Forty years after its founding, Japanese clothing retailer Uniqlo has more than 2,500 stores worldwide. Sales at its parent company, Fast Retailing Co, recently topped 3 trillion yen annually for the first time.

The name Uniqlo comes from joining the words for “unique” and “clothing.” The chain’s basic concept is “LifeWear,” or everyday clothing. Uniqlo parent Fast Retailing Co Chief Executive Tadashi Yanai, ranked by Forbes as Japan’s richest man and estimated to be worth $48 billion, spoke recently to The Associated Press at the company’s Tokyo headquarters.

The interview has been edited for length and clarity.


What were the biggest challenges over the past 40 years?

Actually 40 years, upon reflection, went by so fast they feel more like three years. You know what they say in Japan: Time flies like an arrow. I started a regional business, then expanded nationwide.

When we became No. 2 or No. 3 in Japan’s casual wear, and being No. 1 was right within reach, we became a listed company in 1994. That was followed by our fleece boom, which doubled our revenue in one year to 400 billion yen.

I’d been thinking about going global when our revenue reached 300 billion yen so we opened 50 stores in Great Britain, hoping to be a winner there just like we had conquered Japan.

Instead, we got totally knocked out.

We opened 21 outlets in a year and a half, but had to close 16 of them, leaving just five. We didn’t succeed as we had hoped. This is not an easy job. It’s very tough.

But these days, our sales are strongest in London, and also Paris. We made progress gradually.


What are some of the sustainability and other key issues you have faced over the years?

We make clothes that last a long time. Not just clothes that last for one season.

The cashmere sweater I’m wearing today is $99. But please don’t say “cheap.” Please call it “reasonable.” We sell quality products at reasonable prices.

We’ve done various sustainability efforts, and we talk only about what we have really achieved.

Sustainability is crucial to our operations. And we’ve done just about everything — recycling, employing the disabled, support for refugees.

The prices may be cheaper at Wal-Mart, but our products offer real quality for the price. We take the greatest care and time, and involve a lot of people. Our rivals are more careless.


What is behind Uniqlo’s success and what resonated with global buyers?

When we say Uniqlo is “made for all,” one might imagine products for the masses, like what’s at a Wal-Mart or a Target.

But what we mean is a high-quality product that appeals to all people, including the extremely rich, not only those with sophisticated taste and intelligence, but also people who don’t know that much about clothes, and the design is fine-tuned, the material fine quality, and sustainability concerns have been addressed.

We were first a retailer, then a manufacturer-cum-retailer. Now we are a digital consumer retailer. That is why we are successful. If we had stayed the same, then we can’t hope to succeed.

Being a digital consumer retail company means we utilize information at a high level to shape the way we do our work. We gain information about our customers, the workers at the store, the market, all that information.

Changing daily is the only way we can hope for stable growth. The world is changing every day.


Are you confident you can keep it up another 40 years?

Of course. We’ve been preparing to reach 3 trillion yen revenue all these years. And we are finally starting to be known. But we still have a long way to go.

We are just getting started, and we are going to keep growing. There is more potential for growth in Europe and the U.S., as well as China and India, given the 1.4 billion population in each country. Clothing is a necessity, so population size is key.
 
 

Indonesia and Japan have agreed to push the ratification of the Protocol to Amend the Indonesia–Japan Economic Partnership Agreement (IJEPA) so that it can be implemented in 2025.

This was discussed during a bilateral meeting between Indonesian Trade Minister Budi Santoso and Minister of Economy, Trade, and Industry of Japan, Yoji Muto, on the sidelines of the APEC Economic Leaders' Week 2024 in Peru on Thursday.

"At this bilateral meeting, both countries agreed to push for the completion of the ratification of the IJEPA amendment protocol. The ratification process is currently underway in both countries with an implementation target of 2025," Santoso informed in a statement issued on Friday.

The Protocol to Amend the IJEPA is an amendment and enhancement of the IJEPA commitment that has been in effect since 2008.

The Protocol to Amend the IJEPA includes chapters on Trade in Goods, Trade in Services, Trade Through Electronic Systems (E-Commerce), Movement of Natural Persons (MNP), Cooperation, Intellectual Property, and Government's Goods and Services Procurement.

"Indonesia is hoping for good cooperation and collaboration with Japan for the co-chairmanship of RCEP (Regional Comprehensive Economic Partnership) in 2025," he said.

He noted that the RCEP Support Unit (RSU) at the ASEAN Secretariat, Jakarta, will be inaugurated on December 9, 2024.

He expressed the hope that the implementation of RCEP can be made more effective and efficient to contribute to economic integration in the region.

Next year, Japan will hold the World Expo 2025 Osaka. Santoso said that Indonesia welcomes the implementation of the Osaka expo and will participate in it through the Indonesian Pavilion.

He also called upon all APEC economies to support multilateral trade and ensure its inclusiveness.

 

Bank of Japan Governor Kazuo Ueda underscored Monday that raising interest rates would be essential to prevent sharp inflation and ensure long-term economic growth, in remarks that could fuel market expectations the central bank is close to another rate hike.

The BOJ will continue to raise its policy rate if the economy and prices move in line with expectations, Ueda said in a speech, adding it is also closely monitoring the weakening yen. The Japanese currency has been under pressure after Donald Trump's victory in the U.S. presidential election triggered a rally in the dollar.

His remarks came amid speculation that the bank may lift borrowing costs as early as December, although Ueda said the BOJ will make policy decisions at each meeting based on its latest assessment and outlook for economic and price activities.

"I think that gradually adjusting the degree of accommodation in line with the improvement in economic activity and prices will support long-term economic growth and contribute to achieving the price stability target in a sustainable and stable manner," he told business leaders in the central Japan city of Nagoya.

If such adjustments are not made, inflation could possibly accelerate rapidly at some point in the future and force the BOJ to raise interest rates sharply, Ueda warned at a press conference later in the day.

On the timing of further increasing the policy rate from the current level of around 0.25 percent, Ueda said the bank also needs to carefully monitor the U.S. and other overseas economies.

The governor pointed out that it has become more likely that the U.S. economy will achieve a soft landing given recent solid economic data, but also noted the possibility of "a resurgence of inflation" as a result of future economic developments and policy conduct.

The U.S. dollar has been strengthening against the yen recently amid speculation that policies proposed by Trump would increase inflation and keep interest rates elevated.

At the press conference, the BOJ chief admitted the yen's depreciation has negatively impacted households and some companies and said the central bank has been paying close attention to economic factors influencing foreign exchange movements.

On domestic economic indicators, the governor said he has seen "some progress," pointing out wages are rising as companies are passing on increased labor costs via higher service prices.

Ueda said that underlying inflation, excluding short-term fluctuations such as a rise in import prices, still remains below the bank's goal of 2 percent, but it is expected to continue to rise gradually, helped by a rise in wages.

"Inflationary pressure stemming from wage increases is projected to strengthen as an improvement in economic activity and solid growth in wages continue," he said in the meeting with local business leaders.

The BOJ ended its negative rate policy in March with the first rate hike in 17 years, followed by another increase in July. It kept its policy rate unchanged at the September and October meetings.

The BOJ expects prices to rise 2.5 percent for the current fiscal year ending March and 1.9 percent for fiscal 2025 and 2026, below the bank's price stability goal of 2 percent, according to its latest outlook on economy and prices released in October.
 

 

Japan’s economy expanded by an annualised 0.9% over the July-September quarter, government data showed on Friday, slowing from the previous three months due to tepid capital spending.

The slower growth data highlights Japan’s frail economic recovery, as domestic demand has not fully picked up while a growing risk of a slowdown in the U.S. and further weakness in China’s economy could weigh on exports ahead.

The increase in gross domestic product compared with a median market estimate of a 0.7% gain, and followed a revised 2.2% growth in the previous quarter, the data showed.

The reading translates into a quarterly rise of 0.2%, versus a 0.2% increase expected by economists in a Reuters poll.

Private consumption, which accounts for more than half of the economic output, rose 0.9%, compared with a market estimate of a 0.2% increase.

It picked up slightly from the revised 0.7% rise of the previous quarter, indicating that rising wages are prompting households to spend more.

Capital spending, a key driver of private demand-led growth, fell 0.2% in the third quarter, matching a decrease of 0.2% in the Reuters poll.

Net external demand, or exports minus imports, knocked 0.4 point off growth, reversing a 0.1 point negative contribution in the April-June period.

The Bank of Japan maintained ultra-low interest rates last month and said risks around the U.S. economy were somewhat subsiding, signalling that conditions are becoming conducive to raise interest rates again.
 

 

The Japanese owner of 7-Eleven is considering going private by buying back its own shares in a bid to avoid a takeover by Canadian rival Couche-Tard, reports said on Wednesday.

Seven & i Holdings is eyeing the move as a countermeasure to Circle K owner Alimentation Couche-Tard's seven trillion yen takeover proposal, the Nikkei business daily said.

The takeover, if realized, would be the biggest ever foreign buyout of a Japanese firm.

With around 85,000 outlets worldwide, 7-Eleven is the world's biggest convenience store chain. Around a quarter of those are in Japan, where the stores are a cherished one-stop shop for everything from rice balls to concert tickets.

Bloomberg News also reported Wednesday that Seven & i was considering a management buyout, or MBO, worth up to nine trillion yen -- above its market cap of 5.7 trillion yen.

A Seven & i spokesman told AFP there was "nothing for public release at this point".

The 7-Eleven franchise began in the United States, but it has been wholly owned by Seven & i since 2005.

Meanwhile, Couche-Tard, which began with one store in Canada's city of Laval in 1980, now runs nearly 17,000 convenience store outlets worldwide.

The Nikkei, citing sources close to Seven & i, said the company had begun talks with financial institutions to procure the necessary resources to buy its own shares.

But it said potential obstacles could include whether the banks would agree to the huge loans required, and also whether Seven & i's founding family would support the plan.

In September, Seven & i rejected an initial takeover offer from Couche-Tard, saying it "grossly" undervalued its business and could face regulatory hurdles.

Then the group said last month it had received a revised offer that reportedly totaled around seven trillion yen.

To boost its share price and fend off Couche-Tard, Seven & i has also announced a major restructuring, including plans to spin off its non-core businesses.

To allow it to focus on 7-Eleven, its new holding company will comprise its supermarket food business, speciality stores and other businesses.
 
 

Measures for economic growth to increase wages and income, as well as ones to deal with rising prices, will be pillars of the government’s comprehensive economic measures to be compiled by the end of the month, according to a draft obtained by The Yomiuri Shimbun.

The draft stipulates more than ¥10 trillion in support for the artificial intelligence and semiconductor sectors, as well as the distribution of benefits to households that are exempt from residential taxation.

The draft names three primary goals: national and regional economic growth; overcoming high prices; and ensuring the safety and security of the public.

Regarding economic growth, the draft states the government’s intention to create a framework for strengthening the foundations of the AI and semiconductor industries; at least ¥10 trillion worth of public support will be provided through this framework over multiple fiscal years in the form of subsidies, financial support and other assistance.

The draft says the measure will stimulate public and private investment in the sectors, which are expected to exceed ¥50 trillion over the next 10 years.

The draft also calls for discussions to be held between the government, labor and management at an early stage with the aim of raising minimum wages across the country to an average of ¥1,500 per hour before the end of the 2020s.

According to the draft, among households that are exempt from residential taxation, those which are raising children will receive increased benefits corresponding to the number of children they have.

The government is also looking to quickly reinstate a measure to reduce burden of electricity and gas bills which expired at the end of October.

As for ensuring the safety and security of the public, the draft includes measures to improve living conditions at evacuation centers, which are opened when a disaster strikes.

Measures to deal with the problem of so-called “dark part-time jobs” — through which people have been recruited for robberies and fraud on social media — are also part of the draft, including support for efforts to strengthen local crime prevention capabilities.

The Democratic Party for the People has been calling for a review of the so-called ¥1.03 million barrier, the annual income threshold above which income tax is incurred, among other things, but there was no mention of them in the draft, since concrete measures regarding the issue still have to be discussed with the DPFP.
 
 

Honda Motor Co plans to end production of its iconic Super Cub 50 motorcycle in May 2025 ahead of the introduction of stricter vehicle emissions standards in Japan later that year.

Honda will begin selling the "Final Edition" model of the 50 cc engine motorcycle on Dec 12 at a suggested retail price of 297,000 yen.

The company plans to take orders until Nov 24 and sell 2,000 units, but it could extend the ordering period depending on demand, according to officials.

Production of its Super Cub 110 motorcycle with a 110 cc engine will continue.

Honda, which holds the largest market share of motorcycles with 50 cc or smaller engines, has decided it would be difficult to keep the motorbikes at an affordable price point should the company implement changes necessary to have it comply with new regulations scheduled to take effect in November 2025.

The automaker launched the Super Cub series in 1958 and has since manufactured over 100 million units to make it the most-produced motorcycle in the world.

However, its sales have dwindled in recent years due to the rise in demand for electric bicycles and scooters.

Honda also plans to end production of other motorcycles with 50 cc or smaller engines by October 2025 and will instead increase production of electric scooters.
 

 

Sony's net profit jumped in the second quarter thanks to stronger sales in gaming, music and imaging sensors, the PlayStation maker said Friday but left its annual profit forecasts unchanged.

The yen's weakness against the dollar and euro had a positive impact on takings in those key sectors, the Japanese conglomerate added.

However, Sony Pictures suffered from "lower series deliveries in Television Productions, in part due to production delays related to the strikes in Hollywood".

For the three months from July to September, Sony logged net profit of 338.5 billion yen, up 69 percent from 200.1 billion yen in the same period a year ago.

It still forecasts a full-year net profit of 980 billion yen.
The company also maintained its operating profit outlook, but revised its sales forecast upwards slightly.

Sony's earnings release comes a day after its PlayStation 5 Pro console hit shelves, with a price tag that has raised eyebrows among gamers.

In Europe the device costs an eye-watering 799.99 euros ($860) -- 250 euros higher than the older version -- and almost 120,000 yen ($780) in Sony's home market of Japan.

Yet Sony is not the only tech company making consumers fork out for their latest devices, and growing sticker shocks in the tech industry have yet to deter consumers.

The company said Friday that an increase in sales for imaging sensors -- used in phone cameras -- as well as the "positive impact of foreign exchange rates" contributed to growth in the operating profit for that segment.

The yen hit a four-decade low against the dollar in July, having plunged in value since early 2022.

Music streaming is also a money-spinner for Sony, which has an impressive back catalogue and whose current roster includes top artists such as Beyonce and Lil Nas X.

According to recent reports in Variety and the Financial Times, citing sources, British rockers Pink Floyd have agreed to sell their recorded music and name-and-likeness rights to Sony Music for around $400 million.
 


 

Nippon Steel Corp hopes to complete its planned acquisition of United States Steel Corp by the end of the year, before U.S. President-elect Donald Trump returns to the White House, an executive said.

"We are now in a position to make measured discussions," Nippon Steel Vice Chairman and Executive Vice President Takahiro Mori told a press conference. "Make no mistake, we can close this deal within the year" ahead of Trump's January inauguration, he added.

Both Trump, who claimed victory and a nonconsecutive second term as president in Wednesday's election, and outgoing U.S. President Joe Biden have said they would block the takeover of the iconic American firm by Japan's largest steelmaker.

The U.S. Committee on Foreign Investment is reviewing the proposed acquisition until late December.

Mori said the review process was going "smoothly."

But even if the Biden administration had approved of the takeover, a possibility remained of a government under Trump overturning it.

"The previous Trump administration said it would attract foreign investment and create new jobs," Mori said. "This (acquisition) is extremely in line with such a policy."


© KYODO
 
 

Japanese auto giant Toyota kept its annual net profit forecast unchanged on Wednesday, despite logging a 26 percent drop for the first half of this financial year.

The world's top-selling automaker said unit sales were hit by production cuts in its home market, related to a failure to fully comply with vehicle inspection standards.

In April to September, Toyota reported net profit of 1.9 trillion yen, down from 2.6 trillion in the same period a year ago.

Although its second-quarter earnings were far lower than analyst expectations, the company still forecasts full-year net profit of 3.57 trillion yen.

"We will strive to maintain and strengthen our earning power," it said in a statement.

Chief Financial Officer Yoichi Miyazaki said a boost to global production would help the company catch up.

"Our Indiana plant in the United States, which had been partially shut down, resumed operations last month and we will return to a production pace of 10 million vehicles per year globally," he said.

Unit sales fell four percent in the first half of 2024-25, partly "due to the impact of halting production to address certification issues", the company said.

In June, the Japanese government told Toyota and its rivals Honda, Mazda, Suzuki and Yamaha to stop delivering certain vehicle models domestically because of these irregularities.

The automakers insisted that the quality of their vehicles was not in question, arguing that their own testing was in some cases stricter than the official standards.

Miyazaki said Toyota had taken time to rethink its approach so the group can "prioritise safety and quality".

Toyota also said Wednesday that fluctuations in the value of the yen had caused "valuation losses in foreign currency-denominated assets".
But this factor "does not indicate an actual deterioration in business", the automaker said.

In fact at the same time "the effects of foreign exchange rates, cost reduction efforts, and marketing efforts increased operating income", it added.
Toyota lowered its annual group production outlook to 10.85 million vehicles from the previous target of 10.95 million.

The company had reported record bumper results last year, driven by strong sales of hybrid vehicles -- which combine internal combustion engines and batteries -- an area that Toyota pioneered with the Prius.



© 2024 AFP
 
 

Nintendo Co. said Wednesday that the successor to its Nintendo Switch flagship game console will be compatible with existing Switch games.
Nintendo Switch Online, a paid service, will be also available on the successor console, the company said.

Nintendo President Shuntaro Furukawa made the announcement during an online management policy briefing.

Nintendo has sold more than 1.3 billion game units for the Switch as of the end of September since its launch in 2017. This is the highest number of sales among the company’s game consoles.

Nintendo Switch Online — which allows users to save their game data, play online with others and access retro games — has more than 34 million subscribers.

“We’ve concluded that it would be best that the existing games be playable on the successor console,” Furukawa said.

The company is scheduled to make a formal announcement about the successor console by March next year. Furukawa stopped short of providing the details of the successor, only stating, “We will give you more information at a later date.”
 
 

Japan stocks were higher after the close on Wednesday, as gains in the Glass, Transportation Equipment and Banking sectors led shares higher.

At the close in Tokyo, the Nikkei 225 gained 2.16%.

The best performers of the session on the Nikkei 225 were IHI Corp. (TYO:7013), which rose 18.70% or 1,455.00 points to trade at 9,235.00 at the close. Meanwhile, Mitsubishi Heavy Industries, Ltd. (TYO:7011) added 9.42% or 194.00 points to end at 2,254.00 and Japan Steel Works Ltd (TYO:5631) was up 7.94% or 405.00 points to 5,508.00 in late trade.

The worst performers of the session were Mercari Inc (TYO:4385), which fell 16.05% or 348.50 points to trade at 1,823.00 at the close. Honda Motor Co Ltd (TYO:7267) declined 5.84% or 88.50 points to end at 1,427.50 and Panasonic Corp (TYO:6752) was down 4.98% or 71.00 points to 1,355.00.

Rising stocks outnumbered declining ones on the Tokyo Stock Exchange by 2343 to 1270 and 242 ended unchanged.

Shares in IHI Corp. (TYO:7013) rose to 5-year highs; gaining 18.70% or 1,455.00 to 9,235.00.

The Nikkei Volatility, which measures the implied volatility of Nikkei 225 options, was up 1.09% to 26.03.

Crude oil for December delivery was down 1.99% or 1.43 to $70.56 a barrel. Elsewhere in commodities trading, Brent oil for delivery in January fell 2.00% or 1.51 to hit $74.02 a barrel, while the December Gold Futures contract fell 1.15% or 31.75 to trade at $2,717.95 a troy ounce.

USD/JPY was up 1.67% to 154.13, while EUR/JPY fell 0.34% to 165.16.
The US Dollar Index Futures was up 1.74% at 105.12.
 

Japanese textile maker Toray Industries Inc. said Wednesday that it will end the use of promotional models known as Toray campaign girls after 43 years.

The Toray campaign girl program, launched in 1981, will be discontinued in December this year as it has achieved its aims, the company said.

Campaign girls were initially tasked with promoting swimsuit materials produced by the company but have since taken on roles such as appearing in company-related events and engaging in regional exchange programs.

 

Actors Tomoko Yamaguchi and Norika Fujiwara served as Toray campaign girls. The position has been held by Haruka Mase since 2022.

Industry peer Asahi Kasei Corp. ended its promotional model program in March 2022.
 
 

The delegation of the Japan Association of Corporate Executives (Keizai Doyukai) on Monday called for China to exempt Japanese short-term visitors from visa requirements soon in its first visit to the country in eight years.

Doyukai Chairperson Takeshi Niinami among others met Chinese Vice Premier Han Zheng at the Great Hall of the People in Beijing on the day and also called for China’s active participation in the 2025 Osaka-Kansai Expo.

“I expect [Doyukai] to continue acting as a bridge for China-Japan economic and trade exchange and helping the two countries deepen their cooperation,” Han said at the meeting.

Niinami told reporters after the meeting that he felt “a positive will” from China regarding visa exemptions.

On Friday, the Chinese Foreign Ministry added nine countries, including South Korea and Norway, to the list of countries eligible for visa exemptions, but Japan was not included. Neither side is said to have brought up the incident of a Japanese schoolchild and others being assaulted in China.

It was the first Japanese business group visit in four years after the Japan-China Economic Association in January. Business associations in the Kansai region, including the Kansai Economic Federation, are scheduled to visit later this month.
 
 

The Tokyo Stock Exchange has extended its trading hours by 30 minutes starting Tuesday without any trouble on the first day, as it aims to make the bourse more attractive to foreign investors and boost dealing activity.

With the first extension of its closing time in 70 years, the Tokyo market will now operate from 9 a.m. to 3:30 p.m. with an hourlong lunch break, according to Japan Exchange Group Inc., the parent of the bourse's operator.

The market's trading hours were last adjusted in November 2011, when the morning session was extended by 30 minutes to end at the current 11:30 a.m.

But it remains unclear whether the latest change will immediately lead to increased trading activity on the Tokyo stock market, analysts said.

The trading volume on the top-tier Prime Market stood at around 1.9 billion shares on Tuesday, less than Friday's roughly 2.0 billion stocks, JPX data showed.

Prior to the TSE, the Korea Exchange extended its market close by 30 minutes to 3:30 p.m. in August 2016.

However, the daily average trading volume in the year ended July 2017 fell 17.5 percent from the previous year. While the volume recovered the following year, it remained below the level seen before the extension.

The longer trading hours at the Tokyo market also aim to give investors more time to trade in case of any trouble, such as a system outage, according to the bourse, which has nearly 4,000 listed companies.

The TSE suffered an all-day system shutdown in October 2020 due to a system glitch, prompting debate about extending the market's trading hours to lessen the impact of a system failure on trading opportunities.

Even after the latest change, the TSE will still offer a shorter trading day than the world's other major bourses, such as the New York Stock Exchange, which operates for six and a half hours, and the London Stock Exchange, which is open for eight and a half hours.

With the extension, the Tokyo bourse also introduced a new "closing auction" system in which buy and sell orders in the last five minutes of trading will only be accepted to determine closing prices.

The TSE hopes the time extension will also prompt listed companies to review their practice of announcing earnings and other important news after the market closes, and to release such information in a timelier manner to avoid a rush of releases at the same time.

Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co., said the measure will likely help attract overseas investors, especially in other parts of Asia, even if the bourse still offers shorter trading hours than other markets.

Meanwhile, Makoto Sengoku, senior equity market analyst at Tokai Tokyo Intelligence Laboratory Co., said the bourse has taken some positive measures to attract more investment, such as urging companies to increase corporate value.

"To increase trading volume, it is necessary to show that Japan is an attractive market backed by the growth of domestic companies," he said, adding that some years will be needed for the bourse to achieve its goal.
 


 

 

Nissan Motor Co. and Mitsubishi Corp. have decided to establish a joint venture by the end of fiscal 2024 to provide services involving self-driving cars and electric vehicles, it has been learned.

The two companies aim to provide a service to transport passengers using Level 4 autonomous driving technology — in which the vehicle under certain conditions does not require a human to be involved in driving — and electric vehicle batteries for at-home energy storage, among other services.

The joint venture will be funded equally by the automaker and the trading company. Verification tests will begin in 2025.

Regarding autonomous driving, Nissan is currently developing the vehicles, while Mitsubishi is working to commercialize a system utilizing artificial intelligence that can figure out optimal routes.

Based on the results of the developments, the joint venture will operate unmanned taxis and other services in accordance with the government’s deregulation measures.

The services will first be introduced in Yokohama, Kanagawa Prefecture, and Namie, Fukushima Prefecture. Nissan is conducting demonstration experiments on automated driving and other technologies in both locations.

In terms of EV batteries, the two companies are looking into a service that would connect EVs to homes and power grids, allowing people to use the electricity stored in their cars at home or sell it to power companies.

They are also eyeing a project that promotes the collection of used EV batteries for secondary use and recycling, as a problem has emerged in which many used EV batteries end up overseas.

Nissan plans to increase sales figures for businesses related to autonomous driving and EVs to ¥2.5 trillion by fiscal 2030, but the automaker had faced difficulties in conceptualizing businesses that would utilize the vehicles themselves.

Mitsubishi is expediting its moves to invest in start-ups and other companies that develop software in autonomous driving, anticipating future expansion in the market for autonomous driving against the backdrop of the declining birthrate, aging population and shortage of labor.

The company is also working with major automakers in the field of EV batteries.
 
 

 

A Japanese trade promotion agency has opened an office in Kyiv to facilitate private businesses' entry into Ukraine, in one of Japan's latest efforts to support the war-ravaged country's economy amid Russia's prolonged invasion.

The government-backed Japan External Trade Organization launched the office on Oct 10, and it has already begun conducting research, providing information on local investment conditions and offering business-matching opportunities for Japanese firms.

At a ceremony held in the Ukrainian capital to commemorate the launch, Japanese Prime Minister Shigeru Ishiba said in a video message that he hopes the JETRO Kyiv Office will "serve as a bridge for the further development and prosperity of our two countries."

"Japan will continue to contribute to the sustainable development of Ukraine through public-private partnership by providing 'uniquely Japanese' support to address the challenges Ukraine faces, such as economic reconstruction and a stable energy supply," said the prime minister, who took office on Oct 1.

The event was attended by key Ukrainian political and business figures, among whom Prime Minister Denys Shmyhal was quoted by JETRO as expressing hope that the office will lead to promotion of investment that will benefit both countries.

Also among the participants were representatives from 10 firms dispatched as part of a Japanese business mission, including agricultural startup Waku Inc, which is developing a new type of organic fertilizer.

The company's CEO Ryosuke Himeno said it hopes to make inroads into Ukraine -- a major agricultural exporter -- faster than other companies, even as the war continues.

The establishment of a JETRO office in Kyiv was part of a series of agreements reached during a Japan-hosted Ukraine reconstruction conference in February.

As of October 2023, 38 Japanese companies were engaged in business activities in Ukraine in the fields of manufacturing, wholesale, information and communication technology and agriculture, according to JETRO.

Since Russia's full-scale invasion began in February 2022, Japan, in accordance with its war-renouncing Constitution, has primarily provided nonmilitary support to Ukraine, unlike Western nations that have supplied weapons and ammunition.

 
 

Hello Kitty, arguably Japan's best loved creation, is celebrating her 50th anniversary.

But all has not always been well at Sanrio, the Japanese company behind the character. The business has been on a spectacular journey of financial peaks and valleys.

Hello Kitty has been ranked the second-highest grossing media franchise in the world behind Pokémon, and ahead of the likes of Mickey Mouse and Star Wars.

Underscoring her global fame, Britain's King Charles wished her a happy birthday during the state visit to the UK by Japan's Emperor and Empress in June.

In recent years though Sanrio had been struggling to make money, as interest in Hello Kitty waned.

Two previous surges in Sanrio sales, in 1999 and 2014, were both driven by the character's popularity. But these jumps in demand for the firm's products were not sustainable, says Yasuki Yoshioka of investment company SMBC Nikko.

"In the past, its performance had many ups and downs, as if it was on a rollercoaster ride," Mr Yoshioka says.

 

Then, in 2020, Tomokuni Tsuji inherited the role as Sanrio's boss.

 

He is the grandson of the firm's founder, Shintaro Tsuji, and was just 31 at the time, making him the youngest chief executive of a listed Japanese company.
 
His grandfather then became Sanrio's chairman.
 
Under the younger Mr Tsuji's leadership, Sanrio changed its marketing strategy of its stable of other characters.
 
"It is not about lowering Hello Kitty's popularity but it is about boosting others' recognition," he says.
 
This resulted in Hello Kitty losing the position of Sanrio's most popular character.
 
According to a poll of customers, that spot is now held by Cinnamoroll - a blue-eyed white puppy with pink cheeks, long ears and a tail that looks like a Cinnamon roll.
 
Sanrio is also no longer just about cute characters.
 
If Hello Kitty is Japan's ambassador of cute, then angry red panda Aggressive Retsuko - or Aggretsuko - channels the frustrations of an ordinary working woman.
 
The character, which is popular among Gen Zers, first appeared in a cartoon series on Japan's TBS Television before it became a global hit on Netflix.
 
Another unconventional character is Gudetama, or "lazy egg", who is living with depression and fires out cold one-liners that reflect dark realities of life.
As well as diversifying its characters, Sanrio boosted its overseas marketing and is now tackling counterfeits more rigorously.

"We are now using artificial intelligence to detect fake products and to make removal requests," says Mr Tsuji.

For its marketing strategy, collaborations with major brands - including Starbucks, Crocs and the LA Dodgers baseball team - have been key, he added.

 

"In addition to our own promotion, by collaborating with global brands, we are trying to have our characters in the market throughout the year without many breaks."

In a society that puts so much emphasis on seniority, Mr Tsuji's surname was crucial to his ability to make major changes at Sanrio.

Almost a quarter of listed companies in Japan, like car makers Toyota and Suzuki and camera firm Canon, are managed by members of the family that founded them.

The reason is cultural, according to Professor Hokuto Dazai of Nagoya University of Commerce and Business.

In Japan, home to the world's oldest continuous monarchy, "there is strong recognition of families and family businesses," he says.

The master-servant relationship from the samurai period has transitioned into the relationship between founding families and their employees, and "historically commoners never fought over the top job".

"It is also because Japan has a smaller pool of professional executives to choose from," says Professor Dazai.

"Firms tend to look for their next boss internally, including founding family members."

Still, "it would be a lie if I said there was no pushback" from other managers and employees in the company, Mr Tsuji says.

He also says he clashed with his grandfather over how to run the company.
"But one day I realised that I was being arrogant, trying to convince someone 60 years senior," he says.

"After about a year, my grandfather told me to run the company as I see fit - that he will leave it up to me."

The new boss's revamp of the business has been paying off so far.
Within two years of the younger Tsuji becoming chief executive, Sanrio was profitable again, in what analyst Mr Yoshioka calls "a beautiful V-shaped recovery".

Its share price has risen tenfold since 2020 and the company now has a stock market valuation of more than a trillion yen ($6.5bn; £5bn).
Away from the boardroom and stock market, there was also an intriguing incident earlier this year.

While Hello Kitty's true identity is relatively well-known in Japan, some overseas fans were shocked by comments from a Sanrio executive in July.

Speaking on US television, retail business development director Jill Koch told viewers that “Hello Kitty is not a cat” and is in fact a British schoolgirl.

Her comments sparked a flurry of social media posts, with fans expressing their shock and confusion about the revelation.

"Hello Kitty is Hello Kitty and she can be whoever you want her to be - she can be your sister, your mother, it can be another you," Mr Tsuji says.

Pushed on whether he has any idea why his grandfather decided not to make her Japanese, Mr Tsuji concludes: "London is an amazing city and it was the envy of many Japanese girls, so that may be one of the reasons they decided that she’s from London."

It may not be the definitive answer her fans are looking for - but after all, Hello Kitty was created 14 years before the younger Tsuji was even born. Half a century since her creation, it is possible that the beloved character's origin story will continue to be shrouded in mystery for years to come.
 
 

The dollar hit three-month highs against the yen on Tuesday as the loss of a parliamentary majority for Japan's ruling coalition in weekend elections muddied the political and monetary picture, while sterling was firm ahead of a new British budget.

The Chinese yuan, which touched its weakest level against the dollar since mid-August, showed little reaction to the possibility Beijing may issue over $1.4 trillion in new debt as part of a series of measures to shore up the economy.

The dollar is heading for its largest monthly rise against a basket of major currencies in 2-1/2 years, and holding near three-month highs, ahead of a slew of U.S. employment and inflation data this week that could determine the path for Federal Reserve policy.

Recent data have highlighted the resilience of the U.S. economy, which, together with mounting market bets of a win by Republican candidate Donald Trump in next week's U.S. presidential election, have underpinned the dollar and pushed up Treasury yields.

"It's still my view that the FX market is only really thinking of one trade at the moment, which is a strong dollar," XTB research director Kathleen Brooks said.

The dollar index has risen 3.6% so far in October, marking its best monthly performance since April 2022. It is up this year against every major currency except the pound .

This week's data slate includes the September U.S. core personal consumption expenditures price index - the Fed's preferred measure of inflation - on Thursday, as well as a flurry of jobs reports.

With the dollar looking unlikely to budge much from its recent highs, other currencies came under pressure, most notably the yen, which has fallen to its lowest since July after Japan's election on Sunday left the make-up of the future government in flux.

"All up, the risks appear skewed to looser fiscal policy than otherwise under the new government," said Carol Kong, a currency strategist at Commonwealth Bank of Australia.

"Heightened financial market volatility might also encourage the Bank of Japan to keep its policy interest rate unchanged for longer than we currently expect."

The yen has lost nearly 10% in value since September's 14-month high against the dollar . The dollar meanwhile, was last up 0.1% on the day at 153.415 .

The BOJ announces its monetary policy decision on Thursday, and is widely expected to leave rates unchanged.


COUNTDOWN TO BUDGET

In Europe, the pound edged up 0.1% to $1.2983 , a day before the Labour government's first budget.

Finance minister Rachel Reeves, along with Prime Minister Keir Starmer, has reiterated the need for tough fiscal measures to help close a hole in British public finances, all while seeking to retain the confidence of investors, two years after then-Prime Minister Liz Truss' tax-cutting plans sparked a crisis in the bond market.

Key for sterling will be estimates from the British Office for Budget Responsibility, which makes the forecasts that underpin the government's spending and tax plans.

"The fact that cable is hanging around at the $1.30 level is a sign that the markets are ready to go after tomorrow," XTB's Brooks said.

"As long as growth is significantly revised up in the longer term, at the same time that debt levels are falling... as long as those two things are good, we could jump back above $1.30."

The euro dipped 0.1% to $1.08 against the dollar and was down 0.2% against sterling at 83.19 pence .

China's yuan weakened to its lowest level in over two months. Two sources with knowledge of the matter told Reuters China's top legislative body, the Standing Committee of the National People's Congress, is looking to approve a new fiscal package, including 6 trillion yuan which would partly be raised via special sovereign bonds, on the last day of a meeting to be held from Nov. 4-8.

The yuan weakened by as much as 0.26% to 7.165 in the offshore market, while its onshore counterpart bottomed at 7.1419 per dollar.
 
 

West Japan Railway Co. has developed a stab-resistant umbrella that will be used to protect passengers and crew members from knife-wielding assailants on trains.

JR West will from November start placing two of these protective umbrellas in crew cabins on about 600 trains running on conventional lines in the Kinki region, which includes Osaka and Kyoto.

Each umbrella is about one meter long and has a diameter of about 1.1 meters when opened. Covered in a special material that is difficult for blades to cut, the opened umbrella can help protect the holder from being slashed.

The umbrella weighs about 700 grams, which is considerably lighter than shields and other similar protective equipment. The meshed fabric also allows the holder to look through the umbrella and keep an eye on the assailant.

In July 2023, a knife-wielding man stabbed three people, including two passengers, on a JR Kansai Airport Line train in Osaka Prefecture.

JR West has been equipping some of its trains with protective equipment such as shields, stab-resistant vests and stab-resistant gloves, but the railway operator developed an umbrella that will be easier to use.

“We’ll make additional efforts to improve the safety of our passengers ahead of next year’s Osaka-Kansai Expo,” a JR West official said.
 
 

Bank of Japan Governor Kazuo Ueda on Wednesday warned of the risks of moving too slowly in raising interest rates, saying striking the right balance is crucial for the Japanese economy to grow in a sustainable way.

"Uncertainties are everywhere, any time...when there's huge uncertainty, you usually want to proceed cautiously and gradually," Ueda said at an event in Washington, held on the sidelines of the International Monetary Fund and the World Bank's autumn meetings.

But he said it would be problematic "if you proceed very, very gradually" and trigger expectations that interest rates will stay at low levels for a long period.

"This could lead to a buildup of huge speculative positions, which could become a problem later," he said. "We need to strike a balance between the two."

He also said it is "still taking time" for Japan to achieve the BOJ's inflation target in a sustainable manner.

His remarks came after the U.S. dollar hit a three-month high against the Japanese currency, briefly entering the 153 yen range.

The yen's continued weakness, which has increased import costs, reflects expectations that the interest rate gap between the United States and Japan will not narrow significantly anytime soon.

Asked what keeps him awake at night, given that the Japanese economy is at a delicate juncture, Ueda, the first academic economist to lead the BOJ in postwar Japan, said thinking about "what would be the right size of normalization in total going forward and how best to allocate that total rate hikes across time."

While suggesting the need for more rate hikes, he said, "It's very hard to pin down the appropriate size" from hereafter, partly because of uncertain external factors, including the difficulty in predicting the course of the U.S. economy.

On the yen's depreciation, Japanese Finance Minister Katsunobu Kato told reporters later Wednesday that he has been seeing "one-sided, rapid moves" lately.

Speaking after participating in the first day of a two-day meeting of Group of 20 finance chiefs, Kato said he will "increase my sense of urgency" and closely monitor developments in the currency market.
 
 

Taisei Hikage is fighting a losing battle at his Tokyo ramen shop - not to attract customers, but to keep a lid on the price he charges for Japan's national comfort food in the face of an incessant rise in ingredient and fuel costs.

Since opening his shop in the west of the capital a year and a half ago, Hikage, 26, has raised menu prices three times but still struggles with rising costs. His top-selling "Special Ramen" is up 47%, selling for 1,250 yen ($8).

"Traditionally ramen shops were supposed to offer something cheap and tasty," Hikage said between stirring big pots of broth and blanching noodles. "It's no longer cheap food for the masses."

The problems facing ramen vendors - a record number of shop operators are set to go bankrupt this year - reflect a cost-of-living crunch that has become a top issue for voters in Japan's general election on Sunday.

The ruling Liberal Democratic Party of Prime Minister Shigeru Ishiba, a self-described ramen fanatic, and opposition parties have pledged various measures to offset rising costs for businesses and households.

Those efforts to control rising prices, in a land emerging from decades of deflation, could tip an election where opinion polls show the LDP - which has ruled Japan for almost all of the post-war era - might lose its parliamentary majority.

Hikage, who said he will be too busy working in his restaurant to vote, hopes the victors will consider introducing subsidies to offset rising costs.

His award-winning noodles remain in demand despite the repeated price hikes, with long queues in front of his shop day and night.

Some of his competitors are not faring so well: 49 ramen shop operators with debts of at least 10 million yen filed for bankruptcy in the first seven months of the year, on track to exceed the 2020 record of 54 bankruptcies, according to credit research firm Teikoku Databank.


'Weeded out'

Hikage prides himself on using mostly domestic ingredients, but many ramen restaurants rely heavily on imported materials, like the flour to make noodles.

Japan's import costs have risen as the yen has sunk. The currency hit a 34-year low against the dollar this year and has struggled to regain ground. Also boosting costs for ramen shops are higher energy and grain prices, triggered by Russia's war in Ukraine, as well as rising labor costs.

The plight of Japan's ramen shops illustrates a larger trend, as companies that fail to adjust to the era of inflation go under.

Nationwide bankruptcies in the six months to September jumped 18.6% from the same period last year to 4,990 cases, with a record number caused by inflation, said Teikoku Databank.

"Just like ramen shops, companies offering goods and services that are in demand are transferring costs to product prices and seeing their sales grow.

Those struggling to pass on higher costs are being weeded out," said Dai-ichi Life Research Institute's executive chief economist Toshihiro Nagahama.

But Nagahama said politicians' tendency to dish out support measures to win votes may be counterproductive in the long term.

"If too many 'zombie' firms, or companies that cannot raise productivity or wages, are kept alive, they could be a drag on the Japanese economy," he said.

For now, Hikage said he will focus on serving quality dishes and hopes the election can bring some kind of positive change.

"Our task now is to endure this and focus on offering something delicious, with our heads bowed to customers," he said.
 
 

The dollar rose above ¥152 to hit another three-month high in Tokyo trading on Wednesday, backed by higher U.S. Treasury yields.

At 5 p.m., the U.S. currency stood at ¥152.35-35 , up from ¥151.00-01 at 5 p.m. Tuesday.

Dollar buying was prompted by a widening interest rate gap between Japan and the United States, as Treasury yields rose amid growing views that former U.S. President Donald Trump is more likely to win next month’s presidential election. Trump’s victory is expected to worsen the U.S. fiscal situation and increase inflationary pressures.

“There are moves to price in Trump’s presidential victory,” said an official at a major brokerage firm.
 
 

The International Monetary Fund on Tuesday slashed its 2024 growth forecast for Japan to 0.3 percent, down 0.4 percentage point from its estimate three months ago, citing negative developments such as temporary auto supply disruptions.

The latest estimate in the IMF's World Economic Outlook report is the lowest since 2020, when the Japanese economy contracted sharply in the wake of the COVID-19 pandemic.

The IMF said the Japanese economy has also been affected by the "fading of one-off factors," including a sharp rise in tourism that drove growth in 2023, in addition to the supply chain shortages that widened earlier this year following a safety scandal involving a Toyota Motor Corp. subsidiary.

Japan took a relatively big growth cut among major economies at a time when the country is in the midst of a general election campaign in which a major issue is how to prop up its weak economy.

However, the IMF said Japan's growth will accelerate to 1.1 percent in 2025, up 0.1 point from its July forecast, on the back of wage and consumption increases.

The IMF made almost no changes to its global growth outlook and projections for other major economies. It anticipated 3.2 percent worldwide economic expansion this year, unchanged from three months ago, and also 3.2 percent in 2025, down 0.1 point.

The quarterly report came out two weeks before the U.S. presidential election, with the Republican nominee, Donald Trump, promising to impose steep import tariffs, and as finance chiefs from around the world are now gathering for the biannual meetings of the IMF and the World Bank in Washington.

Shortly after the document was released, IMF chief economist Pierre-Olivier Gourinchas said at a press conference that "the battle against inflation is almost won," but warned that "risks are now tilted to the downside."

Gourinchas said such challenges include many countries favoring trade policies aimed at protecting workers and industries at home.

"These measures can sometimes boost investment and activity in the short run, but they often lead to retaliation and ultimately fail to deliver sustained improvements in standards of living," he said.

"They should be avoided when not carefully addressing well-identified market failures or narrowly defined national security concerns."

While the report said only minimal revisions have been made to the global forecast, a closer look reveals that the broadly flat trend is due to offsetting factors in developing economies.

Because of conflicts and civil unrest, the IMF said production cuts have been seen in regions such as the Middle East and sub-Saharan Africa, while emerging Asian countries have been growing steadily, thanks to surging demand for semiconductors and electronics.

Despite ongoing geopolitical tensions, the report said global trade volume as a share of world growth has not fallen markedly. But it noted that "signs of geoeconomic fragmentation have started to emerge, with increasingly more trade occurring within geopolitical blocs rather than between them."

For 2024, the U.S. growth forecast was revised upward by 0.2 point to 2.8 percent, backed by brisk consumer spending and capital investment. Growth was projected to slow to 2.2 percent in 2025, though the figure was 0.3 point higher than in the July forecast.

The IMF lowered this year's estimate for China to 4.8 percent, compared with the previous projection of 5.0 percent, amid continued weakness in consumer confidence and the real estate sector. The growth estimate for next year was unchanged at 4.5 percent.

The Washington-headquartered organization said growth in the euro area was also revised lower, with 0.8 percent likely, down 0.1 point, partly due to a slowdown in Germany's manufacturing sector. For 2025, it was projected to be at 1.2 percent, down 0.3 point.
 
 

Tokyo Metro Co. made an impressive debut on the Tokyo stock market on Wednesday, briefly surging 47.3 percent above the offering price of 1,200 yen ($7.9) in Japan's biggest initial public offering in six years.

The IPO put Tokyo Metro's market capitalization at around 1.01 trillion yen, making it the seventh largest railway operator in the country in terms of total market value as of Wednesday.

The share price of Asia's oldest subway operator closed at 1,739 yen after opening at 1,630 yen on the first day of trading on the Tokyo Stock Exchange's top-tier Prime Market.

Tokyo Metro, the country's second-largest railway company by passenger volume, drew massive buy orders primarily from individual investors seeking stability and dividends. It took around an hour to reach the initial price after the market opened at 9 a.m.

"We believe the listing serves as a foundation for further management reforms and allows us to enter a new stage," Tokyo Metro President Akiyoshi Yamamura said in a news conference after Wednesday's trading ended.

The subway operator raised 348.6 billion yen in the IPO, with the central government and the Tokyo government selling half of their respective holdings of 53.4 percent and 46.6 percent at 1,200 yen per share.

The central government will use its proceeds from the sale of Tokyo Metro shares to repay bonds issued to fund reconstruction efforts following the devastating earthquake and ensuing tsunami that struck northeastern Japan in March 2011.

Tokyo Metro was formed in 2004 from a public sector-backed entity as part of privatization efforts, though all of its shares had been held by the central and metropolitan governments.

Both the market cap and the value of the share offering are the highest in Japan since SoftBank Group Corp. in December 2018 listed its telecom unit, whose market value totaled 7.18 trillion yen, according to data provider Dealogic. SoftBank Group raised 2.65 trillion yen in Japan's biggest-ever IPO.

"Demand for Tokyo Metro's shares among individual investors appears to be robust due to its stable earnings and favorable dividend yield," said Shingo Ide, chief equity strategist at the NLI Research Institute.

The dividend per share is estimated at 40 yen for the business year ending in March 2025, setting the dividend yield at 3.3 percent based on the offering price.

In an attempt to attract more individual investors, Tokyo Metro will offer shareholder benefits, including free train tickets, depending on the number of stocks they hold.

However, Ide warned that the subway operator's stock may be sold after initial buying subsides, as the dividend yield has dropped below 3 percent as a result of the price gain.

Tokyo Metro operates nine subway lines connecting 180 stations across the capital and carried 1.9 billion passengers in the year ended March 2022, the second highest after East Japan Railway Co. Its operations also include real estate, retail and telecommunications businesses.

As the railway business accounted for around 90 percent of the company's sales in the business year ended in March, analysts have expressed doubts about its growth going forward.

"We do not expect significant growth potential for Tokyo Metro, as it is challenging to build new lines and boost earnings from its real estate business," Ide said.

Yamamura, however, stressed at the press conference the advantage of Tokyo Metro's railway segment focused on the center of the capital, where the population is expected to grow until 2035 and where development projects are active.

"We aim to grow the non-railway sector by facilitating synergy with the railway business," the president said.
 
 

Sales of used smartphones in Japan are expected to hit an all-time high in fiscal 2024, as rising prices of new devices drive consumers toward more affordable options, a Tokyo-based research company said.

Sales of used smartphones are projected to climb 15.5 percent from the previous year to 3.15 million units, marking a record high for the sixth consecutive year, also lifted by purchases by foreign visitors, MM Research Institute Ltd.

Sales are estimated to further expand in the coming years, possibly hitting 4.38 million units in fiscal 2028, on the back of elevated prices of new devices due to the yen's depreciation and higher material costs, the research firm said.

Although new smartphone models, including Apple Inc's latest iPhone released in September, have attracted attention, many consumers seem to find it difficult to loosen their purse strings, said Hideaki Yokota, vice president of MM Research.

"People are becoming more comfortable with secondhand products, as used smartphones can be utilized without inconvenience," Yokota said.

Visitors from China and other countries are also contributing to the increasing sales, snapping up used iPhones in good condition, the research company said.

Reflecting their popularity, the share of used smartphones in Japan's overall smartphone sales is expected to grow from 9.7 percent in fiscal 2023 to 10.8 percent this fiscal year.

Belong Inc, which specializes in used smartphone sales, said corporate demand is also on the rise, as digital devices are now used for inventory management in restaurants and for electronic medical records in the health care sector.

To support the secondhand smartphone market, an expert panel of the communication ministry proposed in September that telecom carriers should be basically banned from restricting the use of such devices because of previous owners' unpaid bills.


 

Three major Japanese automobile manufacturers, Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co., have reached an agreement to promote collaboration on developing in-car software, The Yomiuri Shimbun has learned. They will consider standardizing specifications for functions of car computers such as window opening and wiper movement.

Suzuki Motor Corp. will work with major chip manufacturers and communications enterprises to develop software for autonomous driving and map information within fiscal 2024.

Japanese companies are accelerating such collaboration to compete against leading U.S. and Chinese manufacturers in automotive technologies.

Executives of the automakers and officials of the Economy, Trade and Industry Ministry plan to explain the policy on Thursday at the Japan Mobility Show (formerly the Tokyo Motor Show) at the Makuhari Messe in Chiba City.

The three automakers will standardize the basic platform for an application programming interface (API), which serves as the link between the software and other systems, allowing a variety of software from the three automakers to be installed.

This makes it easier for other software firms to participate in development and is expected to strengthen Japan’s competitiveness.

The ministry urges the development of Software Defined Vehicles (SDVs), which are next-generation cars that can add new functions and enhance abilities by updating software via the internet.

In order to boost the development of SDVs, the ministry will launch what it calls the Mobility DX Platform with major automobile manufacturers. The software collaboration is one of the projects of this platform. Toyota, Honda and Nissan also eye cooperating in the self-driving technology field in the future.

The ministry also will strengthen the development of human resources. It will add SDVs to guidelines on the development of human resources in digital fields and nurture talented personnel who are well-versed in automotive software by providing courses. Collaborations with educational institutions such as universities will be promoted as well.

 

The United States and China have taken the lead in the SDV field. U.S. electric vehicle giant Tesla Inc. was the first company to launch SDVs, which enable the company to earn money even after selling the cars. China has boosted the development of leading-edge technologies by standardizing API in its automobile industry since 2021.

The Japanese government is intensifying its sense of urgency regarding this situation. It created a strategy on automotive digitalization in May.

Japan aims to secure a 30% share of the global SDV sales market, urging collaboration among domestic companies to achieve this goal.

For next-generation vehicles, such as SDVs, the superiority of software directly correlates with competitiveness, prompting a unified effort between the public and private sectors to regain ground.
 
 

The price of newly harvested rice has surged 48 percent from a year earlier to the highest level in 31 years, reflecting a shortage caused by extreme summer heat that reduced the previous season's harvest, the farm ministry's data showed Friday.

The average price of unpolished rice sold by the National Federation of Agricultural Cooperative Associations and other supplier bodies to wholesalers was 22,700 yen for 60 kilograms in September, the Ministry of Agriculture, Forestry and Fisheries reported.

In Japan, rice from each year's harvest begins appearing on store shelves around September.

This year's price is the highest since 1993 when it reached 23,607 yen, according to data from the National Rice Exchange and Price Formation Center, though the ministry's data only goes back to 2008.

The price surged last month also as rising production costs, driven by inflation, combined with booming inbound tourism that drove up rice consumption.

The sharp rise followed consumer stockpiling that began in August after the weather agency issued its first-ever advisory about the increased risk of a megaquake along the Nakai Trough.

 

 

Japanese inflation slowed in September with prices up 2.4 percent on-year, not including volatile fresh food, official data showed Friday.

The core Consumer Price Index eased from 2.8 percent in August as the pace of increase in electricity and gas prices relented, the internal affairs ministry said.

Despite the slowdown, the rate remained above the Bank of Japan's two percent target, set over a decade ago as part of efforts to boost the stagnant economy.

The target has been surpassed every month since April 2022, although the bank has questioned to what extent that is down to temporary factors such as the Ukraine war.

"The resumption of electricity subsidies resulted in a plunge in headline inflation in September," said Marcel Thieliant, head of Asia-Pacific at Capital Economics.

Thieliant predicted a further deceleration of core inflation in October, but noted that the subsidies "should be phased out completely by December, which should lift inflation".

The Bank of Japan raised interest rates in March for the first time since 2007 and again in July, in initial steps towards normalizing its ultra-loose monetary policies.

New Prime Minister Shigeru Ishiba said this month that the environment was not right for another interest rate increase.

After Ishiba took office in early October, perceptions that he favored hiking borrowing costs and the possibility that he could raise taxes triggered a surge in the yen and stock market volatility.

One dollar bought 150 yen on Friday morning after the Japanese currency weakened from levels around 149.35 the day before.

Excluding both fresh food and energy, Japanese prices rose 2.1 percent in September.

"We expect inflation excluding fresh food and energy to remain around two percent until early next year, when it should gradually fall below two percent," Thieliant said. "Accordingly, we still expect the Bank of Japan to press ahead with another interest rate hike before year-end."
 
 

Japan's Seven & i Holdings is betting it can boost value by hiving off underperforming businesses and focusing on mainstay 7-Eleven stores. The outcome of its strategy will determine whether it can outmaneuver a $47 billion Canadian takeover bid.

Much depends on the retailer's ability to roll out a new store format in Japan, and improve profit margins overseas, analysts and industry insiders say.

Seven & i plans to split off its supermarket operation and some 30 other "non-core" units into a holding company, York Holdings. It will rename itself 7-Eleven Corp to emphasise its new focus and aims to bring in strategic investors for York and eventually list it.

The shake-up shows Seven & i's determination to ditch the conglomerate discount that has weighed on its shares for years. Poor performance at the supermarket business hasn't helped either, making the Japanese company a ripe target for a takeover bid from Alimentation Couche-Tard Inc, which owns Circle-K.

The Canadian company announced a preliminary bid for Seven & in August, and sources said last week it has since hiked its offer by 22% to around $47 billion. If the deal goes ahead, it would be the largest ever overseas buyout of a Japanese firm.

Given the pressure from Couche-Tard, Seven & i made an "unavoidable decision," to split the business, said veteran independent analyst Akihito Nakai.

"It's the only thing they can do," he said.

Seven & i has said it is "confident" it can unlock shareholder value through a number of strategic actions and has laid out near-term growth targets, including an EBITDA earnings target of 100 billion yen ($670 million) in the next financial year for the York unit.

Still, it's unclear how long shareholders will be willing to wait. Shareholders Artisan Partners and ValueAct Capital have previously called for Seven & i to shed what they said was unnecessary bloat.

The Japanese giant employs some 157,000 people worldwide across a business that spans clothing stores, supermarkets and restaurants.

The change in portfolio strategy underscores Seven & i's "urgency to unlock shareholder value," Jefferies analyst Shunsuke Kuriyama said in a note.

In Japan, 7-Eleven stores have become a cultural touchstone, known for a ready supply of fresh food and everything from toothpaste to socks.

The Japanese stores are also highly profitable: the operating margin is 27%, far above the 3.5% of 7-Eleven stores outside of Japan.

Of 7-Eleven's 85,000 stores worldwide, some 21,000 are in Japan, most of them franchises. The Japanese convenience store market is also saturated: moreover, 7-Eleven faces stiff competition from rivals FamilyMart and Lawson.

Same store sales decreased slightly in the six months to September, compared to the previous year.

Reuters reported last month that some 7-Eleven owners are dissatisfied with the company's current strategy, citing concerns about competition from rivals, among other issues.


FAST ROLL-OUT

One area ripe for growth is mini-supermarkets, which are bigger than convenience stores and stock more fresh food.

Rival Aeon has rolled out more than 1,100 of its My Basket stores, focusing on urban areas where there is demand for the format from single and elderly shoppers. Aeon has said it wants to double the number of My Basket stores.
7-Eleven introduced a mini-supermarket of its own, "SIP", in February.

"The testing of the mini-supermarket SIP format is ongoing and will eventually lead to the creation of a second domestic growth division for the business," said analyst Michael Causton of consultancy JapanConsuming.

"Test results are promising and once all set, it will roll out fast," he said in a note on the Smartkarma investor research platform.

The focus on SIP stores shows that Seven & i will need to retain some kind of relationship with the supermarket business that will be spun off into York, said veteran analyst Nakai.

"If they completely separate themselves from the supermarkets, they will not be able to implement the new strategy," he said. "Regardless of capital ties, they need to continue a relationship of cooperation."


OVERSEAS BUSINESS

Fixing the bigger overseas 7-Eleven business may prove tougher.
Seven & i cut it full-year profit forecast by a quarter last week. That reflects "a more challenging environment with customers downgrading purchases", Morningstar analyst Lorraine Tan said in a note following the earnings.

Seven & i appears unable to cut costs fast enough to mitigate the pressure on its margins, she said, adding that cost cutting is central to plans to boost returns at the U.S. convenience store operations.

So far, the company has announced plans to close some 444 underperforming stores overseas. It is also beefing up fresh food offerings in the United States.

It is targeting a return on invested capital (ROIC), a measure of profitability, of 10% by the 2030 financial year from 6.5% last year.
The question now is whether it can deliver soon enough for investors, especially due to a perception that the firm is slow to respond to calls for change.

Turning overseas convenience stores into higher margin businesses like in Japan will take a lot of work, including on merchandising, locations and marketing, as well as logistics, said JapanConsuming's Causton.

"We might see some nice improvements in three years, but five years is the minimum buy-in for the real gains to start showing through," he said.
 

 

Key Points

• Tokyo Metro’s initial public offering could drive momentum in the Japanese market and attract more companies into the country, analysts said, as China continues to lose steam.
• In Japan’s biggest IPO in six years, Tokyo Metro raised 348.6 billion yen ($2.3 billion) after pricing its shares at 1,200 yen apiece, according to the company’s regulatory filing on Tuesday.
• Ringo Choi, EY’s Asia-Pacific IPO leader, said the success of Tokyo Metro “will attract more companies” to consider the Japanese market as an IPO destination.

 
 
Tokyo Metro’s initial public offering could drive momentum in the Japanese market and attract more companies into the country, analysts said, as China continues to lose steam.

In Japan’s biggest IPO in six years, Tokyo Metro raised 348.6 billion yen ($2.3 billion) after pricing its shares at 1,200 yen apiece, according to the company’s regulatory filing on Tuesday.

Reuters had reported, citing two sources familiar with the matter, that the IPO was more than 15 times oversubscribed. The stock is expected to be listed on the Tokyo Stock Exchange on Oct. 23.

“Everybody knows it, and it’s been priced relatively cheaply,” Mio Kato, founder of LightStream Research, told CNBC’s “Street Signs Asia” on Tuesday. “I think both the Tokyo government as well as the Ministry of Finance, obviously, won’t want the IPO to fail.”

“It’s quite a big banner IPO for the year, and it’s just something that everybody, you know, the entire public, is going to be focused on coming so close to the election,” Kato added. “We think they’re offering very, very good value.”

A recent report published by Dealogic, a financial markets platform, shows that in September, equity capital market issuance in Asia-Pacific was worth just $168 billion, 15% below the first nine months of 2023 and 27% down from the same period in 2022.

The decline in overall Asia-Pacific issuance coincided with a slowdown in China, according to the report. However, India and Japan made up for a lack of issuance in China, it added.

Kato said he thinks the positive trend will continue for Japan, suggesting the country will soon bounce back from years of subdued IPO activity.

“I saw some news about NASDAQ actually trying to attract more Japanese IPOs. Since, you know, the Chinese IPO market has been kind of quiet lately,” he said.

Hyundai India also started taking orders for its $3.3 billion IPO in Mumbai this week, in a deal set to become the country’s biggest listing.

Ringo Choi, EY’s Asia-Pacific IPO leader, told CNBC’s “Squawk Box Asia” on Tuesday that both Hyundai India and Tokyo Metro are in “very hot positions” and “with high liquidity.”

Choi predicted that those two IPOs will be bellwethers for their respective markets.

When asked if he thinks Tokyo Metro and Hyundai India’s listings will open the floodgates for more activity, he said, “I do.”

“I do think that after these two IPOs, and if the return of the IPOs [are] reasonably good, it will attract more companies to consider these two markets as the IPO destination,” Choi said.
 
 

Uniqlo's parent company Fast Retailing on Thursday announced "a record high performance in fiscal 2024" with domestic profits in Japan boosted by hot summer weather and a tourism boom.

The company also reported "significant increases in both revenue and profit" for international stores of casualwear giant Uniqlo.

Fast Retailing -- the world's third biggest clothing manufacturer and retailer after Zara owner Inditex and Sweden's H&M -- reported a 25 percent on-year jump in net profit to 371.9 billion yen.

The firm's earnings have hit new records for several years running since the COVID-19 pandemic eased as it pursues an aggressive international expansion strategy.

Warm weather over the winter squeezed sales slightly for Uniqlo stores in Japan, famous for their down jackets.

"However, same-store sales subsequently increased by 11.7 percent year-on-year in the second half from 1 March through 31 August 2024 thanks to consistently high temperatures," the company said in a statement.

Japan's summer this year was its joint warmest on record, and climate scientists predict that 2024 will be the hottest ever for the Earth because of a warming planet.

Domestic Uniqlo stores maintained a "strategic inventory of core summer ranges through the end of the summer season" and enhanced its marketing initiatives, Fast Retailing said.

Japan is also welcoming a record influx of tourists and is expected to have a total 35 million overseas visitors in 2024.

"Buoyant demand from overseas visitors also contributed to the increase in Uniqlo Japan revenue as Uniqlo brand recognition continues to rise worldwide," Fast Retailing said.

For Uniqlo overseas, operating profit margins "improved significantly in both North America and Europe".

Sales in mainland China and Hong Kong were strong in the first half of the business year but more sluggish in the second half, it added.

The company put this down to "a slowdown in consumer appetite, unseasonal weather, and product lineups that did not fully satisfy the needs of local customers".

Fast Retailing also operates the budget GU clothing brand, which reported a jump in revenue and profit for the financial year.
 
 

Seven & i Holdings (3382.T), opens new tab announced on Thursday a roadmap to hive off underperforming businesses and focus on its convenience store operations, as the retailer aims to fend off a $47-billion takeover bid from Canada's Alimentation Couche-Tard (ATD.TO)
, opens new tab.

The Japanese operator of 7-Eleven stores is facing pressure to convince investors it can enhance value after having rejected ACT's first bid in August, which it said undervalued the company and its growth potential.

Seven & i said on Thursday it will bundle some of its vast network of non-core assets into a holding company for which it will bring in strategic investors. The parent company also plans to rename itself '7-Eleven Corp' to emphasise the focus on its profitable convenience stores.

The new holding company, to be called York Holdings, is set to house 31 subsidiaries, including the group's superstores business, general goods store Loft, baby goods store Akachan Honpo and the operating company of Denny's restaurants in Japan.

Seven & i aims for the new company to become an equity method affiliate by February 2026, with an initial public offering planned for some time thereafter.

Despite divestments of some non-core holdings, such as department store unit Sogo & Seibu last year, Seven & i's operations remain expansive.
Foreign investors such as U.S.-based Artisan Partners have called on the group to shed what they see as unnecessary bloat.

"They are making a clear delineation between core and non-core businesses and that's a good thing," said Travis Lundy of Quiddity Advisors, who publishes on Smartkarma.

But it remains to be seen whether Seven & i's latest moves will satisfy critics calling for the sale of underperforming assets.

"Going forward each business will follow its own growth story," Seven & I CEO Ryuichi Isaka told a briefing, but added that Seven & i would retain a minority stake in York Holdings to continue to collaborate on food product development.

ACT has upped the ante with a revised offer that values Seven & i about 22% above its August initial bid, two sources said on Wednesday.

On Thursday Seven & i gave no additional details on ACT's revised bid but Isaka said the growth and capital efficiency plans unveiled would create more value than what was proposed by ACT.

ACT declined to comment on Thursday's announcements.
Seven & i also revised down its earnings forecast on Thursday, predicting a drop in operating profit for the fiscal year ending February 2025 to 403 billion yen ($2.7 billion) from 545 billion.

The drop is driven by a 24.6% fall in forecast profit from its convenience store business in North America as inflation weighs on consumer spending.
Seven & i’s overseas convenience store business accounts for more than 75% of its consolidated revenue.

($1=149.1700 yen)
 
 

Competition among South Korean and Japanese cosmetic manufacturers is intensifying over so-called “petit price” cosmetics that are inexpensive and high-quality.

With South Korean companies increasing their presence in the Japanese market through social media, and petit price products attracting more attention than before, Japanese firms are trying to regain lost ground.

In July, Kao Corp. opened the flagship store for its makeup brand Kate, which has a young target demographic, at the new commercial complex Shibuya Sakura Stage in Shibuya Ward, Tokyo.

Beauty advisors at the flagship store serve customers and an artificial intelligence diagnosis service that recommends products suited to each customer is also popular.

“It’s uncommon to be able to receive a makeup consultation for petit price products,” said a 20-year-old vocational school student said. “It’s fun,” she added.

Kate has drawn attention for its long-lasting “Lip Monster” lipstick series, and its core products are under ¥2,000 and sold mainly at drugstores.
“It is of major significance that we have a base in Shibuya, where many young people gather, to increase brand popularity,” a Kao official in charge of the store said.

South Korean cosmetics, mainly from inexpensive brands, have become more popular in the Japanese cosmetics market. France had been the top exporter of cosmetics to Japan for many years, but was overtaken by South Korea in 2022, according to the Cosmetic Importers Association of Japan.

According to research company Intage Inc., one in three people in their 10s and 20s have bought from at least one South Korean cosmetics brand.

Many inexpensive South Korean cosmetics brands come and go quickly, finding it difficult to establish their positions in Japan. What these brands have in common is the effort they put into advertising on social media with K-pop idols who are popular in Japan.

Cushion foundations, which are marketed as being quick to apply and long-lasting, first became popular with South Korean products and Japanese manufacturers are trying to catch up with them.

According to a senior official at a leading Japanese cosmetics manufacturer, the popularity of these cosmetics was created by South Korean social media, where word of mouth from consumers spread about the products’ low price and good quality.


Reviewing strategies

The size of the domestic market for inexpensive cosmetics in 2023 increased by 7.7% year on year to ¥709.9 billion, according to Fuji Keizai Group Co. This accounts for nearly one-fourth of total cosmetics sales in Japan.

The market is expected to further grow in the future. While Japanese manufacturers have focused on high-end cosmetics with a high profit margin, mainly targeting foreign tourists in Japan, they are now being forced to review their strategies.

Kose Corp.’s Visee brand released a short commercial on social media featuring a male actor popular among young people, with the aim of having it go viral.

Tokiwa Pharmaceutical Co.’s cosmetics brand Excel launched a member-exclusive website that lets users interact and ask about things such as makeup assistance. The company aims to increase the number of fans of its products through the website.

“Companies now need to not only enhance the functions and quality of their products, but also be creative in conveying that to consumers,” said Keiko Yashio, professor of marketing at Toyo Gakuen University.
 

 

Six months have passed since the introduction in April of new overtime restrictions for truck drivers. Despite much concern about the “2024 problem,” which refers to the serious shortage of truck drivers in the logistics industry, there have been few notable cases in which goods could not be transported.

However, maintaining logistics networks continues to be difficult. Small- and middle-sized companies are increasingly struggling to secure enough drivers, and cargo owners are being affected by a surge in labor costs. A growing number of transport companies have gone bankrupt due to driver shortages.


Active headhunting

“We’re facing a serious shortage of workers as fewer and fewer people want to become truck drivers,” sighed Atsushi Setoguchi, the president of Hokushow Corporation Inc. Based in Kita Ward, Tokyo, the company delivers such items as goods purchased from online grocery stores and home appliances. It operates about 150 trucks a day on weekdays.

Now, however, Hokushow has to comply with the new overtime restrictions, even amid the strong demand for deliveries this summer. Many consumers stocked up on food and daily necessities for such reasons as oncoming typhoons and the scarcity of rice.

At the same time, more and more truck drivers are being headhunted by other logistics companies because of labor shortages, so Hokushow is having a hard time securing enough staff.

Aiming to offer their employees better terms, the company is negotiating with cargo owners to increase freight charges.

However, cargo owners are also in a tough position.
According to an agricultural cooperative in Nagano Prefecture, their negotiations over rates with a company that transports agricultural products are running into problems in some regions.

According to the cooperative, the freight charges change several percent every year, but this year the transport company demanded a 40% increase.

“We understand the hard situation faced by the transport company, but we also hope they’ll understand the producers’ situation. It’s hard for us to pass the cost increase on to our customers,” an official at the cooperative said.

A fishermen’s cooperative in Hokkaido said the departure time had changed for trucks that transport marine products landed at a port. “The change made it impossible for us to ship some fish fresh, including Pacific saury. So, we have no choice but to freeze those fish, which reduces their price,” an official at the fishermen’s cooperative said.

However, there does not seem to have been serious disruptions in the transport of goods nationwide.

“We haven’t heard about particular turmoil in the logistics industry,” Land, Infrastructure, Transport and Tourism Minister Tetsuo Saito said at a press conference in September,
This is believed to be partly due to joint transportation efforts among companies, as well as shifts to ship and rail transport.

Overtime used up

An upper limit of 960 hours per year was imposed on truck drivers’ overtime in April, but some drivers had already worked many hours of overtime to transport cargo.

“We’re worried about having used up the permitted overtime hours,” an official related to the logistics industry said. There are concerns about potential driver shortages around the end of the year.

Given this situation, the transport ministry has launched a survey concerning the working hours of truck drivers.

According to an estimate by Nomura Research Institute, Ltd., the volume of all domestic cargo that can be delivered will decline by 35% in 2030 from 2015. The transport ministry aims to construct dedicated lanes for self-driving cargo vehicles using highway median strips and other places.

However, these efforts will take a long time to bear fruit, and labor shortages in the logistics industry are expected to continue for a while.


39% go under

A growing number of logistics companies are going under. According to Teikoku Databank Ltd., 186 road transport companies went bankrupt from January to June this year, up 39.8% from the same period in 2023.

This is the second largest figure since the first half of 2009, when 218 companies went bankrupt due to the impact of the Lehman Brothers collapse.

A surge in fuel prices and labor shortages are two of the main factors behind companies shutting down. In addition to higher prices for light oil used for transportation, truck drivers are in short supply due to the limits on overtime.

To deal with the cost increase and raise wages to secure sufficient workers, logistics companies have to increase freight charges.
 

 

Japan's top currency diplomat on Monday issued a warning against speculative moves on the foreign exchange market as the yen fell below 149 per dollar.

"We will monitor currency market moves including speculative trading with a sense of urgency," Atsushi Mimura told reporters, reviving a verbal warning tactic that his predecessor, Masato Kanda, frequently used.

Mimura declined to comment on the specifics of the current market situation.

Separately, Katsunobu Kato, the nation's newly appointed finance minister, said the government would monitor how rapid currency moves could potentially impact the economy and would take action if necessary.

"The government will consider what action should be taken while monitoring the impacts," Kato said in an interview with a small group of reporters on Monday.

The yen depreciated to 149.10 versus the dollar in early trading on Monday, the weakest since Aug. 16, after a surprisingly strong U.S. jobs report for September led traders to cut bets that the Federal Reserve will make further large interest rate cuts.

Japan last conducted yen-buying intervention in late July to support its currency after it tumbled to a 38-year low below 161 per dollar.

The yen has also been under pressure since new Japanese premier Shigeru Ishiba stunned markets when he said the economy was not ready for further rate hikes, an apparent about-face from his previous support for the Bank of Japan's unwinding decades of loose monetary policy.

In Monday's interview, Kato said the government would leave specific policy steps to the Bank of Japan (BOJ), when asked whether the policy rate should be maintained at 0.25%.

"The government hopes that the BOJ will communicate with markets thoroughly and take appropriate policy to achieve its 2% inflation target in a stable and sustainable manner," he said.

The BOJ in March delivered its first rate hike in 17 years, arguing the pace of price and wage increases showed Japan was finally shaking its entrenched deflationary mindset. The central bank unexpectedly increased rates again in July, triggering a shakeout in domestic markets.
 
 

The high-tech corridor will use unmanned transport boxes to streamline logistics, with trials planned by 2027.

Japan is developing a high-tech “conveyor belt road” between Tokyo and Osaka to tackle its truck driver shortage and meet rising delivery demands.

This automated three-lane corridor, dubbed the “auto flow road,” will feature large, wheeled transport boxes moving continuously along a highway.

A trial is scheduled for 2027 or early 2028, with full operations expected by the mid-2030s, reports The Independent.

Yuri Endo, a senior official at Japan's Ministry of Land, Infrastructure, Transport and Tourism, highlights the system's aim to ease driver workloads, reduce emissions, and boost efficiency.

The "auto flow road" concept dedicates road space for 24-hour, unmanned logistics transport, with automated loading integrated with ports, airports, and rail systems.

Although human drivers may still handle last-mile deliveries, future technology could enable fully driverless delivery.

The project aligns with efforts to address the “2024 problem,” Japan's looming logistics crisis caused by driver shortages and new overtime restrictions.

Japan’s trucking industry, responsible for 91% of domestic freight, faces a projected 34% drop in capacity by 2030. Meanwhile, online shopping demand has surged, with delivery service users rising from 40% to over 60% of households since the pandemic.

A government-released computer graphic video last month depicts large, palletized containers—each able to carry up to a ton of produce—moving three abreast along an “auto flow road” positioned in the center of a motorway, with vehicles traveling in opposite directions on either side.

Safety remains a priority, with delivery truck fatalities decreasing but still a concern. To alleviate pressure, industry experts and the Japan Trucking Association suggest consumers bundle orders and businesses reconsider free delivery offers.
 
 

 
There’s a lot of joy to be found in just randomly browsing through a Japanese convenience store, where the high-quality and uniqueness of the ever-changing lineup of food and drinks means there’s always a tasty surprise or two waiting for you.

And as you round one aisle of shelves, you might have yet another surprise when you see tables or a counter with chairs. For example, here’s one inside a branch of FamilyMart, one of Japan’s largest convenience store chains.

Called eat-in corners or eat-in spaces, they’re a testament to the high quality of Japanese convenience store offerings, showing that the food and drink is good enough to warrant sitting down and enjoying like you’re at a mini cafe. However, the eat-in space’s days are now numbered at FamilyMart, who says they’re planning to get rid of them at branches nationwide.

FamilyMart made a big push to add eat-in spaces to its shops in 2017, and currently you can find them in about 7,000 branches. However, FamilyMart has announced that it will be converting the eat-in areas to sales floor space as part of its efforts to “meet diversifying customer needs.”

Now, as a retail business, when FamilyMart says it wants to more effectively “meet customer needs,” that effectively means they want to increase sales, and in turn profits.

According to FamilyMart, the company has observed reduced usage of its eat-in spaces since the coronavirus pandemic, and feels that their floor space could be better used for stocking items from its clothing line, which it’s seeing expanding demand for, as well as non-food-and-drink daily essentials such as toilet paper and detergent.

▼ A before/after concept image from FamilyMart

 

Something FamilyMart doesn’t mention in its announcement, but which may be playing a part in lower usage of its stores’ eat-in spaces, is the way convenience store purchases are taxed. When you buy food or drinks at a FamilyMart with an eat-in space, the clerk will often ask if you’re purchasing it to eat there or to take home.

This isn’t because FamilyMart is so fancy as to provide table service for its eat-in customers, though. It’s because sales tax in Japan for groceries and take-out food and drink items is 8 percent, but sales tax for food and drink consumed in a restaurant is 10 percent.

In the eyes of the law, convenience store eat-in corners count as “restaurants” and carry the higher tax rate, the cost of which convenience stores pass on to their customers.

In other words, if you’re buying something at FamilyMart, it’s more expensive if you eat or drink it in-store, and less expensive if you instead have it back at your home or office, in the park, or even in the parking lot.

This wasn’t always the case, though. Both eat-in and take-out items were taxed at an identical 8 percent until October of 2019, and so reduced use of FamilyMart’s eat-in spaces might not be so much a case of people having gotten used to not eating in-store during the pandemic as it is a case of customers saying “Yeah, I’d rather pay the cheaper of the two prices,” especially as consumer prices continue to rise and outpace income growth in Japan.

FamilyMart says that some stores might retain their eat-in spaces, but the push to convert them to sales spaces will be taking place across the entire chain, with 2,000 eat-in spaces to disappear by the end of this year.
 
 

Toyota is investing another $500 million in Joby Aviation as part of a partnership aimed at helping get the American air taxi company's commercial business off the ground.

Toyota's investment will be used to support certification and production of Joby's electric air taxi, the companies said Wednesday, and brings Toyota Motor Corporation’s total investment in Joby to $894 million.

After the investment, which will come in two equal tranches later this year and next, Toyota will own about 22% of Joby's outstanding shares.

“Today’s investment builds on nearly seven years of collaboration between our companies,” said JoeBen Bevirt, founder and CEO, Joby Aviation.

“The knowledge and support shared by Toyota has been instrumental in Joby’s success and we look forward to deepening our relationship as we deliver on our shared vision for the future of air travel.”

Joby said it recently rolled its third aircraft off the production line and said in August that the fourth of five certifications was in progress.

In addition to the cash investment, Toyota has been spending time and human resources to share its design and manufacturing methods.

The Japanese automaker said its engineers are working with Joby's team at its California headquarters.

Last year, the companies signed a long-term agreement for Toyota to supply key powertrain and other components for the production of Joby’s aircraft.
 
 

East Japan Railway Co. is considering the development of a dedicated Shinkansen car that will have no seats and carry only freight, The Yomiuri Shimbun has learned.

Although JR companies have been integrating passenger and freight transport, carrying freight in part of a train car or on empty seats, this would be the first time for Shinkansen trains to have cargo-only cars.

JR East is considering removing all the seats from dedicated freight cars to allow them to carry more and larger pieces of cargo. The system might involve only the first car of a train, so that passengers do not pass through it.

Other ideas include enlarging the doors of a freight car to make loading and unloading more efficient, or having entire trains dedicated to cargo.

JR companies began using Shinkansen trains to transport freight as part of their initiatives to combine passenger and cargo transport during the COVID-19 pandemic, when the number of passengers plummeted.

JR East has been operating the service on a full scale since 2021 on the Tohoku Shinkansen and other lines, transporting goods such as fresh fish and souvenirs. It intends to commercialize the high-speed, high-volume transportation of freight in fiscal 2025, and is now conducting trials.

However, since the number of passenger seats would decrease with the introduction of freight-only cars, the company is still considering whether to introduce such a service and on what scale, while keeping an eye on the demand for both passengers and freight.

A shortage of labor is increasingly being felt in the logistics industry, due to stricter regulations on truck drivers’ working hours from April of this year. Hopes are rising for Shinkansen-based transport.
 
 

Tokaido Shinkansen commemorated 60 years of service at JR Tokyo Station on Tuesday.

The line has carried about 7 billion passengers to date. It embarked on a new start with a ribbon-cutting ceremony attended by many railway fans and others.

Nozomi No. 1, the first Shinkansen train of the day, sounded its horn and departed at 6 a.m. from platform No. 19, the same platform that saw off the first Shinkansen train 60 years ago.

“We will work hard to make the Tokaido Shinkansen line even more loved as we move toward the future,” said Shunsuke Niwa, president of Central Japan Railway Co. (JR Tokai).

“It’s really cool and amazing that the Shinkansen still runs at high speeds and carries so many people,” said a fifth-grade elementary school student who came to the ceremony from Mitaka, Tokyo, with his father.
 
 

Asian shares were mixed on Tuesday, with Japan’s Nikkei 225 index regaining some of its sharp losses from a day earlier.

A quarterly “tankan” survey by the Bank of Japan showed business confidence among large manufacturers remained steady at 13, indicating an improved outlook for business conditions.

A positive number indicates that more companies maintain an optimistic outlook on business conditions than those who feel pessimistic.

The survey is closely monitored for clues about the impact of the Bank of Japan’s interest rate decisions, especially after the central bank ended negative rates in March and raised its short-term rate to 0.25% in July.

Japan also reported that its unemployment rate for August fell to 2.5% from 2.7% in July, in line with market expectations.

Japan’s benchmark Nikkei 225 rallied 1.9% to close at 38,651.97 as the yen weakened. The dollar was trading at 144.44 yen, up from 143.62 yen.

On Monday, the Nikkei tumbled nearly 5% as markets reacted to the selection of Shigeru Ishiba to be Japan's next prime minister. Ishiba was due to take office Tuesday following the resignation of Prime Minister Fumio Kishida.

Ishiba, an expert on defense and on domestic economic issues, was seen as a less favorable choice than some of his rivals in the ruling Liberal Democratic Party, partly because he has voiced support for raising interest rates.

That caused the Japanese yen to briefly jump in value against the dollar, which would hurt profits of large export manufacturers.

Australia’s S&P/ASX 200 dipped 0.9% to 8,195.90 after the data showed that retail sales in August rose 3.1% from the same period last year, which is above expectation.

Markets in China and South Korea were shut for holidays. Mainland Chinese markets, which had their best day since 2008 on Monday, will remain closed until Oct. 7 for the National Day break.

On Monday, the S&P 500 climbed 0.4% to reached an all-time high at 5,762.48 and clinched its fifth straight winning month and fourth straight winning quarter. The Dow Jones Industrial Average added less than 0.1% to 42,330.15. The Nasdaq composite rose 0.4% to 18,189.17.

Wall Street has catapulted to records on hopes the slowing U.S. economy can keep growing while the Federal Reserve cuts interest rates to offer it more juice. A big test will arrive Friday, when the U.S. government offers its latest monthly update on the job market.

An overriding worry on Wall Street is whether the economy may already be heading for a recession. Even though the Fed cut rates earlier this month and has indicated more relief is on the way, U.S. employers have already begun paring back on their hiring. Before this month, the Fed had kept interest rates at a two-decade high in hopes of slowing the economy enough to stamp out high inflation.

In the bond market, U.S. Treasury yields rose after investors took comments from Fed Chair Jerome Powell as a hint that coming cuts to interest rates may be more traditional sized.

The Fed began its rate cuts with a larger-than-usual reduction of half a percentage point, and many traders expect the next meeting in November could yield a similar sized reduction. Fed policy makers already had indicated they were planning two more cuts this year of the traditional size of a quarter of a percentage point.

But Powell said again on Monday that rate cuts are not something the Fed needs to work quickly on. After his comments, traders were betting on just a 35% probability the Fed will cut rates by another half a percentage point in November. That’s down from a 53% chance seen the day before, according to data from CME Group.

The yield on the 10-year Treasury rose to 3.78% from 3.75% late Friday.
In other dealings Tuesday, benchmark U.S. crude oil added 12 cents to $68.29 per barrel. Brent crude, the international standard, rose 11 cents at $71.81 per barrel.

The euro was trading at $1.1138, up from $1.1134.
 
 

Video games are a cyclical hobby. When Nintendo released the Famicom/NES, it was the hottest hardware with the best lineup of games the industry had ever seen. After enough time passed, though, that enthusiasm got transferred over to its successor system, the Super Famicom/SNES, only for it to lose its luster too as later-generation consoles debuted.

But in time, people began to see the appeal of the NES and SNES libraries again, with both those who’d grown up with the systems craving another go at their pure, straightforward gameplay and charming hand-drawn graphics as well as younger gamers intrigued by the legendary titles that laid so much of the foundation of modern game design.

So Nintendo brought out both the Nintendo Classic Mini Family Computer/NES Classic Edition and Nintendo Classic Mini Super Famicom/Super NES Classic Edition, scaled-down plug-and-play retro reproductions pre-loaded with a selection of each system’s greatest hits.

But now their official lifespans are coming to a close too.

 

Nintendo’s official Japanese website has posted that the periods for which it is legally required to maintain a stock of repair parts for both the Nintendo Classic Mini Family Computer and Mini Super Famicom have now both passed, and so it will be ceasing production of the components.

In other words, once the current stock is used up, Nintendo will no longer be offering repairs for either of the retro systems, and depending on the specific parts required for a particular repair job, some problems may become non-addressable sooner than others.

The Nintendo Classic Mini Family Computer went on sale in November of 2016, and the Mini Super Famicom in October of 2017, so it’s unlikely anyone is going to be buying a brand-new model that’s defective from the factory right out of the box.

However, eight years is enough time for controller wear and tear, or unfortunate accidents to occur such as the system getting a drink spilled on it or being knocked off a table.

With Nintendo of America having discontinued repair service for the NES and Super NES Classics back in January of 2022, owners of the Japanese versions have actually enjoyed a much longer safety net.

Still, this being the end of the line for the Mini Famicom and Super Famicom is significant, especially because so few of the games included with the systems are available for purchase, are instead are only playable as part of a subscription to Nintendo’s paid Switch Online service, which launched after both mini consoles went on sale.

That means we’re unlikely to see Nintendo offer an alternative way to own these games outright, so if you’ve got a Mini Famicom of Super Famicom that needs fixing, now is the time to get it done.
 
 

Japanese consumers face price hikes in October on around 2,900 food and drink items, the most for a month so far this year, mainly due to a continued increase in raw material costs, a credit research company said Monday.

The 2,911 hikes reflect a growing number of firms passing on higher raw material costs to consumers and surpass the price hikes on 2,897 items in April, Teikoku Databank Ltd. said in its report.

The company also cited rising logistic and labor costs and the weaker yen, which pushes up import prices, as behind the expected price hikes.

Alcoholic beverages and other drinks account for nearly half of the hikes, at 1,362 items. Processed foods such as sausages and ham account for 673 items and seasoning and condiments 301.

Teikoku Databank anticipates price increases on a total of 12,401 food items for the whole of 2024. The figure is significantly lower than the 32,396 items raised in 2023.

A Teikoku Databank official said that while 2025 is likely to see an ease in price hikes caused by a weak yen, firms are expected to continue to pass on the rising labor costs to consumers.

The survey compiled pricing data from 105 listed and 90 non-listed companies in the food and beverage industry.
 

 

Part of the appeal of Japan’s mega-popular Umaibo corn puff snacks is how manufacturer Yaokin is constantly adding new flavors to the lineup, like Teriyaki Hamburger or Cup Noodle.

But at the same time, there’s a remarkable consistency to Umaibo, not just in keeping long-time favorite flavors such as cheese or corn potage, but in price.

When Umaibo first went on sale in 1979, it cost just 10 yen. A decade later, Umaibo still cost 10 yen, and 20 years after it hit the market, yep, it was still only 10 yen. 

Umaibo held on to its 10-yen price point all the way until 2022 (when the exchange rate made 10 yen the equivalent of about 8 U.S. cents) before Yaokin announced the product’s first-ever price increase, to 12 yen.

Umaibo’s 12-yen era won’t match the longevity of its 43 years at 10 yen, though, as Yaokin has announced that it’s once again raising the price, posting a solemn statement to the company’s official website and the official Umaibo Twitter account.

"As of October 1, we will be revising the price of our snack product Umaibo. We revised the Umaibo price for the first time in 2022, and we deeply appreciate the kind words and reactions from our customers at that time.

In pricing Umaibo, we have always taken into consideration [the goal of] allowing even children to experience of joy of choosing what to buy using their allowance.

However, even after 2022, the price of Umaibo’s ingredients in general, including key components such as corn and vegetable oil, have continued to rise, and labor, packaging, shipping, and other costs have also increased significantly.

The situation has progressed beyond even what our company can allow for, and so to ensure a continued, stable supply of Umaibo, it is with deep apologies that, for shipments from the beginning of October, we will be implementing a price increase.

We ask for your understanding as we continue to work hard to provide a stable supply of Umaibo and overflowing amounts of deliciousness and fun."
Starting October 1 Umaibo will cost 15 yen, 3 more than they do right now.

Though this represents the largest price increase in the 45-year history of the brand, it’s not exactly throwing any adult fans’ budgets that much out of whack, and online reactions have been overwhelmingly understanding and appreciative of Yaokin’s honesty, with comments such as:

“Well, this is better than keeping the same price while making the snacks smaller.”

“Can’t be helped.”

“More than anything, I appreciate them keeping the price so low for so long.”

“I think they’re wonderful for working so hard to keep the price in the 10-19-yen range!”

“Considering how much more other companies are raising prices for their things, Yaokin must be working really hard.”

“I’d totally still buy just as many as I do now even if they cost 20 yen.”
“If they had extra-large Umaibo that cost 30 yen, I’d buy ‘em.”

“It looks like when Umaibo or Garigari-kun raise their prices, they explain why, so no one has much room to get bent out of shape. Other companies raise their prices or reduce their sizes without saying why, or say it’s ‘because of customer feedback,’ and that’s when people get angry at them.”

Still, when a big part of Umaibo’s brand image is that it’s so inexpensive that essentially anyone with any money of their own can buy it on impulse without worrying about the cost, any price increase carries a certain amount of risk, and while Umaibo is still one of the cheapest snacks around, it’s now 50-percent more expensive than it was just three years ago.

It’s worth noting that while an extra three yen is a cost that adult Umaibo buyers can soak up without any financial stress, kids have always been a key part of the Umaibo market, in part due to the fact that Umaibo is cheaper than just about any other sweet or salty snack available at convenience stores and candy shops.

That low price helps turn kids into Umaibo fans from an early age, but if Umaibo ever rises in price to a point where there are other snacks available for about the same price, it’s going to suddenly have a lot more competition for kids’ pocket change.

That sort of tipping point, though, is probably still quite a ways off from just 15 yen, though, so odds are Umaibo’s current customer base will remain intact at its new price.
 

 

Telecommunications and investment company SoftBank Group Corp. and nine affiliated firms paid digital salaries to their employees on Wednesday, the first such initiative in Japan.

Employees asking that part of their salaries be paid to their accounts under cashless payment services received their pay through smartphone payment platform PayPay, which is operated by PayPay Corp., a SoftBank Group affiliate.

The maximum amount of money that can be received under the program is set at ¥200,000. SoftBank Group hopes to create an environment in which other companies can also offer digital salaries to their employees.
 

 

Citigroup Inc. appointed Tokiya Kishie as head of its markets business in Japan, tapping the structured products veteran to fill the key role as trading soars in the Asian economy. 

Kishie’s appointment will take effect Oct. 1, subject to local approvals, according to an internal memo seen by Bloomberg News and confirmed by a spokesperson. He fills the position left vacant this year by Robert Nakamura, who has become the Wall Street lender’s Japan country officer.
 
The US bank has been pushing to grow in Tokyo, extending its yen rates business to local lenders while targeting a top-five ranking for transactions across mergers and stock and debt underwriting. Citigroup’s securities subsidiary in Japan boosted revenue last year in stock and bond trading even though its profit slipped 23%, according to filings.  

With nearly two decades of international financial experience, Kishie will drive business growth and lead the markets franchise in Japan, according to the memo. He will report to Paul Smith, head of markets for Japan, Asia North and Australia, as well as Nakamura.

Kishie joined Citigroup in 2010 following a stint at Nomura Holdings Inc. and the now-defunct Lehman Brothers Holdings Inc., and has since spent most of his career leading the structuring business in Japan. He’s currently doubling as head of fixed-income structuring and head of rates structuring sales in the country. 
 

 

Japan’s financial watchdog recommended Wednesday a ¥21.76 million fine for Nomura Securities Co. for allegedly manipulating the government bond futures market.

The Securities and Exchange Surveillance Commission made the recommendation to the Financial Services Agency, suspecting that the nation’s largest securities firm violated the Financial Instruments and Exchange Law.

According to the commission, a manager in the Global Markets division, which trades with the company’s funds, was suspected of fraudulently causing prices to fluctuate in 2021 to make a profit by placing large orders for long-term government bond futures trading without intending to buy or sell, and then canceling them.
 


 

China’s wine exports to Japan soared by 255% in 2023, according to recent trade data from Japan’s Ministry of Finance. The value of these imports also jumped by 189%, signaling growing acceptance of Chinese wines in the Japanese market.

Over the past two years, several Chinese wineries have expanded their presence in international markets, initially targeting regions with large Chinese populations like Hong Kong, Macau, and Singapore. Now, Japan has emerged as a key market for Chinese wine, posting significant growth.

Based on official data obtained by Vino Joy News, the upward trend continued this year. From January to August this year, the volume of bottled Chinese wine (in containers of 2 liters or less) exported to Japan reached 37,296 liters, up 117.84% from the same period in 2023.

The export value grew by 22.16% year-on-year to US$343,900. Japan now ranks as the fifth-largest market for Chinese wine exports, following Hong Kong, France, Macau, and Australia.

Forbes Japan also spotlighted Silver Heights, the first Chinese winery to receive biodynamic certification from Demeter. Speaking to Vino Joy News, the winery’s CEO, Marco Milani, revealed that Silver Heights has been exporting to Japan for five years via its local partner Kota Kudo, owner of Koalaya, primarily selling to luxury hotels and restaurants.

“You can find Silver Heights wines at the Mandarin Oriental, Conrad Tokyo, Edition Totanomon, Aman Group hotels, and Michelin-starred restaurant Ryuzu,” Milani said.

He highlighted that the winery’s flagship wines, The Summit and Jiayuan Collection, have been particularly successful in Japan.

Milani noted that Chinese wines are gaining interest among Japanese wine professionals. “For wine experts in Japan, Chinese wine is a novelty worth trying,” he said. However, he emphasized that Japan is a quality-driven market. “If a producer can offer clean, high-quality wine, Japan is the place to be,” Milani added.

Several premium Chinese wines have made notable inroads abroad in recent years. As previously reported by Vino Joy News, Ningxia’s wine exports surged 70.16% in the first half of 2024. This international success contrasts sharply with the current downturn in China’s domestic wine market.

Shen Yi, a wine industry professional, believes this is a positive development for Chinese wineries. “The international wine market is less saturated than China’s. As a new wine region, if the product is of decent quality, local wine enthusiasts are willing to give it a try. This presents opportunities for many premium Chinese wineries,” Shen said.

However, Shen also pointed out that while some wineries are finding success abroad, overall sales volumes remain relatively small. “Many wineries are just selling a few bottles to restaurants and hotels overseas.

It helps with brand recognition, but the volumes are still modest. Chinese wine remains a niche product overseas, so the primary focus for wineries will remain on the domestic market,” he explained.

Milani agreed, stating that while international sales are growing, China remains the winery’s main market. “Our strategy is to stay humble and focus on quality. China will always be our first market, but yes, exports are increasing,” he said.