Japan - Latest News/Current Events, Economic Overview & Trade Relations
Quick Facts about Japan
| Official Name | Japan |
| Capital | Tokyo |
| Location | Eastern Asia, island chain between the North Pacific Ocean and the Sea of Japan, east of the Korean Peninsula |
| Area | total: 377,835 sq km land: 374,744 sq km water: 3,091 sq km note: includes Bonin Islands (Ogasawara-gunto), Daito-shoto, Minami-jima, Okino-tori-shima, Ryukyu Islands (Nansei-shoto), and Volcano Islands (Kazan-retto) |
| Climate | varies from tropical in south to cool temperate in north |
| Terrain | mostly rugged and mountainous |
Editor PicksBrowse Asia News Archive
Japan Tankan Signals Business Spending Cuts May Impede Recovery
The Bank of Japan's quarterly Tankan report reflected businesses plans to further reduce spending, since it is estimated that profits will fall 20 percent this year, which is almost twice the March forecast.
Hiroshi Shiraishi, an economist at BNP Paribas in Tokyo said, "Companies have started to realize that sales aren't really going to come back, companies are faced with massive excesses in capacity." Hiromichi Shirakawa, chief economist at Credit Suisse Group AG in Tokyo said, "It could be two or three years before companies are using even three quarters of their production capacity." Aware of this, managers are cutting investment, jobs and wages. Toyota, for instance, is cutting spending 36 percent and is simultaneously cutting wages for factory workers by 15 percent. As profits continue falling, companies will continue to hire less workers (and lay some off) and invest less.read source article
Bank of Japan's Tankan Survey Looks Better
It is predicted that the Bank of Japan's Tankan survey on June 1st will show that important manufacturing companies believe the "worst of the recession" is over.
It is predicted that the Bank of Japan's Tankan survey on June 1st will show that important manufacturing companies believe the "worst of the recession" is over on July 1, 2009. Evidence of the new outlook among large makers of electronics and cars is expected to rise from minus 58 in March to minus 43. Although the minus shows that pessimists outnumber optimists, the decrease in number of pessimists is important, especially in the manufacturing industry. As Jan Lambregts, head of financial markets research at Rabobank International in Hong Kong said, "we're seeing a rebound from rock bottom." A large increase in Chinese demand has helped Japan. Thanks to China's government spending, Japan's "heavy equipment" autos and materials have increased in sales. For instance, in China, Nissan sales rose 37 percent in April 20009, due to a subsidy that cut the consumption tax in half on small cars. In the U.S, Mazda Motor Corporations are also predicted to increase because of the Obama administration's "cash for clunkers" which would give consumers some money for trading in their old vehicles. (As much as $4,500 according to Bloomberg.) In Japan, electronics sales have increased 18 percent in the past month, due to the government's introduction of a program to advocate consumers to purchase eco-friendly products.Goldman Sachs recommends Japanese Banks
Goldman Sachs Group Inc. said it recommends buying Japanese banks and shorting the nation's steelmakers, citing valuations. Japanese bank stocks are relatively cheap as they trade at about 70 percent of their average price-to-book ratio, compared with up to 120 percent for banks across Asia, Kathy Matsui, the Tokyo-based chief strategist at the brokerage, said in a report dated yesterday. The country's steel shares are at or above their midpoint price-to-book levels, the report said.
Goldman Sachs Group Inc. said it recommends buying Japanese banks and shorting the nation's steelmakers, citing valuations. Japanese bank stocks are relatively cheap as they trade at about 70 percent of their average price-to-book ratio, compared with up to 120 percent for banks across Asia, Kathy Matsui, the Tokyo-based chief strategist at the brokerage, said in a report dated yesterday. The country's steel shares are at or above their midpoint price-to-book levels, the report said. "Japanese banks should enjoy an outsized earnings impact from lower credit costs as the economy stabilizes," Matsui wrote. "The recovery in stock prices should also help alleviate capital concerns." While many investors have bought into steel stocks that are sensitive to global economic trends, most are still "extremely underweight" in domestic cyclical shares like banks, Matsui said in the report. The brokerage boosted Mitsubishi UFJ Financial Group Inc. to "buy" from "sell" and Mizuho Financial Group Inc. to "neutral" from "sell," the report showed. Mitsubishi UFJ rallied 2.2 percent to 605 yen while Mizuho gained 2.1 percent to 246 yen as of the 11 a.m. trading break on the Tokyo Stock Exchange.read source article
Japan Limits Exports to North Korea while China Prepares to Act
Japan has banned exports to North Korea in response to their nuclear and missile tests in May, with the purpose of sending a "strong message".
Japan has banned exports to North Korea in response to their nuclear and missile tests in May, with the purpose of sending a "strong message". "What's most important is that North Korea make the right response... to Japan's strong message, even though there are people who point out the volume of exports is small," said Chief Cabinet Secretary Takeo Kawamura. The Japanese concern arises from the proximity of the country, since much of its territory could be hit by North Korean mid-range missiles, according to the BBC's Roland Buerk in Tokyo. North Korea's key trading partner is China. China "has pledged to implement tougher sanctions against North Korea, which were approved by the UN last week." These sanctions include careful inspection of ships suspected of taking banned cargo to and from North Korea, and increased ban on arms sales.Japan Stocks Shows Optimism
Japan's stock index closed Friday above the important 10,000-point level since October 7, 2008.
Japan's stock index closed Friday above the important 10,000-point level since October 7, 2008. "Investors are upbeat over the direction of the economy with recent indicators suggesting the global economy is heading toward a recovery," said Yutaka Miura, senior strategist at Mizuho Securities Co. Ltd.read source article
Distressed Japanese Work to Death
Analysts say that people facing an unpredictable economic future usually feel compelled to work longer hours, even if it is hazardous to their health. Although the Japanese culture of hard work is widely praised, it also poses a threat to those that overwork.
Analysts say that people facing an unpredictable economic future usually feel compelled to work longer hours, even if it is hazardous to their health. Although the Japanese culture of hard work is widely praised, it also poses a threat to those that overwork. According to a report released by the Health, Labor & Health Ministry on June 8, "a record number of workers suffering from job-induced mental disorders successfully filed for compensation". About 269 of 927 of applicants won compensation and among those 269 applicants, 66 had sought suicide, which is the second-highest number on record. In addition, about 158 deaths of workers were linked to karoshi, or working to death, which was an increase of 16 in just one year. Companies like Toyota are working to improve conditions by encouraging workers to rest and take vacations. During Golden Week holidays in May, for example, some manufacturers closed plants for longer and advocated the holidays. However, the economic hardships are still persistent. Many manufacturing workers have had to surrender to wage cuts, bonuses and overtime, which one worker said takes about $1,000 a month out of his pocket. Japan's positive second quarter forecast of growth in GDP might lessen the stress Japanese workers are currently facing.Browse Asia News Archive
Trade Agreements
Japan - Singapore Economic Agreement for a New-Age Partnership
The JSEPA strives for better market access as well as national treatment conditions. The Japan Singapore agreement is the model agreement for Japan as it was its first EPA. Not only does it cover tariff reduction, JESPA synchronizes customs procedures and addresses the movement of people. http://www.fta.gov.sg/fta/pdf/FTA_JSEPA_Agreement.pdf
Japan – Malaysia Economic Partnership Agreement
Under the Agreement, both countries will work to eliminate all tariffs within ten years. The partnership will allow Japanese firms to move into the Malaysian car market. The tariffs on Japanese cars will be eliminated by 2015. Trade in Japan is expected to increase as Japan is Malaysia’s third largest trading partner. JMEPA will strengthen the economic ties between the two countries and remains a solid basis for the facilitation of trade between the countries. http://www.mofa.go.jp/region/asia-paci/malaysia/epa/index.html
Japan – Mexico Economic Partnership Agreement
MexicoThe Agreement between Japan and the United Mexican States for the Strengthening of the Economic Partnership attempts to strengthen the bilateral economic relations between the two countries. It promotes the liberalization of investments and trade. In addition, it attempts to offer people a freer flow for business purpose. Japan will obtain access to the Mexican market, a consumer base will nearly 100 million. Japan will also gain a bridge to the North and South American markets through Mexico, as it has numerous agreements with countries in the region, allowing Japan treatment equal to that of the EU, Canada and US in services, customs, investment and government procurement. http://www.mofa.go.jp/region/latin/mexico/agreement/index.html
Trade Organizations
ASEAN Plus 3
Forum as a coordinator of cooperation between ASEAN and China, Japan and South Korea.
Asia Cooperation Dialogue (ACD)
The Asia Cooperation Dialogue (ACD) is an International Organization to promote Asian cooperation at a continental level, helping to integrate the previously separate regional organizations of political or economical cooperation such as ASEAN, SAARC
Asia-Pacific Economic Cooperation (APEC)
Asia-Pacific Economic Cooperation (APEC) is a forum for 21 Pacific Rim countries or regions (styled 'member economies') to discuss the regional economy, cooperation, trade and investment. The membership is claimed to account for approximately 41 percent of the world's population, approximately 56 percent of world GDP and about 49 percent of world trade. The activities, including year-round meetings of the members' ministers, are coordinated by the APEC Secretariat.
Council for Security Cooperation in the Asia Pacific (CSCAP)
The Council for Security Cooperation in the Asia Pacific (CSCAP) is a non-governmental (second track) process for dialogue on security issues in Asia Pacific.
East Asia Summit (EAS)
The East Asia Summit (EAS) is a Pan-Asia forum of 16 countries in East Asia, with ASEAN in a leadership position.