sales and new models, with a sharply weaker yen also boosting the firm’s bottom line.

Japan’s No. 2 automaker said its profit for the April-September period was up from 189.82 billion a year ago, while sales rose 8.2% to 5.14 trillion yen.

Operating profit rose to 261.9 billion yen, up 18%, said the maker of the Altima sedan and luxury Infiniti brand.


Nissan says first-half net profit up 25% ‹ Japan Today: Japan News and Discussion