| Jul 29 | Don't scorn Germany and Japan; learn from them (Los Angeles Times) |
| In the midst of the Great Recession, the United States is suffering through nearly 10% unemployment, rising inequality and poverty, 47 million people without health insurance, declining retirement prospects for the middle class and a general increase in economic insecurity. The global marketplace has become tumultuous, so when we find a bright spot, one would think it deserves a mention. How then should we regard a country that has 5% unemployment, the lowest income inequality, healthcare for all its people and is one of the world's leading exporters? |
| Jul 28 | All ministries face 10% budget cut (Japan Times) |
| Despite dissent within the ranks of his Democratic Party of Japan and Cabinet, Prime Minister Naoto Kan's administration endorsed on Tuesday a 10 percent cut on all ministries' fiscal 2011 budget requests and earmark at least ¥1 trillion to stimulate economic growth. The approved guideline, which ministries will use when they compile their budget requests, caps annual policy-related spending at ¥71 trillion, as previously pledged by Kan. The Cabinet also agreed to hold open debate on which projects deserve a share of the ¥1 trillion. |
| Jul 27 | Kan, ministers agree to 'actively' seek FTAs (AP) |
| Prime Minister Naoto Kan and other ministers on Tuesday affirmed that that they will actively work to seek free trade agreements with other countries, trade minister Masayuki Naoshima said. It was the first gathering of ministers to discuss the issue since Kan succeeded Yukio Hatoyama as premier in June, according to a government official. "The Kan Cabinet would like to actively work (on the trade agreement issue) in the same way as the Hatoyama Cabinet," Economy, Trade and Industry Minister Naoshima told a regular press conference. |
| Jul 27 | 'No pressure,' says BOJ's 1st female branch manager (Yomiuri) |
| Despite her recent appointment as the first female branch manager in the 128-year history of the Bank of Japan, Tokiko Shimizu says she feels no pressure. She's probably telling the truth, for this is not the first, or even the second time she's broken such ground at the central bank. Shimizu was also the first woman to be appointed deputy head of the bank's London office, her former post, and the first to be in charge of foreign exchange intervention. |
| Jul 27 | Stimulus cut of ¥1 trillion tough for Kan (Japan Times) |
| A Cabinet committee endorsed a plan Monday to earmark more than ¥1 trillion for stimulus growth measures in the fiscal 2011 budget, instead of the ¥2 trillion the ruling Democratic Party of Japan has urged the government to allocate for such measures. The draft also urges each ministry and agency to cut back on requests for policy-related spending in the fiscal year starting next April by 10 percent to squeeze out funds for the special allocation. |
| Jul 26 | Gov't eyes over 1 tril. yen for growth stimulus in FY 2011 budget (AP) |
| The government is considering securing over 1 trillion yen for special growth stimulus measures in its budget for fiscal 2011, Cabinet members said Monday. The government is also planning to widely canvass public opinion on what policies should be pursued under the stimulus spending, Chief Cabinet Secretary Yoshito Sengoku said at a press conference. The ruling Democratic Party of Japan proposed last week allocating at least 2 trillion yen for fresh growth steps within the government's spending cap of 71 trillion yen for the year through March 2012. |
| Jul 26 | Why Japan finds it So Hard to Change (Time) |
 Sometimes Japan seems to be on the wrong continent. Everywhere else in Asia, from Shanghai to Mumbai to Jakarta, there is an aura of perpetual motion, a sense that tomorrow will be better than today. The region is on a frenetic 365-day-a-year hurtle into a brighter future. Japan once shared Asia's dynamism and mission. But not anymore. Today, Japan is an island of inertia in an Asia in constant flux. Japan's political leadership is paralyzed, its corporate elite befuddled, its people agonized about the future. While Asia lurches forward, Japan inches backward.
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| Jul 25 | Young Japanese are outsourcing themselves (The Hindu) |
| In October 2008, at the height of the financial crisis when job markets were freezing up globally, Akane Natori easily found a position she liked. "Things went so smoothly after applying online, and before I knew it, I had the job," said Ms Natori, who was then a 26-year-old sales assistant at an import-export company in Tokyo. There was just one catch: Ms Natori's new job - working in a call centre answering queries from customers in Japan - was in Bangkok. The trend is one that speaks volumes about the Japanese economy and the challenges younger Japanese face in a country where college graduates used to count on lifetime employment with the company they joined. |
| Jul 24 | Deflation said a structural problem (Japan Times) |
| The country's decades-long deflation is largely attributable to a chronic demand shortfall and heavy dependence on exports to China and other emerging economies where price competition is tough, according to a government report issued Friday. The Annual Report on the Japanese Economy and Public Finances released by the Cabinet Office notes that the nation was prone to deflation because of structural problems long before the financial crisis hit the global economy in 2008, driving price levels down across the world. |
| Jul 24 | Paper: Helping business helps nation (Yomiuri) |
| The Annual Report on the Japanese Economy and Public Finances for fiscal 2010, submitted to the Cabinet on Friday, urges lower corporate taxes and a higher consumption tax rate. The white paper, submitted by state minister in charge of economic and fiscal policy Satoshi Arai at a Cabinet meeting, argues that lowering the effective corporate tax rate is necessary to help companies grow and enable the nation to reverse lingering deflationary trends. The government needs to increase household incomes by enhancing companies' profitability, the paper says. It also strongly urges that the consumption tax rate be raised to aid reconstruction of the government's finances. |
| Jul 23 | Japan: Land Of The Rising Sum (UPI) |
| Sensitivity to the sovereign debt crisis has brought scrutiny to Japan. The nation's already high debt has continued to escalate. In the 1990's the debt was 86% of GDP, and now it has reached nearly 200% -- twice the size of its $5 trillion economy. The budget deficit will continue at 5% until 2021. The country is referred to as the land of the rising "sum" and many speculate on its demise. The combination of an aging population, low tax revenue and rising debt make these fears palpable. |
| Jul 23 | DPJ panel proposes funding for stimulus (Japan Times) |
| A Democratic Party of Japan panel proposed Thursday using ¥2 trillion from within the planned spending cap of ¥71 trillion for fiscal 2011 for steps to spur economic growth and create jobs, a DPJ official said. Arrangements are currently under way for Koichiro Gemba, head of the party's policy research council, to convey the proposal to the government, according to Koriki Jojima, deputy head of the council. |
| Jul 22 | What's Ahead for the Yen? (SeekingAlpha) |
| Home of sumos, samurais and sushi, Japan occupies a unique place within world history. Part of this history involves Japan's ascendency as a centre for international trade and commerce: salarymen, massive conglomerates and innovation serve as some of the defining features of the Japanese economy. In the world of finance, Japan has also played a pivotal role. Take, for example, the development of the first organized exchange with standardized futures contracts in Dojima, circa 1730. |
| Jul 22 | Japan: Land of the Rising Debt (benzinga.com) |
| Investors are understandably scared of the sovereign debt crisis unfolding in Europe. Amid their angst, however, they are ignoring a more likely, and significantly larger, debt catastrophe that is about to hit the nation with the second-largest economy in the world - Japan. Two decades of stimulative, low-interest-rate fiscal policy have made Japan the most indebted nation in the developed world, and as new Prime Minister Naoto Kan recently said, in his first address to Parliament, that situation is not sustainable. Japan has little choice but to raise interest rates substantially, with dire consequences far beyond its shores. |
| Jul 21 | Kan seeks ¥71 trillion budget spending cap (Japan Times) |
| The Cabinet of Prime Minister Naoto Kan approved a plan Tuesday to keep general account spending for fiscal 2011 below the ¥71 trillion planned for fiscal 2010, as the administration aims to form a more detailed budgetary guideline by the end of the month. Within the ¥71 trillion, the Democratic Party of Japan-led government will put priority on a new growth strategy and campaign pledges the party made for the July 11 Upper House election, according to the outline endorsed by the Cabinet. |
| Jul 20 | Summer bonuses at large firms rise 1st time in 3 yrs in Japan (AP) |
| Major Japanese companies are paying an average 757,638 yen in summer bonuses, up 0.55 percent from a year ago and the first increase in three years, the Japan Business Federation said Tuesday. The weighted average of amounts the firms struck with their labor unions rose 1.02 percent in the manufacturing sector to 741,395 yen but dipped 0.77 percent for nonmanufacturers to 804,706 yen, said Japan's most influential business lobby known as Nippon Keidanren. |
| Jul 20 | Japan Suffering From 'Aid Fatigue' (ino.com) |
| Recession-hit Japan has indicated that it will no longer be possible for it to offer aid to poor countries in the wake of the continuing global recession and a weak U.S. economy. A Japanese representative said the world's second largest economy was suffering from "aid fatigue", and asked leaders of 55 Indian and Asian political parties attending an anti-poverty conference in the southwestern Chinese city of Kunming not to look to Tokyo for aid any longer. |
| Jul 17 | Cabinet to see 2011 budget outline (Japan Times) |
| Finance Minister Yoshihiko Noda said he will present to Cabinet next Tuesday a rough guideline on how to formulate the fiscal 2011 state budget, with an eye to gaining endorsement by month's end. "I would like to push ahead with preparations so I can present an outline as early as Tuesday," Noda said at a news conference Friday at the Finance Ministry, noting he was ordered to work out the outline by Prime Minister Naoto Kan during an informal Cabinet meeting earlier in the day. |
| Jul 16 | My $80,000 Says Deflation Will Only Get Worse: William Pesek (BusinessWeek) |
| Naoto Kan may get the state dinners and the motorcades, but he no longer runs Japan. Economist Masaaki Shirakawa does. If anything is clear since the drubbing that Prime Minister Kan's Democratic Party of Japan took earlier this week, it's that politicians are passing the buck to the central bank. Expect Bank of Japan Governor Shirakawa to feel more pressure to boost economic growth than ever before. You may think you have seen this movie before. You haven't. Increased reliance on the BOJ will end badly for the world economy. It's now entirely possible that, come September, Japan will have its sixth leader in four years. |
| Jul 16 | Japan's provinces are withering away (BusinessWeek) |
| On the block where Mika Nasu's clothing shop sits along the main street of Atami, a resort town 65 miles south of Tokyo, 13 of 19 stores are shuttered. "Recovery? What recovery?" asks Nasu, 50. "It just gets worse and worse." Nasu's struggles are reflected in the Bank of Japan's Sakura Report, a regional survey akin to the Federal Reserve's Beige Book. In the July 8 report, companies from seven of Japan's nine regions expect business to worsen in the next three months. Kanto, the region that includes metropolitan Tokyo, is the only one where business anticipates any improvement. If the economy consisted solely of urban areas like Tokyo, Osaka, and Nagoya, things would look better. |
| Jul 15 | A Case for Japanese Hyperinflation (Wall Street Journal) |
 fter massive bouts of monetary stimulus world-wide during the past couple of years, including central bank monetization of government debt, it's no longer just signed-up members of the lunatic fringe who worry about hyperinflation.
Unless, of course, you're talking Japan. And yet there's probably no other major economy more at risk of it.
At this point, anybody who's cast even a cursory eye at Japanese consumer prices or the performance of Japanese government bonds during the past two decades offers up a chuckle, shakes his head and wanders off. But there's a good case to be made for a very serious bout of Japanese inflation, and not just in the far-distant future.
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| Jul 14 | Japan Faces Possible Credit Downgrade (ntdtv.com) |
| Standard & Poor's and Fitch are warning Japan of possible credit rating downgrades, after an election humbling raised fears about the government's commitment to fiscal reform. S&P said late Monday that it may cut Japan's sovereign debt rating if the mountain of red ink grows or there is a lack of concrete policy steps, while Fitch joined the chorus Tuesday. |
| Jul 14 | Aim to expand the middle class (Japan Times) |
| Although the government announced in June a growth strategy that emphasizes the creation of new industries in such fields as environment, nonfossil-fuel energy and health-related services, the big problem for Japan is that its middle class is waning. The period of high economic growth begot the phrase "ichioku so churyu" (100 million people in the middle class). They enjoyed strong purchasing power and avidly bought the "3Cs" - cars, coolers (air conditioners) and color TVs. This mass consumption spurred strong domestic demand, which along with brisk exports served as a locomotive for the economy in the 1960s and 1970s. |
| Jul 13 | IMF optimistic about Japan debt cut effort (Reuters) |
| A senior IMF official said on Tuesday he was optimistic about Japan's effort to cut back public debt despite the weekend's election results because the main political parties agreed on the need for urgency. "You saw from the campaign that the main opposition party as well as the DPJ (Democratic Party of Japan) was speaking about the need to adjust taxes for public debt," Anoop Singh, director of the International Monetary Fund's Asia and Pacific department, told Reuters in an interview. |
| Jul 13 | Japan growth plan may hurt, not boost, economy (moneycontrol.com) |
| If history is anything to go by, Japan's plan to boost the sluggish economy by pouring cash into so-called growth sectors could do more harm than good by adding a drag on the country's already relatively low productivity. Prime Minister Naoto Kan hopes to win votes in Sunday's upper house elections with a growth strategy he says will increase real growth to 2% a year. |
| Jul 13 | BOJ to face pressure to fight deflation (Japan Times) |
| Pressure on the Bank of Japan to fight deflation is likely to increase following the coalition government's defeat in the Upper House election, economists said. Prime Minister Naoto Kan's government lost control of the chamber in Sunday's contest, meaning he will have to rely on smaller parties to pass laws smoothly. While that may undermine his ability to cut the world's largest public debt, his adversaries at least agree on the need for a swift end to the price declines that are undermining the economic recovery. |
| Jul 12 | Kan says sales tax hike behind Sunday's election setback (AP) |
| Prime Minister Naoto Kan attributed Sunday's upper house election setback for the ruling coalition led by his Democratic Party of Japan to his raising the possibility of an increase in the nation's sales tax, while adding that he will remain in office. At a press conference in the early hours of Monday, Kan, also DPJ president, said, "Voters may have felt it (my proposal for a sales tax hike) came all of a sudden and I am sorry that I failed to explain the matter fully in advance." |
| Jul 09 | Could Japan Collapse? (The Diplomat) |
| Since taking office last month, Prime Minister Naoto Kan has dramatically shifted the focus of political and economic debate in Japan to the nation's shocking finances. Japan is in danger of financial collapse, Kan warned, as he called for a hike of the 5 percent consumption tax. Coming just before an important upper house election on Sunday, it was a bold move to touch a traditional 'third rail' of politics. And in doing so, he has turned the poll into something of a referendum on increasing the sales tax. Broaching the subject has suddenly become possible in part because of the Greek debt crisis and its repercussions in the Eurozone and beyond. Scenes of public unrest in Greece on TV news shows and the rapid escalation in the scale of the bailouts needed by Athens have made the Japanese public more aware of the potential consequences of national debt problems. |
| Jul 08 | Bankruptcies in 1st half of 2010 mark 1st drop in 5 years (AP) |
| The number of corporate bankruptcies in Japan in the first half of 2010 dropped 16.9 percent from the same period last year to 6,790, the first year-on-year drop in five years for the January to June period, backed mainly by government measures supporting corporate financing, a credit research firm said Thursday. Liabilities that accompanied the corporate failures fell 9.5 percent to 4.24 trillion yen, Tokyo Shoko Research said, noting that credit became more readily available for small companies under government programs. |
| Jul 08 | Economic fears causes Japan machinery order drop (AFP) |
 A key indicator of Japanese corporate capital spending fell the most since 2008 in May, data showed Thursday, in a fresh sign that a fragile economic recovery may be losing momentum.
Japan's core private-sector machinery orders dropped 9.1 percent in May from the previous month as firms held back on business investment, the steepest decline since August 2008. The fall in the volatile indicator was the first decline in three months and much larger than the median forecast of a 3.0 percent decline in a survey of economists by Dow Jones Newswires and the Nikkei business daily.
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| Jul 07 | China buys $7.9 billion of Japanese bonds in May (MarketWatch) |
| China purchased a net 694.8 billion yen ($7.9 billion yen) of Japanese bonds in May, more than doubling its purchases for the first four months of the year, preliminary data released by the Ministry of Finance showed Thursday. Data released earlier in the week showed China had bought 541 billion yen ($6.17 billion) worth of Japanese government bonds in the first four months of the year, reportedly more than twice the previous record of 253.8 billion yen made during the full year 2005. |
| Jul 07 | Data shows growth in Asia may be slowing (New York Times) |
 In the latest signs that the rate of growth in the Asia-Pacific region is easing, the Australian central bank kept interest rates steady on Tuesday and a critical economic index in Japan slipped in May. The slowdown is modest, and most of the region, notably India and China, continues to enjoy growth rates that far outstrip those in Europe and the United States. Low corporate and household debt levels and firm demand within Asia itself have helped most Asian-Pacific nations to shrug off more muted demand from elsewhere.
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| Jul 07 | Getting serious on debt reduction (Japan Times) |
| Prime Minister Naoto Kan's call for supra-partisan discussions on a consumption tax rise and the government's long-term fiscal management plan announced shortly before the G20 summit show that the Kan administration has become serious about reducing the national debt. As a deflationary trend continues, the government will face a difficult task of reducing the government's reliance on bond issuance while putting the economy on a stable recovery path. |
| Jul 07 | Double taxation on pension-insurance payouts overruled (Japan Times) |
| It is illegal to impose income tax as well as inheritance tax on the beneficiaries of life-insurance money paid in pension form, the Supreme Court ruled Tuesday, overturning a lower court decision that approved the form of double taxation. The ruling is likely to have a significant impact given that it may spur similar lawsuits demanding the return of income tax already paid. |
| Jul 06 | Japan should erase more barriers for working women, experts say (Japan Times) |
| Japanese society needs to be more enthusiastic about women taking a prominent role in the workplace if the country is ever to achieve equality between the sexes, a panel of British experts on Japan recently concluded. They said during a recent seminar at the Daiwa Anglo-Japanese Foundation that while much progress has been made in terms of legislation, a cultural change is needed in both men and women to raise the status of women at work. |
| Jul 05 | Trade deal biased in favor of Japan? (Business World) |
| The United States and the European Union have expressed concern over the Philippines' bilateral trade deal with Japan, saying it puts the country at a disadvantage versus its richer East Asian trade partner. "Asymmetrical liberalization" in the Japan-Philippines Economic Partnership Agreement (JPEPA) was questioned by the both trade powers, as did several other countries, at a routine review hosted last month by the World Trade Organization (WTO), more than a year after the pact came into effect in December 2008. But Japan and the Philippines countered that the agreement -- while requiring Manila to eliminate more trade barriers at a faster pace -- was complemented with cooperation efforts to improve the latter's export capacity. |
| Jul 05 | Funding social welfare (Japan Times) |
| Social welfare such as pensions, medical and nursing care as well as support measures for families rearing children is an important issue. A fiscal 2009 Cabinet Office survey shows that the largest portion of those polled - 69 percent - want the government's priority to be on establishing a pension system that is equitable and reliable. Japan's political parties have proposed various social welfare measures that voters will take into consideration in deciding which party to support in the July 11 Upper House election. |
| Jul 03 | Summer travelers abroad to rise 8% (Japan Times) |
| Japanese overseas travelers on summer vacation this year may rise 8.4 percent from the previous year to 2.44 million due to the nation's economic recovery and the yen's appreciation against other currencies, travel agency JTB Corp. forecast Friday. Overseas summer travel demand between mid-July and the end of August is thus expected to increase for the second consecutive year. |
| Jul 03 | Department store sales renew fall (Japan Times) |
| All major department store chains have reported year-on-year sales drops on a same-store basis for June, partly because consumers were slow in buying midyear gifts and heavy rain reduced consumer traffic in western Japan. Among them, Takashimaya Co. sales fell 5.5 percent. |
| Jul 03 | Stay vigilant against yen's rise, stock falls (Yomiuri) |
| Although corporate sentiment about business conditions seems to be improving, evidence the economy has regained its vigor remains sketchy at best. Stock prices have tumbled, the yen has appreciated again, and the nation is still unable to shake off deflation. The campaign for the July 11 House of Councillors election is well under way. Each party has pledged to attain high economic growth. |
| Jul 02 | Central bank's 'tankan' survey shows economic improvement, but concerns remain (Mainichi) |
| In the Bank of Japan's quarterly "tankan" survey of business sentiment, the diffusion index for large manufacturers has risen to 1 in June -- the first time in two years a positive figure has been registered. |
| Jul 02 | Land prices plunged 8% in 2009 (Japan Times) |
| Land prices sank by an average of 8.0 percent in 2009 as the rise in office vacancies following the global financial crisis threw cold water on the real estate market, the National Tax Agency said Thursday. As of Jan. 1, the price of land in Japan had fallen in all 47 prefectures to an average of ¥126,000 per sq. meter, the agency said, or 2.5 points greater than in 2008, when prices also fell nationwide. |
| Jul 01 | What Japan needs to do to end deflation (East Asia Forum) |
| Japan is again haunted by deflation. While the nation is following the beef bowl price wars between fast food restaurants on television, the prices of consumer goods are falling and households are tightening their purse strings. Concurrently, companies are holding back investment and trying to cut costs to remain competitive. |
| Jul 01 | Kan proposes sales tax refunds for range of income levels (AP) |
| Prime Minister Naoto Kan proposed on Wednesday sales tax refunds for a range of income levels, indicating the kind of measures that may be considered in the event that the tax is hiked. In suggesting ahead of the July 11 House of Councillors election that the current 5-percent consumption tax rate could be doubled, the Democratic Party of Japan leader has said that refunds may be considered to alleviate the impact of an increase in the regressive tax on low-income earners. |
| Jun 30 | Govt panel suggests ID numbers for tax, welfare (Yomiuri) |
| A government study panel on Tuesday suggested the introduction by fiscal 2014 of a common identification number system to be used for taxation and social security programs such as pensions. The panel released a draft of ideas on the ID number system as an interim report that recommended issuing citizens numbers corresponding to those given for the Basic Residents' Registration Network, or Juki Net. After gathering public opinion on the draft, the government will draw up a concrete plan on the issue this year. The panel said it would take three or four years to implement the plan. |
| Jun 29 | Chinese tourists flock to Japan, lift weak economy (AP) |
| For years, Japanese auto and electronics companies have been expanding in China as its economy boomed to offset slow growth at home. But now, Japan's languishing economy is getting a lift from hundreds of thousands of Chinese tourists who are eager to flaunt their newfound wealth by purchasing brand name goods, from Canon digital cameras to Shiseido cosmetics. Last year, a record 481,696 Chinese tourists visited Japan, up nearly 20 percent from 2007, according to the Japan National Tourism Organization. While it's difficult to measure the precise impact of Chinese tourist spending, it is warmly welcomed by Japan's struggling retailers. |
| Jun 29 | Japan's jobless rate edges up in May, worsening 3rd straight month (AP) |
| Japan's jobless rate in May inched up to 5.2 percent, worsening for the third straight month, reflecting companies' cautious stance about adding payrolls due to uncertain economic prospects amid Europe's sovereign debt woes, government data showed Tuesday. But preliminary readings by the Internal Affairs and Communications Ministry also indicated that the number of job cuts stemming from corporate restructuring and business failures has dropped in the past two months. |
| Jun 29 | Japan unemployment rises as output slows (AFP) |
| Japan's unemployment rate rose unexpectedly in May as household consumption fell and factory production declined, illustrating the fragile nature of Japan's gradual recovery from recession. The unemployment rate edged higher in May to 5.2 percent, rising by 0.1 percentage points from the previous month, government data showed Tuesday. The rate fell below market expectations of 5.0 percent forecast by economists surveyed by Dow Jones Newswires. |
| Jun 28 | Growth in Japan retail sales slackens (Sydney Morning Herald) |
| Japan's retail sales expanded for the fifth straight month in May, though growth in spending lost momentum as government stimulus measures fade. Retail sales rose 2.8 per cent from the same month a year earlier, the government said Monday. The result compares with gains of almost 5 per cent in both March and April and marks the slowest growth since January. |
| Jun 28 | Raising tax hike idea now unlikely to stimulate economy: Thurow (Japan Times) |
| Prominent U.S. economist Lester Thurow is urging Japan to focus more on economic stimulus measures even though politicians appear more focused on raising the consumption tax. In an interview in Tokyo Friday, the 72-year-old Thurow, a professor emeritus at the Massachusetts Institute of Technology Sloan School of Management, said Japan should "stimulate, stimulate, stimulate" and "print all the money you can print" to engineer the economy to a recovery. |