News On Japan

Japan's economic recovery slower than thought

AFP — 2010-03-11 02:46:30

Japan's economy grew at a slower rate than previously thought in the fourth quarter of 2009, new data showed Thursday, raising fresh concerns over the country's recovery from a crushing recession. The world's number two economy expanded at a pace of 0.9 percent in October-December from the previous quarter, revised down from an initial estimate of 1.1 percent growth, the government said. And a revised figure for July-September showed a contraction of 0.1 percent, illustrating how Japan's nascent revival stalled in the third quarter. (AFP)

No easy solutions for U.S., Japan to revive economies

Japan Times — 2010-03-09 22:30:00

Even as Japan and the United States need deficit-funded stimulus now to stay on the recovery path, sustained large budget deficits will be a long-term problem that undermines their future growth prospects and must be addressed. But how? Tax hikes might be one inevitable solution, given that the two countries are near the bottom of the list of advanced economies around the world in terms of tax-to-gross domestic product ratio. U.S. data meanwhile suggest that tax reduction is a much more effective tool than increases in government spending as a tool to turn the economy around. (Japan Times)

Ensuring Japan's food security through free trade not tariffs

East Asia Forum — 2010-03-10 08:58:22

Japanese agriculture is in a free-falling decline. In the years between 1960 and 2005, the share of agricultural output in GDP dropped from 9 per cent to 1 per cent, the food self-sufficiency ratio from 79 per cent to 41 per cent, and agricultural land, indispensable for food security, from 6.09 million hectares to 4.63 million hectares. Meanwhile, the ratio of part-time farm households, which derive more than half their income from non-farm employment, increased from 32.1 per cent to 61.7 per cent. The percentage of farmers over 65 years old also jumped from 10 per cent to 60 per cent. (East Asia Forum)

Japan public pension fund to keep asset model

Reuters — 2010-03-10 09:15:05

Japan's public pension fund, the world's largest, will not change its asset allocation model for the next five years after the Health Ministry urged the fund to keep investing in safe assets, the Nikkei business daily reported. The Government Pension Investment Fund (GPIF) holds assets of about $1.4 trillion, larger than the gross domestic product of India, and is a major force in financial markets, particularly the Japanese government bond market. (Reuters)

Japan's finance minister battles for licence to print money

The Australian — 2010-03-10 09:15:05

Japan's Deputy Prime Minister and Finance Minister Naoto Kan wants the central bank to do something so unorthodox he wouldn't say what it was, so Bank of Japan policy board member Tadao Noda said it for him. "We need to be mindful of the risk of BoJ long-term bond purchases being interpreted as monetising debt, triggering rises in long-term interest rates that deviate from the economic outlook," Noda warned last week. (The Australian)

Japan's ODA helps developing nations to overcome crisis: white report

AP — 2010-03-09 08:54:54

Japan's official development assistance has played a significant role in helping developing countries to address and overcome the global financial crisis since the autumn of 2008, the Foreign Ministry said Tuesday. The government will continue to enhance ODA to Asian and African developing countries that are expected to achieve high economic growth, the ministry said in its annual ODA report. It will also take advantage of ODA to support the restoration of Afghanistan and the stabilization of Pakistan in accordance with the foreign policy of Prime Minister Yukio Hatoyama's government inaugurated last September. (AP)

Japan's key economic state index recovers to pre-Lehman shock level

AP — 2010-03-09 12:16:48

The key gauge of the current state of the Japanese economy rose 2.5 points in January from the previous month, recovering to a level not seen since the collapse of Lehman Brothers Holdings Inc. in September which triggered the global financial crisis, a government survey showed Tuesday. The composite index of coincident economic indicators stood at 99.9 against the 2005 base of 100, the highest level since July 2008, the Cabinet Office said in a preliminary report. (AP)

Number of cities surpasses that of towns for 1st time in Japan

AP — 2010-03-08 03:19:20

The number of cities in Japan surpassed the number of towns for the first time Monday as two towns in Yamanashi Prefecture merged into one town as part of a major state-led integration of local communities. There are now 784 cities and 783 towns after the towns of Masuho and Kajikazawa merged to become Fujikawa. Before the start of the large-scale integration process in April 1999, there were a total of 3,232 cities, towns and villages in Japan and 1,994 of them were towns, almost three times the number of cities, which stood at 670. (AP)

Japanese corporate bankruptcies decline for a seventh month

Bloomberg — 2010-03-08 06:32:11

Japanese corporate bankruptcies fell for a seventh month in February as emergency government programs helped companies stay afloat. Business failures slid 17.3 percent from a year earlier to 1,090 cases, Tokyo Shoko Research Ltd. said in Tokyo today, extending the longest streak of declines since 2005. The benefits of Japan's export-led recovery have been slow to spread to the country's smaller businesses, which employ 70 percent of the nation's workforce. Prime Minister Yukio Hatoyama has extended and expanded government lending programs installed at the height of the global financial crisis to prevent corporate failures from swelling. (Bloomberg)

Corporate failures fall for 7th month in Feb. with debts sharply down

AP — 2010-03-08 10:02:45

The number of corporate bankruptcies in February dropped 17.29 percent from a year earlier to 1,090 for the seventh consecutive month of year-on-year decline, with debts left by the failed firms falling sharply, a credit research firm said Monday. Liabilities accompanying the corporate failures plummeted 64.29 percent to 438.83 billion yen as credit became more readily available for companies due to government stimulus measures and a new law that came into force late last year to help out smaller firms, Tokyo Shoko Research said. (AP)

Japan's 'economy watcher' sentiment up for 3rd straight month

AP — 2010-03-08 10:02:45

Confidence among people with jobs sensitive to economic trends in Japan rose for the third straight month in February, amid signs of improvements in consumer spending, corporate activity and the employment situation, the Cabinet Office said Monday. The diffusion index of sentiment about the current economic conditions among so-called "economy watchers" gained 3.3 points from January to 42.1, the highest level since last September. (AP)

Japan: the fallen angel

guardian.co.uk — 2010-03-06 00:23:15

If you listen to American, European, or even Chinese leaders, Japan is the economic future no one wants. In selling massive stimulus packages and bank bailouts, western leaders told their people: "We must do this or we will end up like Japan, mired in recession and deflation for a decade or more." Chinese leaders love pointing to Japan as the prime reason not to allow any significant appreciation of their conspicuously undervalued currency. "Western leaders forced Japan to let its currency rise in the second half of the 1980s and look at the disaster that followed." Yes, nobody wants to be Japan, the fallen angel that went from one of the fastest-growing economies in the world for more than three decades to one that has slowed to a crawl for the last 18 years. (guardian.co.uk)

Debt-ridden Japan eyes holiday change to spur growth

Reuters — 2010-03-04 22:23:53

Debt-ridden Japan may finally have found a free way to spur economic growth -- have its 127 million people take annual "Golden Week" holidays at different times. A government panel has proposed splitting the country into five regional blocs and designating different five-day holiday weeks in the spring and the fall for each in an effort to boost demand and jobs in the travel and leisure sectors. "The Japanese economy will face a situation where growth is difficult. By spreading out the holiday periods, we may be able to... create new demand without having to increase public spending," an official at the Tourism Agency said. (Reuters)

Japan's Kan tackles sales tax 'taboo' that Obama won't touch

BusinessWeek — 2010-03-03 22:25:33

Finance Minister Naoto Kan's readiness to debate Japan's first sales-tax increase since 1997 signals the risk of a fiscal crisis may be weighing heavier with policy makers than dangers to economic growth. A government tax panel convenes in coming weeks to review changes and hear recommendations of a private-sector board, after Kan last month urged discussing the sales levy. He had previously focused on spending cuts, and Prime Minister Yukio Hatoyama pledged not to alter the 5 percent tax for four years. (BusinessWeek)

$170 bil. in infrastructure projects to spur E. Asia integration

AP — 2010-03-04 05:48:26

Japan and the Association of Southeast Asian Nations have prepared a report targeting several hundred projects amounting to $170 billion to jump start the development of infrastructure and resources in East Asia and spur economic integration in the region. The report, produced by the Economic Research Institute for ASEAN and East Asia (ERIA), a Japanese-government-funded policy think tank established in June 2008 after being endorsed at the 16-country East Asia Summit, is expected to be released at the end of this month. (AP)

No. of households on welfare reaches record 1.3 mil.

AP — 2010-03-04 09:47:14

The number of households on welfare reached a record 1,307,445 nationwide as of last December, following consecutive monthly increases since May 2008, the welfare ministry said Thursday. The number of welfare recipients rose 204,632 from a year earlier to 1,811,335 in the reporting month, the level seen in the mid-1950s, when many people relied on social aid during the aftereffects of postwar chaos, according to the Ministry of Health, Labor and Welfare. (AP)

Workers' wages post 1st rise in 20 months in Jan.

AP — 2010-03-03 03:37:04

Average monthly wages at Japanese companies with at least five employees edged up 0.1 percent in January from a year before to 273,142 yen, marking the first increase in one year and eight months since May 2008, a labor ministry monthly report showed Wednesday. The Health, Labor and Welfare Ministry attributed the increase to an upswing in overtime pay, which slumped sharply in January 2009 amid the global financial crisis following the collapse of Lehman Brothers Holdings Inc. in September 2008. (AP)

Gov't panel calls on introducing 5-day holidays in spring, fall

AP — 2010-03-01 20:52:01

A government panel has come up with a draft of holiday reforms that calls for introducing five-day consecutive holidays in spring and fall and setting separate dates for holidays in each of five blocs to be set up in Japan, sources close to the matter said Monday. By spreading the consecutive holidays over a certain period of time, the panel under the Land, Infrastructure, Transport and Tourism Minister Seiji Maehara hopes to alleviate the serious traffic congestion seen in the current Golden Week holidays in May or Obon holidays in August, and also promote tourism and employment off current leisure seasons. (AP)

Japan's jobless rate falls, spending increases

AP — 2010-03-02 05:14:00

Japan's unemployment rate fell for the second straight month in January and household spending posted solid growth despite a decline in wages -- further signs of recovery in the world's second largest economy. The jobless rate fell to 4.9 percent from a revised 5.2 percent in December, the Ministry of Internal Affairs and Communications said Tuesday. The result was better than the 5.1 percent expected by economists in a Kyodo News agency survey. "At least in the labor market, the worst is over," said Hideki Matsumura, senior economist at the Japan Research Institute. (AP)

Economic Gap Reduced Between Korea, Japan

Korea Times — 2010-03-02 05:23:35

Victories in soccer games and figure skating over the Japanese are usually what please South Koreans, but figures show that the economic gap between the two countries has reduced significantly over the past 20 years as well. Japan's economy was about 11 times that of South Korea two decades ago in terms of gross domestic product, but now it is only 5.3 times larger. The ratio of the value of the two countries' stock markets fell just as dramatically from 10 times to 4.5 times during the same period. The changes can be attributed to Korea's fast economic growth but also to Japan's sluggishness, a report from the LG Economic Research Institute said. (Korea Times)

Japan passes record $1 trillion budget

AFP — 2010-03-02 14:27:45

Japan's lower house on Tuesday passed a record trillion-dollar budget that will add to an already bulging public debt mountain as Tokyo tries to stimulate a recovery in the world's second biggest economy. The 92.3 trillion yen (1.0 trillion dollar) budget includes new child-care allowances, free public high school tuition and other measures promised by the centre-left government that took power in September. To finance it, the government will issue a record 44.3 trillion yen in new bonds. (AFP)

Plan eyed to ease farm tariffs to promote FTAs

Japan Times — 2010-02-28 21:39:17

The government may cut agricultural tariffs to promote free-trade agreements and reduce corporate taxes to make Japan more competitive and enticing for foreign investment, a draft report says. The report, released Saturday, maps out a broader strategy for growth through 2020 and proposes a system to let power utilities buy surplus electricity generated by households and businesses through technologies that promote renewable energy, such as solar power. (Japan Times)

Japan looks hard at trimming huge debt

Wall Street Journal — 2010-02-28 22:05:50

Will global markets start to treat Japan as the next Greece? Bond traders up to now have been relatively sanguine about Tokyo's massive pile of government debt. But that attitude could be tested over the next three months, as Japan's new center-left government nears a self-imposed June deadline for crafting a plan to get its fiscal house in order. Out-of-control sovereign debt is what plunged Greece into crisis. The main tool being considered to address Japan's debt problem is an increase in the nation's sales tax, which at 5% is currently among the lowest in the industrialized world. (Wall Street Journal)

Lessons to learn from Japan's ups and downs

Global Times — 2010-02-28 22:05:50

Mention of Japan stirs both awe and antipathy among many Chinese. The recent fiasco of Toyota seems to be yet another example adding to Japan's decline from its past glory. Again, Chinese people received the news with mixed feelings. Has Japan run out of steam in the race against Western developed countries? Will Japan's experience be repeated by other Asian countries, many of which have charted the Japanese growth model to the prosperity? Japan's history of ups and downs offers much food for thought. (Global Times)

Could fiscal regime collapse in near future?

Yomiuri — 2010-02-27 22:20:51

What constitutes the fiscal failure of a country? How would such a debacle affect our lives? It is not easy to give satisfactory answers to these questions. There is a great difference between corporate failure and sovereign failure. In the case of Japan Airlines, the carrier's outstanding debts would default if it went under, but it is hard to imagine a situation in which the Japanese government would default on its government bonds and other sovereign debts in the near future. Furthermore, while a company goes into liquidation in a case of corporate bankruptcy, no countries would perish even if their fiscal situations became chaotic--they would continue to exist as fiscally failed sovereign states. (Yomiuri)