Japan’s major beer brewers are opening facilities featuring eye-catching interactive experiences in a bid to crack open the interest of young people who have been shying away from the beverage.

Among the brewers aiming to attract new customers through this approach is Asahi Breweries Ltd., which opened a concept store showcasing its mainstay Super Dry beer in Tokyo’s posh Ginza district on Thursday.

The store features the “Super Dry Go Ride,” in which images are projected on a huge 4K screen along with sounds, shaking and wind, making visitors feel as though they are riding on a beer can going through the production process.

Visitors also can use a machine to draw characters and pictures in beer foam and even pour their own draft beer at the store, which will be open until the end of September.

“The rebound back toward beer has picked up pace since liquor taxes were revised [last year],” an Asahi Breweries official said at a preview tour of the store on Wednesday. “We hope all kinds of people, not just beer fans, will enjoy visiting this store.”

As for other beer makers, Kirin Brewery Co. will open its renovated Spring Valley Brewery Tokyo, a craft beer facility in Shibuya Ward, Tokyo, on May 30. The facility has an onsite brewery, and Kirin plans to hold events featuring music and art to create a space where visitors can comfortably enjoy drinking beer.

On April 3, Sapporo Breweries Ltd. opened a facility at the Yebisu Garden Place commercial complex in Shibuya Ward. More than 35,000 people have already visited the facility, which features displays of vintage Sapporo posters and bottles, and an exhibition that looks back on the brand’s history.

Suntory Holdings Ltd. has since April let visitors pour their own freshly brewed Premium Malts beer at its brewery in Fuchu, Tokyo.

“Alcohol is gradually becoming a thing that young people don’t feel a close affinity for,” said Naoko Kuga, a senior researcher at NLI Research Institute. “It’s vital that beer manufacturers make people interested in their products through social media and experiences such as test tastings and hands-on attractions.”
 
 

The Bank of Japan kept its ultra-low interest rates unchanged Friday but analysts say the tumbling yen is putting pressure on officials to act.

With the currency at three-decade lows against the dollar, speculation has grown that authorities could intervene in forex markets to provide support for the first time since 2022.

A weaker yen pushes up the price of imported goods, so the BOJ could lift its inflation forecasts and potentially move away from its ultra-loose policies more quickly, according to analysts.

On Friday morning, the dollar bought 156.10-11 yen, having touched 155.75 the previous day -- its highest since 1990.

If the falling yen creates "an impact too big to be ignored, it means that in some cases a change in monetary policy will become possible", BOJ Governor Kazuo Ueda said last week.

Finance Minister Shunichi Suzuki warned Friday the government was "concerned" about the negative aspects of the weak yen, repeating that authorities will take "all possible measures" if necessary, Japanese media said.

The central bank ditched its negative interest rate policy in March as it announced its first hike in 17 years, giving a brief lift to the yen.
But officials also suggested there were no more increases on the immediate horizon, tempering the yen's gains.

The currency is among other global units that have fallen against the dollar as a series of above-forecast U.S. inflation data dim hopes for Federal Reserve rate cuts.

This leaves a big differential between the policies of the central banks as the Fed holds rates at two-decade highs while the BoJ continues with its extreme easing.

So even if the BOJ holds steady, any tweaks to its easing program and the tone of comments from Ueda will be scrutinised for hints on future moves.

Ueda might want to take a long-term view, but "he may not be able to avoid the forex factor", said Hideo Kumano, chief economist of Dai-ichi Life Research Institute.

"Amidst the ongoing yen depreciation against the U.S. dollar, the pressure intensifies on Japanese policymakers to translate their verbal assurances into concrete measures," said Luca Santos, currency analyst ACY Securities.

The BOJ has spent vast amounts on bonds and other assets to pump liquidity into the Japanese economy, targeting inflation of two percent that policymakers hoped would fuel growth.

In March, inflation stood at 2.6 percent.
Jiji Press cited sources Friday as saying BOJ policymakers would discuss ways to reduce the bank's purchases of Japanese government bonds.

The institution currently holds 592 trillion yen in JGBs, an amount equivalent to the size of the country's gross domestic product in 2023.



© 2024 AFP
 
 

Finance Minister Shunichi Suzuki said Thursday there is no change "at all" in the Japanese government's stance that it will act appropriately to address the weakening of the yen after it slipped past 155 to the U.S. dollar

Speaking in parliament, Suzuki said the government is carefully monitoring currency market developments but declined to comment further, amid market vigilance over a possible yen-buying dollar-selling operation to slow the Japanese currency's fall.

"We are closely watching market developments. There is no change at all in our resolve to respond appropriately based on this," Suzuki said.

The finance chief has repeatedly issued verbal warnings about the yen's volatility, threatening to take appropriate action without ruling out any options.

Still, his latest comments did not suggest a change in tone, days after he said conditions were being set for "appropriate" action, without giving further details. Japan previously stepped into the currency market to arrest the yen's sharp drop in late 2022.

Japan's top government spokesman Yoshimasa Hayashi reiterated that currency moves should be stable, reflecting economic fundamentals.

"We are of the view that excessive fluctuations are not desirable. The government will be closely watching market developments and take all necessary steps," said Hayashi, the chief Cabinet secretary.

The yen's depreciation reflects a wide interest rate gap between Japan and the United States.

The Bank of Japan, which holds a two-day policy meeting from Thursday, raised interest rates for the first time in 17 years last month but the central bank is not expected to rapidly push rates higher and it has underscored the need to continue accommodative financial conditions.

The U.S. Federal Reserve, meanwhile, is now expected to cut interest rates later than initially thought, boosting the dollar further.

A weak yen inflates import costs, which contributes to higher inflation in Japan.
 
 

Nissan Motor Co on Thursday unveiled four new energy vehicle (NEV) concepts and showcased a strong lineup of electrified models at Auto China 2024 under the theme of “A new Nissan for a new era in China,” underscoring its latest achievements and future direction in electrification.

Nissan also announced that it will launch one more NEV in the market than previously disclosed, bringing the total of the planned vehicle launches to five by fiscal year 2026.

Nissan President and Chief Executive Officer Makoto Uchida said: “To achieve sustainable growth in the rapidly changing Chinese market, Nissan is committed to a China-tailored strategy as we announced in our new business plan, ‘The Arc’.

Starting with new energy vehicles to be based on the concepts unveiled today, Nissan will build a balanced product portfolio of diverse and competitive new models. Our aim will be to provide a more exciting mobility experience to all customers in China.”

The four NEV concept models unveiled, two EVs and two plug-in hybrids, are a joint effort with local partner Dong Feng and aimed to better address the future mobility needs of customers in China.

The Nissan Epoch Concept is an EV sedan for urban and suburban go-getters who wish to enhance their lifestyles with design and technologies.

The concept has an AI-expanded Internet of Things, and its virtual personal assistant makes life easier and more comfortable through communication that recognizes emotions.
 

• The Nissan Epic Concept is an EV SUV perfectly suited for adventurous city couples who explore on weekends, with autonomous driving for both the city and on highways. The vehicle can function as a mobile power source, with electricity to power equipment, campsites or parties. Meanwhile, its on-board technologies support and create a relaxing atmosphere.
• The Nissan Era Concept is a plug-in hybrid SUV that supports urban lifestyles and is well suited to young businesspeople who treat their car as a second home. With an interconnected entertainment system and zero-gravity seats, its advanced e-4ORCE all-wheel control and active air suspension provide both a comfortable and confident drive.
• The Nissan Evo Concept plug-in hybrid sedan is perfect for weekend getaways and creating special moments for the whole family. In addition to its advanced driver support and safety functions, its AI-enhanced virtual personal assistant helps properly deliver the intended drive and journey.

 
 

About 70 pct of companies in Japan will implement pay scale increases in fiscal 2024, a survey by the Finance Ministry showed Monday.

According to the survey, the proportion of companies planning to raise their pay scales stood at 70.7 pct, up by 6.3 percentage points from the previous year.

The proportion of such companies rose 8.8 points to 63.1 pct among small and medium-sized firms, outpacing a 3.2-point increase among large companies.

Companies planning to implement pay scale increases of 3 pct or more accounted for 59.8 pct, up 23.4 points. Companies at which pay scale hikes and regular pay increases will total 5 pct or more came to 36.5 pct, nearly doubling from the previous year.

“Raising employees’ motivation to work, improving working conditions and preventing employees from quitting” was the most common reason for pay hikes, followed by “responding to rising prices” and “securing new employees.”

Meanwhile, 50.2 pct of small and medium-sized firms said that they had been unable to pass on rising labor costs in their product and service prices, partly due to a lack of understanding from their clients.

The survey also showed that about 40 pct of firms were struggling with labor shortages even after raising wages.

In the survey, an official in the hotel industry said that continued population falls and low wages are behind labor shortages.

An official at an industrial machinery maker said that some flexibility is needed in working hour regulations.

The survey was conducted from March to this month, receiving answers from around 1,100 companies throughout Japan.
 
 

Japanese auto giant Honda will open an electric vehicle plant in eastern Canada, a Canadian government source familiar with the multibillion-dollar project told AFP on Monday.

The federal government as well as the province of Ontario, where the plant will be built, will both provide some financial incentives for the deal, according to the source, who spoke on condition of anonymity.

The official announcement is due Thursday, though Ontario premier Doug Ford hinted at the deal on Monday.

"This week, we've landed a new deal. It will be the largest deal in Canadian history. It'll be double the size of Volkswagen," he said, referring to a battery plant announced last year, for which the German automaker pledged Can$7 billion (U.S.$5 billion) in investment.

Canada in recent years has been positioning itself as an attractive destination for electric vehicle investment, touting tax incentives, renewable energy access and its rare mineral deposits.

The Honda plant, to be built an hour outside Toronto, in Alliston, will also produce electric-vehicle batteries, joining existing Volkswagen and Stellantis battery plants.

In January, when news of the deal first bubbled up in the Japanese press, the Nikkei newspaper estimated it would be worth Can$14 billion -- numbers backed up by Canadian officials recently.

In the federal budget announced last week, Prime Minister Justin Trudeau's government introduced a new business tax credit, granting companies a 10 percent rebate on construction costs for new buildings used in key segments of the electric vehicle supply chain.

Canada's strategy follows that of the neighboring United States, whose Inflation Reduction Act has provided a host of incentives for green industry.

Honda hopes to sell only zero-emission vehicles by 2040, with a goal of going carbon-neutral in its own operations by 2050.


© 2024 AFP
 
 

 
Takashimaya, a Japanese operator of upscale department stores, plans to open a shopping centre in Hanoi in 2026 that will be the company's first new location abroad in eight years, Japanese newspaper Nikkei reported.
 
Takashimaya, a Japanese operator of upscale department stores, plans to open a shopping centre in Hanoi in 2026 that will be the company's first new location abroad in eight years, Japanese newspaper Nikkei reported.

Takashimaya President Yoshio Murata told Nikkei in a recent interview that the company’s subsidiary Toshin Development has started work on a mixed-use complex in Hanoi. Along with a department store, the site will include space for housing, offices and commercial tenants.

Takashimaya is expected to invest an estimated 2 billion JYP (12.9 million USD) in opening the department store.

The Hanoi complex will be the company's first overseas location since its Bangkok store opened in 2018, and its fifth department store in Southeast Asia and China combined. 

With growth getting harder to come by in Japan, Takashimaya is looking to Southeast Asia in particular to expand its profit base, Nikkei noted.

Vietnam is being positioned as Takashimaya's biggest growth market due to the country's expanding middle and upper classes. However, in Vietnam, it faces heavy competition not only with local players but also with Lotte Group from the Republic of Korea and Aeon Mall from Japan.

Murata said Takashimaya will create stores that will compete with other stores, and that demand for Japanese product quality will rise as the standard of living improves.

The new complex will feature a department store with about 10,000 sq.m of sales space, along with specialty stores. Takashimaya is considering bringing in Japanese tenants to sell such items as food, cosmetics and children's clothing.

In Vietnam, Takashimaya opened its first retail centre in Ho Chi Minh City in 2016, which posted a 2% increase in revenues in the fiscal year ending February to 3 billion JPY./.
 

Environmentally conscious Japanese companies are among those displaying their wares at the 62nd Salone del Mobile.Milano, an international furniture fair that kicked off Tuesday in Milan.

About 2,000 companies and designers are participating in the Salone this year, including the Japanese businesses Karimoku Furniture Inc., Maruni Wood Industry Inc., and Ritzwell & Co.

In recent years, these companies have endeavored to create products that are environmentally friendly. They have also caught the public’s eye with well-conceived designs that allow their products to be used for a long time and by using recycled materials.

Salone del Mobile.Milano is part of Milano Design Week. Exhibitions and events featuring designs and art will take place across the Italian city through Sunday.

Visitors to the Salone can examine new furniture, as well as model kitchens and bathrooms.
 

 

Japan recorded a trade deficit for the third straight fiscal year as the costs of energy and other imports rose and the yen remained weak.

The deficit was 5.89 trillion yen ($38 billion) for the fiscal year that ended in March, according to Finance Ministry data released Wednesday.

The biggest trade deficits were in the Middle East, mainly Saudi Arabia and the United Arab Emirates, as well as Australia and Indonesia. Japan had a trade surplus with the U.S. and some European countries.

Annual exports to China slipped slightly, declining for the first time in four years, although the latest monthly data show exports to China recovering, growing 12% from the previous year.

Robert Carnell, regional head of research Asia-Pacific at ING Economics, said strong technology-related exports were behind the jump in exports to China, while noting exports were also growing to other regions.
“We think exports will be the main engine for growth in the coming months,” he said in a report.

The recent decline in the value of the Japanese yen affected the trade balance, as it cost more in yen to import and boosted the value of exports when converted to yen. The U.S. dollar is trading at above 150 yen recently, up from 130-yen mark a year ago.

Data for the month of March, also released Wednesday, showed Japan marked a trade surplus of 366.5 billion yen ($2.4 billion), as exports grew 7% from a year ago, while imports declined nearly 5%. Exports to the U.S. in March grew more than 8%.

The fiscal 2023 trade deficit was much smaller than what was racked up in fiscal 2022, when the economy was hit by the war in Ukraine and energy prices soared. It was about the same as what was recorded in fiscal 2021. Japan had a trade surplus in fiscal 2020.

The social restrictions related to the coronavirus pandemic made securing parts, including computer chips, a challenge, denting Japan’s production and exports. But such problems have gradually eased.

By product category, Japan imported food, while exporting autos, auto parts and electrical machinery. Inbound tourism is booming, which counts statistically as an export.
 
 

 
Junji Ito, who served as president of Kanebo, currently Kracie, and chairman of Japan Airlines, died in December 2021 at the age of 99, people familiar with the matter said Tuesday.

Ito joined the predecessor of Kanebo in 1948 and assumed the role of president in 1968 at the age of 45 after being recognized for his achievements in labor affairs.

During his time as head of the company, Ito expanded its textile business while diversifying it into areas such as cosmetics, food and pharmaceuticals.

In 1984, he assumed the post of chairman. He held the reins of the company for 24 years until he stepped aside to honorary chairman in 1992.

Ito maintained his influence until the company faced a financial crisis and asked for government help in 2004. During the company's reconstruction process, he came under fire for his past push for hefty textile investments and diversification. He also faced headwinds after an accounting scandal emerged.

In December 1985, Ito became vice chairman of JAL at the request of the administration of then-Prime Minister Yasuhiro Nakasone.

He worked on securing air travel safety after the August 1985 crash of a JAL jumbo jet in eastern Japan. He became chairman in 1986, but stepped down the following year amid a backlash for his conciliatory labor policy.

Ito is said to be the real life inspiration behind the chairman of an airline who features in Toyoko Yamasaki's novel "Shizumanu Taiyo" (The Never Setting Sun).
 
 

Hankyu Corp. unveiled to the press on Tuesday a new train model to be introduced on its Kyoto Line between Osaka-umeda and Kyoto-kawaramachi stations.

The train model will have cars dedicated to a new premium seating service that will be rolled out this July. This is the first time in 11 years that Hankyu has introduced a new train model.

Compared to the existing trains, the new trains, which will be the same maroon color, consume up to 60% less electricity and are more environmentally friendly.

 

The fee for the premium seating is ¥500 in addition to the fare. The seats are spaciously arranged and are equipped with a retractable table and power outlets.

A representative of the company said: “We were particular about creating a space that gives passengers a sense of quality. We hope that passengers will use it for a wide range of purposes, such as commuting to work and going on excursions.”
 
 

Japan, the United States and the Philippines agreed to forge ties to strengthen supply chains of nickel — a critical mineral essential for the batteries used in electric vehicles — at a trilateral summit at the White House on Thursday.

The Philippines is the world’s second-largest producer of nickel ore, and China is the second-largest producer of refined nickel.

The three countries will accelerate the creation of a supply chain that is not overly dependent on China to bolster their economic security.


Economic Security
 

 

“The three countries shared an awareness of the issues and agreed on the need for economic security, while the stable supply of critical minerals needs to be discussed,” Economy, Trade and Industry Minister Ken Saito said at a press conference in Washington on Thursday.

He attended the U.S.-Japan-Philippines Commerce and Industry Ministerial meeting in Washington ahead of the trilateral leaders’ summit meeting.

The joint statement issued after the summit meeting clearly stated, “Japan, the Philippines and the United States support critical minerals industries in all of our countries.”

The three countries will promote discussions on the stable supply of nickel through a framework in which resource-rich countries and high-consumption countries in Europe, Africa and other regions work together to share information and invest in developing critical minerals.

They also intend to move to expand the refining process to extract the metal from nickel ore beyond countries such as China and discuss effective policy support.


High Market Share

The Philippines is the world’s second-largest producer of nickel ore after Indonesia. However, Indonesia and China have a larger market share of smelted and refined nickel.

While Indonesia has banned the export of minerals, China is acquiring mining rights and interests in Indonesia and other Southeast Asian countries, increasing its influence in the international market.

China is also acquiring concessions in Africa and other regions and holds a high share of the refined products of critical minerals such as lithium and cobalt.

It is essential to build a supply network of nickel and other critical minerals that is not overly dependent on China, in order to counter the economic pressure it can place through trade restrictions. Companies are also under pressure to diversify their sourcing.

Meanwhile, reducing the carbon dioxide emissions and costs of producing mineral smelting products is a challenge.

As Chinese products are very price-competitive, it is also necessary to “take supportive measures to encourage companies to buy [alternative] products even if the price is higher due to environmental considerations,” a government official said.
 
 

Honda Motor Co. announced on Friday that it will postpone the launch of its mini commercial electric vehicle (EV), which had been scheduled to go on sale this spring, to autumn due to a longer-than-expected delay in parts procurement.

Pre-orders will begin in May, and the price and release date will be announced the following month, Honda said.

The model is a modified version of the N-VAN and will be Honda’s first mini-EV. It has a range of about 200 kilometers and is intended for short-distance delivery purposes.

Honda launched its first mass-produced EV in 2020, the Honda e, but sales were sluggish and production was halted in January. Nissan Motor Corp.’s mini-EV Sakura was selling well, and Honda had planned to recoup lost ground.

Toyota Motor Corp., Suzuki Motor Corp. and Daihatsu Motor Co. have been jointly developing a commercial mini-EV with the aim of launching it by the end of the last fiscal year. However, certification test irregularities involving Daihatsu that came to light in April last year have complicated production, leaving the launch date undetermined.
 

 

Today, Microsoft announced it will invest US$2.9 billion over the next two years to increase its hyperscale cloud computing and AI infrastructure in Japan. It will also expand its digital skilling programs with the goal of providing AI skilling to more than 3 million people over the next three years, open its first Microsoft Research Asia lab in Japan, and deepen its cybersecurity collaboration with the Government of Japan. 

These investments aim to support Japan’s key pillar to tackle deflation and stimulate the economy by expanding the infrastructure, skilled talent, and security required to accelerate Japan’s digital transformation and adoption of AI.

The announcement coincides with Japanese Prime Minister Fumio Kishida’s state visit to the United States, where he was joined by Microsoft Vice Chair and President Brad Smith, and Microsoft Japan President Miki Tsusaka. 

 

Expanding Japan’s AI and cloud infrastructure capacity  

The US$2.9 billion commitment is Microsoft’s single largest investment in its 46-year history in Japan, also the site of its first international office. It effectively doubles the company’s existing financial commitment to expand its AI and cloud infrastructure across Japan. 

This significant enhancement in digital capacity will enable Microsoft to provide more advanced computing resources in Japan, including the latest graphics processing units (GPUs), which are crucial for speeding up AI workloads. It builds on Microsoft’s support for the Generative AI Accelerator Challenge (GENIAC), a program led by the Ministry of Economy, Trade and Industry which helps innovative startups and established enterprises develop foundation models as a core technology of generative AI in Japan.  

 

Building Japan’s AI capability by training 3 million people 

Microsoft will also invest in training 3 million full-time and part-time workers across Japan over the next three years, giving them the skills they need to build and work with AI technologies.

This investment will be delivered through programs focused on assisting organizations and society at large, including women in general and also with a focus on developers and students.  

Microsoft will expand its Code; Without Barriers program to Japan and provide dedicated training for women looking to participate in AI-enabled work. It will also provide free and widely accessible content on AI, cybersecurity, and digital skills in partnership with the United Nations Institute for Training and Research (UNITAR). 

Nurturing advanced AI professionals who can drive further AI integration, Microsoft will offer courses and reference architectures for AI developers and technology companies in Japan. These will be augmented by Microsoft’s AI coding assistant, GitHub Copilot.

The company will also support startups with resources through the Microsoft for Startups Founders Hub and help implement AI-centric programs in vocational high schools. 

To advance the societal benefits offered by AI through companies of all sizes, governments, and public entities – including the Tokyo Metropolitan Government – Microsoft will continue with established programs that support the widespread adoption and application of AI tools.

Furthermore, Microsoft provides support in developing customers’ internal AI policies, including data management and security to ensure its responsible and safe use.  

 

Opening Japan’s first Microsoft Research Asia lab in Tokyo  

Microsoft Research Asia is extending its research leadership in the Asia-Pacific region with the opening of a lab in Tokyo.     

The new lab will have a unique focus on areas including embodied AI and robotics, societal AI and wellbeing, and scientific discovery that align with Japan’s socioeconomic priorities. Its establishment reflects Microsoft’s long-term commitment to Japan and its belief in the nation’s potential to lead the world in innovation. 

Microsoft Research is a division of Microsoft that pursues bold ideas and technical breakthroughs in AI, while building on a legacy of foundational computer science advances. As its fundamental research arm in the Asia-Pacific region, Microsoft Research Asia has collaborated with Japanese academia for more than two decades which have been instrumental in propelling cross-disciplinary research and fostering talent. 

To foster enhanced research collaboration, Microsoft will provide US$10 million resource grants over the next five years to both The University of Tokyo and to the Partnership on Artificial Intelligence Research between Keio University and Carnegie Mellon University. 
 

Partnering to strengthen Japan’s
cybersecurity defenses 

Microsoft will collaborate with Japan’s Cabinet Secretariat to strengthen cybersecurity resilience for the government, business, and society, as the nation enhances its cybersecurity approach under the government’s updated National Security Strategy.  

The collaboration will build on the services Microsoft provides to protect thousands of Japanese organizations every day. It will focus on areas such as information sharing, talent development, and technology solutions, with Microsoft to provide its expertise and advanced cloud and AI-driven security services as part of joint efforts to tackle cybersecurity threats.  
 

Leadership statements 

Fumio Kishida, Prime Minister of Japan  

“As economic activities in the digital space increase, it is important for the Japanese industry as a whole to work with global companies like Microsoft that are equipped with a set of digital infrastructure.

We appreciate Microsoft’s announcement of its new investment in Japan. Microsoft has made significant contributions to the social implementation of generative AI in Japan through various initiatives, and we look forward to further collaboration. We also look forward to deepening our cooperation in the field of cybersecurity.” 


Brad Smith, Vice Chair and President, Microsoft 

“Today’s announcement represents Microsoft’s most significant investment in Japan since we set roots here in 1978. These investments in digital infrastructure, AI skills, cybersecurity, and AI research are essential ingredients for Japan to build a robust AI Economy.”      


Ken Saito, Minister of Economy, Trade and Industry
 
“As digital investments increase around the world, we welcome Microsoft’s announcement of new investment in Japan and look forward to its future contribution to promoting Japan’s digital industries, including AI. Ministry of Economy, Trade and Industry will continue to work with Microsoft, a world leader in the digital field, to create both innovation and discipline.” 


Takuya Hirai, Chairperson, Headquarters for the Promotion of a Digital Society, Policy Research Council, Member of the House of the Representatives   

“The adoption of digital tools is essential for addressing Japan’s societal challenges of an aging population and the pursuit of economic growth and regional revitalization. Microsoft’s investment contributes significantly in advancing Japan’s AI capabilities, particularly in infrastructure and talent development.

I wholeheartedly welcome this initiative and look forward to the leadership role Microsoft can play in promoting collaboration between Japan and the United States, as well as across public and private sectors.” 


Miki Tsusaka, President, Microsoft Japan 

“We are honored to contribute to Japan and its future with our largest investment to date, technology and knowledge. In collaboration with our partners, Microsoft Japan is fully committed to supporting the people and organizations of Japan to solve social problems and achieve more.”  


Yuriko Koike, Governor of Tokyo Metropolitan 

“The Tokyo Metropolitan Government and Microsoft entered into a partnership last year and have been empowering Japan’s workforce with digital skills.

Today’s announcement by Microsoft, which includes programs to encourage women to embrace AI and provide AI skilling to three million people, is a significant step for Japan to lead in the age of digitalization.

The Tokyo Metropolitan Government pioneered the use of generative AI to make our offices more efficient and improve the quality of services provided to our citizens. We will continue to embrace cutting-edge technology and lead Japan’s digital transformation with unwavering dedication.” 


Chisa Mikami, Head of Hiroshima Office, UNITAR 

“Through the collaboration between UNITAR and Microsoft, we will strive to democratize access to AI education, ensuring that knowledge is freely available to all.

Together, we pave the way for advanced AI professionals, foster innovation in startups, and promote responsible AI practices across industries and sectors. With collective effort, we harness the transformative power of AI for the betterment of society.” 


Kevin Scott, Chief Technology Officer and Executive Vice President of AI, Microsoft 

“The impact that AI is poised to create over the coming years has the potential to generate unprecedented societal benefit for the entire world.

The steps we are taking today to empower Japanese citizens through AI technologies and programs—whether job training and skilling, improvements to infrastructure capacity, or new research investments—will in the aggregate help accelerate this process of beneficial innovation.

We’re particularly excited for Microsoft Research’s global footprint to further expand into Japan, extending the ability for our world-class research efforts to both contribute to and benefit from local diversity of thought and talent.” 


Teruo Fujii, President, The University of Tokyo 


“The University of Tokyo is committed to contributing to the realization of a better society through research and education focused on cutting-edge technologies such as artificial intelligence.

To maximize the benefits of those technologies and promote innovation while minimizing risks, it is essential to collaborate with partners who share our objectives. With the establishment of Microsoft Research Asia’s new lab in Tokyo, we enter an exciting new phase in our more than two decades of partnership with Microsoft.

We look forward to working together to further advance our research community and spearhead the development of outstanding human resources as we continue our journey together.” 
 
 

Ride-sharing services kicked off in Tokyo on Monday. Individuals who have employment contracts with the taxi companies managing the services began offering paid rides using private vehicles.

A ceremony in Edogawa Ward, Tokyo, marked the occasion before the ride-sharing vehicles — sporting white license plates to indicate private use — began services.

“We want to develop and expand the services nationwide to fill the transportation provider shortage,” Land, Infrastructure, Transport and Tourism Minister Tetsuo Saito said.

Taxi companies including Tokyo-based Nihon Kotsu Co. started the services in partnership with ride-hailing apps. More than 60 people provided ride-sharing services on Monday, and about 50 customers, including groups, had purchased a ride within little more than an hour.

The services are available on days and at times when conventional taxis are in short supply. Kanagawa, Aichi and Kyoto prefectures will launch similar services soon, followed by Hokkaido, Osaka and six other prefectures in May.

The government is also considering letting businesses besides cab companies manage ride-sharing operations but plans to study this initial implementation of the services first, focusing on such issues as guaranteeing safety and securing enough drivers.
 

Bank of Japan chief Kazuo Ueda said Tuesday the central bank will further reduce monetary stimulus if the country's basic inflation rate nears 2 percent as expected.

Ueda told a parliamentary session that the BOJ will examine upcoming data to confirm the strength of wage growth in line with the outcomes of labor-management negotiations this spring, and whether services prices will rise to achieve stable inflation.

He also said the BOJ's monetary policy is not designed to "control" foreign exchange rates, yet cautioned that a policy response would not be ruled out if the impact of currency moves on the economy cannot be ignored.

The BOJ's shift away from years of unorthodox monetary easing steps has so far failed to reverse the yen's weakness against the U.S. dollar, prompting a series of verbal warnings by Japanese monetary authorities of possible currency market intervention.

"If basic inflation gradually moves toward 2 percent as we expect, it will become possible to reduce the degree of monetary easing a little bit more," Ueda said during the upper house session.

The Japanese central bank ended its negative rate policy and yield cap program at its policy meeting in March, heartened by strong wage hikes that boosted the chances of its 2 percent inflation target being finally achieved in a "stable and sustainable manner."

The basic inflation rate, which strips away transitory factors, is currently "slightly below" 2 percent, making it necessary for financial conditions to remain "accommodative for the time being," Ueda said.

But the governor noted that the likelihood of reaching that target has increased greatly. "If the positive cycle (of pay and price hikes) strengthens more than we have seen, then it will be possible to reduce the degree of monetary easing at a faster pace," he added.

The BOJ currently expects core consumer prices, excluding volatile fresh food items, to rise 2.4 percent in fiscal 2024 through next March and then 1.8 percent in fiscal 2025. A fresh economic and price outlook report is scheduled for release at the end of a policy meeting later this month.

After going ahead with its first interest rate hike in 17 years, financial markets are looking for clues as to how far and fast the dovish central bank will raise rates.


© KYODO
 

 
 
Days after U.S. President Joe Biden joined his election rival Donald Trump in voicing concern about a Japanese purchase of U.S. Steel, the manufacturer began touting the benefits of the deal on billboards near its factories from Alabama to Pennsylvania.

The billboards may be the most public signs of what some Japanese officials say in private - that despite high hurdles, Nippon Steel could still steer through the fraught $15 billion acquisition of the iconic American manufacturer.

The deal may well hinge on whether regulators avoid election-year politics by clearing the acquisition after Nov 5, and, critically, on whether Nippon Steel can win over the influential United Steelworkers (USW) labour union.

Opposition from the Pittsburgh-based union has far-reaching implications in an election year where Pennsylvania is seen as a key battleground state.

The deal is effectively "on life support" after Biden's statement last month that U.S. Steel must remain domestically owned and operated, said David Boling, a former U.S. trade official in Japan who now works for consulting firm Eurasia Group.

Investors seem to agree. Biden's comment, which followed Trump's pledge to block the deal if he wins the Nov. 5 election, sent shares in both companies tumbling. U.S. Steel shares last traded at $41.10, well below the $55 per share price Nippon Steel has offered.

Nevertheless, it is still premature to declare the deal dead, four senior Japanese officials speaking on condition of anonymity told Reuters - a view shared by some analysts, consultants and lawyers. The White House declined to comment on whether Biden's statement meant the purchase could not proceed.

Ongoing regulatory reviews in the U.S. may serve to buy time, thereby delaying a final decision until after the election when the campaign rhetoric has dissipated, the officials and others said.

Furthermore, Nippon Steel could still take steps to ringfence its U.S. operations to ease concerns about foreign ownership.

And finally, the officials and others say, Nippon Steel could make its way through thorny talks and yet win over the steelworkers.

Publicly, Tokyo has sought to distance itself from the deal, saying it is a commercial matter - an approach widely seen as an attempt to play down any controversy ahead of a summit between between Japanese premier Fumio Kishida and Biden in Washington on April 10.


HIGH HURDLES

U.S. Steel's shareholders are due to vote on the acquisition on April 12, but with the firm's board having unanimously recommended shareholders approve, analysts expect it to pass.

The next real hurdle is regulatory. The Committee on Foreign Investment in the United States (CFIUS), a government panel that vets deals on national security grounds, is reviewing the transaction. Nippon Steel said the deal is also being examined by antitrust authorities in several countries including the U.S.

An influential U.S. Senator on Tuesday urged the White House to probe Nippon Steel's exposure to its strategic rival China, a connection the firm has said is "very limited".

While by law CFIUS should complete deliberations within 90 days, in practice it can take much longer via an increasingly common process where parties withdraw and refile their applications, its latest annual report shows.

"There is unlikely to be a decision until after the election," said Bill Reinsch, a former U.S. commerce official now advising the Center for Strategic and International Studies. Biden's comments "have not torpedoed the proposed acquisition," he added.

Two of the Japanese officials said the timing of the deal ahead of the election has stifled debate about its economic merits and that a delay could help calmer heads prevail.

But taking Biden at his word, getting around foreign ownership concerns won't be easy.

Nippon Steel has been at pains to stress its "deep roots" in the United States. It has had a presence there since the 1980s and has 4,000 employees in the country.

Nick Wall, a corporate M&A partner with Allen & Overy in Tokyo, said U.S. regulators may grant conditional approval to the deal if the firm makes changes to the management structure or ensures senior personnel are U.S. nationals.

"There could be structures put in place to ensure it’s owned and controlled by U.S. people, even if the economic control lies in Japan," said Wall, who is not involved in the deal.

The sensitive defense sector provides one such example.
The American subsidiary of British defense contractor BAE Systems does business with the U.S. government under a special agreement where the influence and control of its foreign parent is restricted.

A Biden adviser said the policy question was "settled" by the president and that if the deal is to include foreign partners it would need a "different approach", declining to elaborate.

That puts the focus on the USW, which blasted the deal and both companies for not consulting it before the deal was announced. In a letter to its members on Tuesday, USW leadership called Nippon Steel's latest pledges to support workers a "collection of empty promises".

But a source close to Nippon Steel, who declined to be named due to the sensitivity of the negotiations, said the union could be using the political situation to get better terms and appears to remain engaged in talks.

"There will be no problem to clear U.S. Steel shareholders meeting, anti-trust examination, and CFIUS examination, if they are handled normally," said Shinichiro Ozaki, senior analyst at Daiwa Securities.

"But the most important thing, both before and after Biden's statement, remains whether or not Nippon Steel can reach an agreement with USW."


© Thomson Reuters 2024.
 
 

Japan on Monday launched ride-hailing services in Tokyo, with other areas across the country to follow suit in a bid to address a nationwide shortage of taxi drivers.

The country partially lifted a ban on the services earlier this month, allowing drivers with a standard license to offer taxi services on specified days and hours using their own private vehicle, provided they are under the management of a local tax company.

The Tokyo Hire-Taxi Association, one of the operators involved in the project, held a ceremony to commemorate the launch, demonstrating how drivers use a dedicated smartphone app to receive dispatch requests and to input health-related data concerning their fitness to drive.

"We will greatly expand the ride-hailing business and establish it throughout Japan to resolve a shortage of transport providers," transport minister Tetsuo Saito said at the ceremony. He went for a test ride using the service.

About 80 drivers were available as of Monday morning, with the services used around 50 times before 9 a.m., according to the association.

Registered vehicles are dispatched with destinations and fares calculated in advance. Only cashless payments can be accepted in principle.

The services are now available in Tokyo's 23 wards and the suburban areas of Musashino and Mitaka from Monday to Friday from 7 a.m. to before 11 a.m. and from 12 a.m. to before 4 a.m. on Saturday mornings.

The services will later be expanded, with the transport ministry having also allowed their introduction in other large cities such as Kyoto, Osaka, Nagoya and Fukuoka.

The government is aiming to start the services later this month in Kyoto, Nagoya and Yokohama.
 
 

Tuesday will mark one year since Bank of Japan Gov. Kazuo Ueda took office. Market players have praised his skill in ending 11 years of massive monetary easing, but the key point of this exit is still to come. The next move, including additional interest rate hikes, will be a focus of attention for the Japanese central bank under Ueda.

“Based on the results of the spring labor-management wage negotiations, the basic growth rate of consumer prices will gradually increase,” Ueda said at a meeting of the House of Representatives Financial Affairs Committee on Friday, reiterating his confidence that the price stability target of 2% inflation will be achieved.

In April last year, Ueda became the first postwar BOJ governor from an academic background. In July and October 2023, he changed the operation of the yield curve control, and in March this year he lifted the negative interest rate policy and eliminated the yield curve control.

Those moves marked a quick end to the framework of large-scale monetary easing measures introduced by former Gov. Haruhiko Kuroda.

Many market players commended Ueda’s monetary management.
“He was able to smoothly end the large-scale easing without missing the opportunity of large wage hikes in the spring labor-management wage negotiations,” said Tsuyoshi Ueno of NLI Research Institute. “As he is a scholar, his explanations are well reasoned, and they are also detailed and easy to understand.”

 

Normal monetary policy

At a press conference following a Monetary Policy Meeting on March 19, Ueda stressed that there will be a “normal monetary policy” in the future.

With the lifting of the negative interest rate policy, short-term interest rates have moved into positive territory for the first time in about eight years. “There is no confusion in the market, and the [policy change] has landed fine,” said Masahiro Ichikawa of Sumitomo Mitsui DS Asset Management Co.

The end of the negative interest rate policy resulted in only an about 0.1% increase in interest rates, and market attention is turning to additional rate hikes.

Behind the speculation about additional interest rate hikes is the expectation that companies will pass on higher wages to selling prices, increasing the probability that the price stability target will be realized.

With the government’s income tax cut coming in June, some in the market believe an additional rate hike could occur as early as this summer.

However, deciding on an additional rate hike is not easy. Another rate increase could adversely affect the economy, causing a further deterioration in consumer spending, which was already weakening, and a greater borrowing burden on businesses and households.

 

Quantitative tightening

The handling of Japanese government bonds purchased by the BOJ is also a difficult task.

According to preliminary Flow of Funds statistics released last month, the outstanding amount of government bonds held by the central bank stood at ¥581 trillion as of the end of December, accounting for 53.8% of overall bond holdings. To normalize monetary policy, a reduction in the outstanding amount of government bonds is inevitable.

At the lower house committee session on Friday, Ueda expressed his desire to introduce quantitative tightening. “In the future, we want to reduce the amount of bond purchases and shift to a situation in which [the outstanding amount] shrinks along with the redemption of bonds,” Ueda said.

When a large amount of government bonds are held by the central bank, that itself keeps long-term interest rates low. This is why the BOJ has continued to purchase about ¥6 trillion of government bonds per month for the time being, to maintain the amount it holds. A reduction of the holding could cause a sharp rise in long-term interest rates.
 

 

An earthquake with a preliminary magnitude of 6.0 jolted the Tohoku region at 12:16 p.m. Thursday, according to the Japan Meteorological Agency. There was no risk of a tsunami, the agency said.

The quake’s epicenter was off the coast of Fukushima Prefecture at a depth of about 40 kilometers, according to the agency.

The temblor registered 4 on the Japanese seismic intensity scale of 7 in some parts of Fukushima, Iwate, Miyagi prefectures and 2 in central Tokyo.
 
 

Japanese whisky is world-famous, often eye-wateringly expensive, and as of Monday are more strictly defined in an industry push to deter foreign-made imposters.

Overseas demand has soared in recent years for the country's acclaimed whiskies, sending prices sky-high, especially for the rarer aged varieties.

But concern and confusion have also grown among producers and customers as beverages made elsewhere -- and sometimes not even whisky -- are marketed as "Japanese whisky".

So the Japan Spirits and Liqueurs Makers Association has brought in a new definition for the spirit, officially in use from Monday following a three-year grace period.

To call their products Japanese whisky, makers must now use water sourced in Japan, and their whisky barrels must be stored in Japan for at least three years, among other rules.

Although violators will not face sanctions, manufacturers have hailed the new industry standard as a way to safeguard the image of their tipples worldwide.

"We believe this will further improve the reputation (of Japanese whisky) because it makes it easier for our international customers to distinguish it from other products," major producer Suntory told AFP.

Experts say Japan has around 100 distilleries, whose whisky has commanded increasing global respect since the early 2000s.

Annual exports of Japanese whisky were worth 56 billion yen ($370 million) in 2022 -- 14 times more than a decade earlier. In 2023, this figure eased to 50 billion yen.

Brands such as Nikka Whisky's Yoichi 10 and Yamazaki 12 have scooped prestigious international awards, and distillers now plan production decades in advance to cope with demand.

Suntory's Hibiki 17 played a starring role in the hit 2003 movie "Lost in Translation", in which the character played by Bill Murray promoted the drink with the line: "For relaxing times, make it Suntory time."

© 2024 AFP
 
 

Shohei Ohtani hit his first home run for the Los Angeles Dodgers, a solo drive in the seventh inning in a 5-4 win over the San Francisco Giants on Wednesday night that finished a three-game sweep.

Playing his ninth game for his new team, Ohtani pulled a 93.2 mph sinker from left-hander Taylor Rogers on the upper, outer portion of the strike zone into the right-center field pavilion. The ball left his bat at 105.6 mph and landed 430 feet from the plate, where it was picked up by a fan.

The home run came in the 41st plate appearance for the two-time MVP, who left the Los Angeles Angels after last season as a free agent and agreed to a record $700 million, 10-year contract with the Dodgers.

Ohtani’s home run, the 172nd of his major league career, put the Dodgers ahead 5-3. The two-way star is limited to hitting this year following elbow surgery in September and entered in a 3-for-20 slide. He also singled and scored in the second inning, and he is hitting .270 with four RBIs.

Tyler Glasnow (2-0) retired 15 of his first 18 batters before faltering in the sixth. He gave up three runs and four hits with seven strikeouts and two walks.

Joe Kelly pitched the seventh and Daniel Hudson the eighth before Dinelson Lamet finished the five-hitter by striking out two in a perfect ninth for his first professional save.

Miguel Rojas also homered and drove in two runs for the Dodgers, who won their fourth straight game and improved to 7-2.

Jorge Solerand Patrick Bailey hit a solo home runs for the Giants, who have lost four straight and dropped to 2-5. San Francisco has dropped 14 of its last 19 against the Dodgers.

Kyle Harrison (1-1) gave up four runs, six hits and three walks in five innings.

After Bailey's home run tied the score in the third, Will Smith hit an RBI double in the bottom half and scored on Teoscar Hernández's single for a 3-1 lead.
 
 

OpenAI, the developer of generative artificial intelligence tool ChatGPT, will launch its first Asian base in Tokyo this month, it was learned Monday.

The U.S. company plans to establish a Japanese unit to provide services for corporate clients, while hoping to participate in the creation of Japanese rules for generative AI, informed sources said.

OpenAI Chief Operating Officer Brad Lightcap is scheduled to hold a press conference in Tokyo on April 15 to explain the company’s business for corporate clients. It also plans to hire employees in Japan.

The San Francisco-based company has already set up overseas bases, including one in London, but none in Asia.

In April last year, OpenAI Chief Executive Officer Sam Altman visited Japan and revealed the company’s plan to open a base in Japan during a meeting with Japanese Prime Minister Fumio Kishida.
 
 

Ride-sharing services were set to begin in some districts in Tokyo and three other prefectures this month under the management of taxi companies.

The services were to be rolled out during the first month of fiscal 2024 in parts of the four prefectures, which also include Kanagawa, Aichi and Kyoto, by taxi operators that have completed preparations.

The focus is on whether ride-sharing services, in which general drivers offer paid rides using their private vehicles, will be established as a means of transportation amid taxi shortages in metropolitan and tourist areas.

The services will be introduced in Tokyo’s 23 special wards and nearby cities such as Musashino, some Kanagawa municipalities including the cities of Yokohama and Kawasaki, an area centered around the Aichi capital of Nagoya and a district including Kyoto’s namesake capital. All the areas suffer from severe taxi shortages.

The services will be allowed under the management of taxi firms during certain hours and days of the week.

Fares will be the same as those for taxis and will be paid through cashless payment services in principle.

Users will book rides basically through ride-hailing apps. The destinations and fares will be determined in advance of trips.

General drivers without a Class 2 driver’s license, required to transport passengers in vehicles, will be allowed to offer rides on condition that they had no accidents in the past two years.

The taxi companies will be responsible for providing safety guidance and vehicle maintenance.

Ride-sharing services will also be made available in eight districts in the metropolitan areas of the cities of Sapporo, Sendai, Saitama, Chiba, Osaka, Kobe, Hiroshima and Fukuoka from May onward.

The services were to be allowed at other regions from this month, on Fridays and Saturdays between 4 p.m. and 6 a.m. the following day, under certain conditions such as that there is a taxi shortage.

Separately, Japan was to ease restrictions this month on paid passenger transport services by local governments and nonprofit organizations in underpopulated areas where taxis and buses are not available.

Service providers will be able to operate jointly with taxi companies so that they can secure vehicles more easily.
 
 

In the coming years, Satoaki Kanoh needs to replace almost a dozen aging machines at his Tokyo-based maker of acrylic panels, a major undertaking that he worries will become even more expensive.

"Ideally, I'd like to do one a year. But I don't have that much money," Kanoh said of the customised pieces of machinery that cost around 50 million yen apiece. "If we have to pay a lot to borrow, we could end up in a really tough spot."

Japan's central bank last month raised interest rates for the first time in 17 years and scrapped its negative rates policy. While the move is more symbolic than anything else - rates remain pinned near zero - it has nonetheless opened the door to something Japan hasn't seen in decades: a world where it will cost more to borrow money.

Now, millions of Japanese, from small business owners like Kanoh to first-time homebuyers, are sizing up how to adapt to higher borrowing costs after the long, lean years of deflation, when prices, wages and the cost of money changed little.

How they cope will have vast implications in an economy where small and medium-sized companies employ some 70% of the workforce and private consumption accounts for more than half of the gross domestic product.

Kanoh worries about the potential pace of rate increases. Too much too quickly and Japan won't be able to adapt, he said.

His company, Shinshi Co, has about 100 million yen in loans now, but that's at a fixed rate.

Even on a smaller loan of about 10 million yen, the difference between 3% and 1% would be considerable, with the annual interest payment on 3% equivalent to an one employee'smonthly salary, he said.


DEFLATION PLAYBOOK


Japanese companies and households have long stuck to a deflation playbook: hoard cash and cut costs. That left the economy in a vicious cycle of stop-start growth and flat-lining wages.

Shaking off that deflationary mindset, may prove difficult, even as prices, and some wages, go up.

While big companies are now giving some of the largest pay increases in decades, it's less clear how much will trickle down to smaller firms.
Around 60% of Japanese firms expect rates to rise to 0.25% by the end of the year, a Reuters survey showed on Thursday.

Many said they are looking to front-load spending before borrowing costs rise Eiichi Hagiwara, who owns a Tokyo-based designer of water treatment equipment, says higher borrowing costs could eat into the already razor-thin margins at small companies.

For him, that could take bigger projects off the table, as those require loans to cover materials and other costs up front, he said. Having to pay interest ultimately means lower profit margins.

"There's no work with big margins now," Hagiwara said. "If I don't lower prices I can't get the work."

Generally he eschews lending, preferring to keep cash reserves for operational costs. He also relies on soft skills, such as taking customers out to cement relationships.

The 76-year-old set up his company, EN-TEC, two decades ago and employs around 20 people. One key to success is being prudent, and ensuring prices are kept low to preserve business ties.

"You have to make sure to take the minimum profit you can," he said. "If you borrow money and interest rates go up, you'll be in trouble."

Hagiwara has only taken out a big loan once, about a decade ago, for around 100 million yen to buy the building for the company headquarters.
But word of the loan soon got out and associates and competitors assumed the company was in trouble. Hagiwara then decided to pay it back in full, which he did within half a year of borrowing the money.


SILVER LINING

Some business owners, especially those reliant on imports, hope interest rates could finally put a floor under the weak yen. The currency's chronic sell-off has driven up the cost of food and fuel.

For Yasunobu Tashiro, who runs a restaurant and a shop selling handbags and other imported goods in the hot spring town of Kinugawa Onsen, the yen has been a massive headache.

"We're in the import business so the weak yen has been causing us a lot of trouble when we go overseas," he said. Purchases that used to cost the equivalent of $6,700 now cost $10,000 he said.

However, Haruka Yoda, a 29-year-old IT engineer, is more upbeat.
He's borrowed money to buy a home with his wife and one-month-old baby.

"I feel hopeful that they won't move too much," he said."Even if interest rates rise significantly our salaries might also go up," he said.


© Thomson Reuters 2024
 
 

The dollar briefly climbed as high as ¥151.97 in Tokyo trading Wednesday, hitting the highest level in 33 years and eight months.

Dollar buying for yen accelerated amid growing anticipation for a wider gap ahead between Japanese and U.S. interest rates, market sources said.

At noon, the dollar stood at ¥151.88-89, up from ¥151.32-32 at 5 p.m. Tuesday.
 
 

More and more companies have been introducing alumni systems to strengthen ties with former employees. In doing so, the companies aim to rehire them as skilled workers or create new businesses in collaboration with their current employers.

As job changes become more common, a view of former employees as “partners” has gradually taken root. Some of those rehired have even become presidents or top executives at companies.
 

Gratitude to former workplace

Junichi Tomomatsu, 30, who quit his job at SMBC Nikko Securities Inc. in 2018 and now works for a consulting firm, attended a social event held by the company in Tokyo in December. All of the 40 or so participants at the event used to work for the company.

“I’m grateful to the company for training me to be what I am now. If there is anything I can do from the outside as a former employee, I’d like to do it,” said Tomomatsu.

In May last year, the company began building a network of former employees, which now has about 300 registered members. The company has maintained the network by providing information and organizing get-togethers.“We will try to rehire former employees and create business opportunities with them [through the network],” said an official of SMBC Nikko Securities.

Sumitomo Corp. started organizing similar social events with former employees in 2019. The company has also set up a dedicated website for its former workers. About 110 people, including current employees, attended a get-together in January this year.

There is a growing understanding that former employees are “our company’s partners,” Sumitomo Corp. says. It is already using its alumni system for rehires and business collaborations.

 

Fewer job mismatches

As competition for skilled workers intensifies, there are high hopes that former employees with new experience can be of immediate use. And since they are already familiar with the company’s culture and business, there is less chance of a job mismatch.

According to a survey of corporate recruiters conducted last year by Recruit Co., about 12% of client companies had hired employees from an alumni network. The financial industry, which is looking to diversify revenue sources amid low interest rates, is especially active in seeking alumni, with 19% of companies having hired former employees.

Mitsui Sumitomo Insurance Co. hired 10 former employees after introducing an alumni system in 2022.“Now that I know the world outside, I see how good my old workplace is,” said Shoichiro Yokomoto, 39, who was rehired by the company in April last year after working for a consulting firm and a startup.

“I wanted to test my skills, which I believe improved while I was away.” He is now mainly in charge of overseas business planning, the same job he had before.

Koji Omori of Hackazouk Inc., a startup in Tokyo that helps companies introduce alumni systems, said: “Rehiring former employees has great advantages, and can lead to change in the company.”
 

Reducing costs

When recruiting through an agency, companies are usually required to pay about 30% of the annual salary of each new employee to that agency. Alumni networks can cut down on such costs.

However, since employee data is usually deleted when someone leaves the company to protect personal information, it becomes difficult to learn about their current situation.

Tomoki Kaneda, who helps run an alumni system-related business at Recruit Co., said: “To rehire former employees smoothly, you need to prepare by, for example, getting their permission and saving information such as their personnel evaluations and contact information when they leave the company.”
 
 

The yen hit a 34-year low against the dollar on Wednesday, just over a week after the Bank of Japan announced a much-anticipated interest rate hike in a shift away from years of ultra-loose monetary policy.

The unit weakened to 151.97 per dollar, its softest since 1990, before recovering to levels of around 151.72.

The drop came after a top central bank official suggested it would continue to pursue an accommodative policy for the time being, echoing previous comments from the BOJ.

But soon afterwards, the finance minister said authorities would not hesitate to "take resolute action against excessive" forex moves -- raising speculation of a government intervention to prop up the currency.

Over the past two years the yen has sharply weakened from levels of around 115 against the dollar, before Russia's invasion of Ukraine.

While central banks around the world aggressively hiked rates to tackle soaring inflation, the Bank of Japan stuck to its ultra-loose policies, driving down the yen.

This has been good news for exporters, but not for consumers as it made imports more expensive.

Last week the bank finally took a step away from its unorthodox monetary stimulus program -- hiking rates for the first time since 2007.
The yen has continued to slide since then, however.

Wednesday's dip came after Naoki Tamura, a BOJ board member, reportedly told business leaders in northern Japan that "slow but steady progress" was needed on scaling back the central bank's long-standing ultra-easy policy.

He repeated a line from a bank policy statement about financial conditions staying accommodative for now, which triggered fresh falls in the yen, Bloomberg News reported.

After the currency hit a 34-year low, Finance Minister Shunichi Suzuki said the government was watching the situation closely.

"We're monitoring market movements with a high sense of urgency. We will take resolute action against excessive moves, without ruling out any options," he told reporters.

The government last intervened in markets to support the yen in October 2022, and on Monday a finance ministry currency diplomat also hinted that it could be on the cards again.

ING said in its morning note on Wednesday that forex markets would "test the verbal intervention of the last few days to see if there is more substance than just words".

Alvin Tan from Royal Bank of Canada added that "intervention concerns" had capped the yen's slide.

But risks of further depreciation remain thanks to factors including "the yen's sizable yield disadvantage", he said.



© 2024 AFP
 
 

An increasing number of companies are raising their starting salaries as they look to hire and retain talented people. The low birthrate and high turnover rates of young employees, combined with the need to secure new personnel to deal with digitalization and other challenges, are issues they are having to face.

Major steel company JFE Steel Corp. decided to raise its monthly starting salaries by ¥50,000 to ¥282,000 for university graduates and by ¥40,000 to ¥220,000 for high school graduates joining this April. This is a significant increase of over 20% from the previous year.

In recent years, JFE has prioritized streamlining, such as by suspending operations of a blast furnace in Kawasaki and reducing the number of new hires. In fiscal 2024, the company will instead increase the number of new hires for on-site and clerical positions by 60%.

According to the Institute of Labor Administration, a private research company, the average monthly starting salary for university graduates will increase by 3.1% to ¥225,686 and by 3.7% to ¥183,388 for high school graduates from April.

In the 2024 “shunto” labor-management wage negotiations, Nippon Steel Corp. offered a pay-scale rise that exceeded what its labor union had sought. Other companies also offered high pay raises in this year’s shunto negotiations.

“We need to hire diverse talent to promote digitalization, overseas operations and decarbonization,” an official from a major steel manufacturer said. Amid this situation, more and more companies are starting to offer starting salaries that far exceed the average level.

Dai-ichi Life Holdings, Inc. raised its monthly starting salary by ¥45,000 to ¥321,000 for university graduates joining in April. Itochu Corp. will pay a monthly starting salary of ¥305,000, up ¥50,000 from the previous year.

Mizuho Bank, Ltd. will raise its monthly starting salary to ¥260,000 this April. Miyazaki Bank, Ltd. and the Bank of Fukuoka, Ltd. — regional banks in Kyushu — will raise their monthly starting salaries to the same level for university graduates joining in April 2025, which is an increase of ¥55,000 for Miyazaki Bank and ¥45,000 for the Bank of Fukuoka.

An official from a regional bank said: “We have to compete with major companies in Tokyo to acquire people who are from our region and studied in Tokyo. We cannot stand on the same stage unless we offer high starting salaries.”

 

30% of new hires quit within 3 yrs

On top of the decreasing number of new graduates due to the declining birthrate, companies are also concerned about the high turnover rates of young employees.

According to the Health, Labor and Welfare Ministry, 32.3% of employees who had graduated from universities in March 2020 left their jobs within three years.

“Some people quit because they are dissatisfied with their work, while low wages for younger employees due to deflation are another cause for the high turnover rates,” an official from a major manufacturing company said.

An increasing number of companies are now focusing on raising wages for young employees to increase retention rates. In policy talks by the Japan Business Federation (Keidanren) for this year’s shunto negotiations, Keidanren asked member companies to consider pay-scale increase for all employees, so their starting salary hike would not result in new employees receiving higher salaries than other employees close to them in age.

Nomura Holdings, Inc. will raise its monthly starting salary by ¥20,000 to ¥265,000 for new employees joining its affiliate company Nomura Securities Co. this April, while increasing wages for young employees in their first, second and third years of employment by 16% on average.

Nomura Holdings President Kentaro Okuda said, “There are many young employees who quit, but we want to increase our competitiveness by acquiring talented people.

JFE raised wages for all its employees by an average of 12.5%, including the annual wage hike, in this year’s shunto negotiations and the pay raises for high school graduate employees aged 18 to 29 reached 18.5%.

Kozue Togo, a chief researcher at Mynavi Career Research Lab, said: “A starting salary is a key factor for students when choosing companies to work for. In order to keep employees for a long period of time, companies need to promote themselves with their employee benefits and the significance of their work.”
 
 

The president of Honda Aircraft Co., a U.S. subsidiary of Honda Motor Co., said the aircraft manufacturer aims to sell 60 HondaJet small business aircraft annually by 2028, about three times more than in 2023.

Honda Aircraft President Hideto Yamasaki said in an interview with The Yomiuri Shimbun that he plans for the company to have a surplus by 2028 when production of the new business jet HondaJet Echelon starts.

Since launching HondaJet in 2015, Honda Aircraft has sold about 30 aircraft a year on average worldwide and has made approximately 250 deliveries in total

The HondaJet Echelon can accommodate up to 11 people up from eight for existing HondaJet models. It also has better fuel efficiency and can fly longer distances compared to competitors’ small business jets.

The HondaJet Echelon has a range of about 4,860 kilometers — 1.7 times that of conventional small business jets — making it the first small business aircraft capable of flying across North America nonstop.

Honda Aircraft plans to acquire a U.S. certification, which proves the HondaJet Echelon’s safety, in 2028 and aims to sell 40 of the aircraft annually.

The aircraft manufacturer plans to increase sales using both conventional aircraft that cost about $7 million (¥1 billion) each and the Echelon. Yamasaki said Honda Aircraft will also increase the number of employees from 1,000 to 1,500 by 2028.

Yamasaki said the company also plans to focus on sales of used aircraft to broaden the base of small business jet users.

Honda Aircraft has been losing money since the company was established in 2006. Its sales volume declined from 2022 to 2023, mainly due to a global shortage of semiconductors amid the COVID-19 pandemic. Yamasaki expects Echelon to be a “game changer.”

Honda Aircraft’s competitors include Textron Aviation Inc., a U.S. company that has Cessna, a well-known brand in Japan, as an affiliated company.

“The technology we have developed as an automobile company will be an advantage for us,” Yamasaki said, showing his intention to differentiate Honda Aircraft models from its competitors by focusing on comfort and other features.

 

Entering new market

In recent years, global sales of business jets often used by company executives and wealthy individuals have stayed steady at around 700 a year. About 800 business jets were sold in 2019, but sales have been sluggish partly because of travel restrictions imposed in various countries during the pandemic.

HondaJet enjoys a large share, or about 40%, of the market for very light jets that can accommodate four to eight people.

However, the annual sales volume of the very light jet market is about 60, which is less than 10% of the entire business jet market.

As the annual sales of light jets, which can accommodate about 10 people, is around 170, Honda Aircraft aims to increase its sales by entering the market with the HondaJet Echelon.

Honda Aircraft plans to invest $55.7 million (¥8 billion) to develop the Echelon.

“We would like to emphasize the Echelon’s advantage in terms of high fuel efficiency and market it to those who are also interested in decarbonization,” Yamasaki said.
 
 

Japan’s exports rose 7.8% in February from a year earlier on strong shipments of cars and electrical machinery, the government said Thursday.

Exports in February totaled 8.2 trillion yen ($55 billion), marking the third straight month of growth, according to preliminary customs data.
The report showed the trade deficit sank by more than half on-year to 379 billion yen ($2.5 billion), marking the second straight month of a deficit.

Exports to China rose just 2.5% and those to all of Asia edged 2.3% higher on-year, suggesting that demand has moderated. Exports to the United States rose 18% and exports to the EU were up almost 16%.

The picture for imports was mixed, with China supplying 1.7 trillion yen ($236 billion), a nearly 17% annual increase that more than doubled Japan's deficit with its giant neighbor.

In all, imports edged up 0.5%, totaling nearly 9 trillion yen ($60 billion), as prices for key commodities such as coal and liquefied natural gas fell.

The strength in exports come as good news, coming a day after the Bank of Japan raised its key interest rate for the first time in 17 years, no longer setting it at below zero. The central bank has promised to still keep lending easy as it gauges various signs for how growth holds up.

One positive recently is a solid rebound in tourism, which counts statistically as exports, with recent data showing that visitor numbers have exceeded those before the COVID-19 pandemic. Japan restricted entry into the country during the pandemic.

Exports have remained relatively strong even as Japan’s economy has slowed, hitting a record high of just over 100 trillion yen ($670 billion) in 2023.

Japan is now the world's fourth largest economy, behind Germany.
 
 

Manpower Minister Ida Fauziyah met with Japanese Ambassador to Indonesia, Yasushi Masaki, here on Tuesday to discuss the strengthening of cooperation between the two countries, especially in the field of labor.

During the meeting, Fauziyah expressed the hope for stronger cooperation and extended her wishes to Masaki on his deputation as the Japanese Ambassador Extraordinary and Plenipotentiary to Indonesia.

Fauziyah said that Japan, which has enjoyed diplomatic relations with Indonesia for 65 years, is a strategic partner for Indonesia in several sectors, including labor.

"More than 100 thousand participants have been sent to Japan under the apprenticeship cooperation program that has been established for 30 years," she highlighted.

She noted that in addition to the training program, the labor cooperation has covered the placement of Indonesian migrant workers (PMI) in Japan, the development of labor services and the assignment of Japan International Cooperation Agency (JICA) Labor Advisors, and human resource development at the Ministry of Manpower.

Fauziyah said that 16 batches of Indonesian workers were placed as nurses and caregivers in Japan in the period from 2008 to 2023 under the Indonesia-Japan Economic Partnership Agreement (IJEPA).

"The total number of placements is 754 nurses and 3,196 caregivers," she informed.

Meanwhile, Ambassador Masaki said that Japan is very open to skilled and highly skilled people from Indonesia.

In addition to the manufacturing and caregiver sectors, Japan is continuing to open various sectors such as agriculture, fisheries, banking, food and beverages, and property development for Indonesian migrants.

Earlier, the Ministry of Manpower said that it is continuing to strengthen the apprenticeship program as one of the instruments to strengthen the competence of Indonesian human resources.

Last year, Indonesia and Japan's International Manpower (IM) renewed the memorandum of understanding (MoU) on the apprenticeship program.
 

 Japan welcomed 2.79 million visitors in February, a record for the month and the most for any month since the COVID-19 pandemic began, boosted by travel during the Lunar New Year holidays.

The number of foreign visitors for business and leisure was up from 2.69 million in January, data from the Japan National Tourism Organization (JNTO) showed on Tuesday, March 19.

Arrivals in February were 7.1% higher than in 2019 when the Lunar New Year also fell in the second month of the year rather than the first. For all of 2019, Japan welcomed a record 31.9 million visitors before the pandemic struck.

Tourism to Japan all but stopped for more than two years during the pandemic. Since then, the industry has received a major boost from a weak yen that has made Japan a bargain destination for foreign travelers.

Current account data in January showed a record gain attributable to inbound tourism, illustrating the sector's widening role in the economy. Visitors spent more than 5 trillion yen ($33.3 billion) in the country last year for the first time, exceeding the government's goal.

Travelers from 19 of 23 countries and territories, including South Korea and the United States, set records for February, the JNTO said.

Japan is the top destination for travelers from 12 countries on Agoda's online booking platform, said Agoda Chief Executive Omri Morgenshtern.

"Demand for Japan is very strong," Morgenshtern said. "I assume, overall, you will see 2024 in the 2019 levels or slightly above."
 
 

The head of Japan's biggest business lobby on Sunday expressed hope that the government of Prime Minister Fumio Kishida will take necessary measures to fully combat the country's decades-long deflation.

In a speech at the annual convention of Kishida's ruling Liberal Democratic Party, Masakazu Tokura, chairman of the Japan Business Federation known as Keidanren, said the nation's economy has been on an upward trend on the back of robust wage growth.

"It is important for the country to work as one to make this year a historic turning point in completely overcoming deflation that has continued for 30 years," Tokura said, pledging to cooperate with the government and the LDP to shore up the business sector.

His remarks came days after the Japanese Trade Union Confederation said in a preliminary survey that domestic companies agreed to wage increases averaging 5.28 percent at this year's negotiations with labor unions, marking the sharpest rise in more than 30 years.

Earlier this month, Kishida's government began considering whether to declare an official end to deflation, or continuously falling prices, given the recent expansion of profits at Japanese companies, sources familiar with the matter said.

In 2023, Japan's core consumer prices, excluding volatile fresh food items, surged 3.1 percent, registering the fastest increase in 41 years.

The Bank of Japan, meanwhile, is expected to end negative interest rates at its two-day monetary policy meeting through Tuesday, sources close to the matter said, in what would be the first hike in 17 years and a departure from years of unorthodox easing.



© KYODO
 
 

Taiwan's semiconductor giant, TSMC, is reportedly considering establishing advanced chip packaging capacity in Japan, marking a potentially significant move that could further energise Japan's semiconductor industry.

According to Reuters, sources familiar with the matter disclosed that discussions are in the early stages, preferring anonymity due to the confidential nature of the information.

One source indicated that TSMC is contemplating introducing its chip-on-wafer-on-substrate (CoWoS) packaging technology to Japan, a sophisticated process known for stacking chips atop each other, enhancing processing capabilities, saving space, and reducing power consumption.

Presently, all of TSMC's CoWoS capacity resides in Taiwan, with no final decisions made regarding the scale or timeline of this potential investment.

The demand for advanced semiconductor packaging has witnessed a global surge, particularly driven by the proliferation of artificial intelligence applications.

Consequently, major chipmakers like TSMC, Samsung Electronics, and Intel are ramping up their packaging capacity to meet this escalating demand.

TSMC's Chief Executive, C.C. Wei, revealed earlier this year the company's plans to double its CoWoS output in 2024, with further expansions slated for 2025.

The prospective establishment of advanced packaging capacity in Japan would complement TSMC's existing operations in the country, including recent plant constructions in Kyushu and collaboration ventures with leading Japanese companies like Sony and Toyota, with total investments exceeding $20 billion.

TSMC's strategic foray into Japan aligns with the country's ambition to bolster its semiconductor industry, leveraging its strong ecosystem comprising leading materials and equipment manufacturers, growing chip fabrication investments, and a robust customer base.

An official from Japan's industry ministry expressed optimism regarding Japan's readiness to accommodate advanced packaging endeavours, highlighting the supportive environment for such initiatives.

However, analysts caution that the scale of TSMC's potential investment in Japan may be limited, as the demand for CoWoS packaging within Japan remains uncertain, with the majority of TSMC's current CoWoS customers situated in the United States.

The Japanese government's proactive stance in revitalising its semiconductor sector has attracted significant attention from global chip firms.

TSMC's ventures in Japan have been buoyed by substantial subsidies from the Japanese government, which views semiconductor development as crucial for its economic security.

This proactive approach has also lured other industry players, including Intel, which is reportedly considering establishing an advanced packaging research facility in Japan to strengthen its ties with local chip supply chain companies.

Similarly, Samsung Electronics is setting up an advanced packaging research facility in Yokohama, supported by government initiatives, and exploring partnerships with Japanese companies for materials procurement, aiming to compete effectively in high bandwidth memory chips.
 
 

Levi Strauss & Co (LS&Co) on Friday announced the reopening of its Levi’s store in Kyoto. Located in the heart of Teramachi Kyogoku shopping district and featuring Levi’s cutting-edge NextGen store format, the store is emblematic of the brand’s commitment to bringing elevated shopping experiences to the world’s most desirable locations.

The refreshed store now spans about 570 square meters across four levels, more than double that of its pre-refit size of 250.8 square meters across two floors.

The store is set to deliver the fullest expression of the Levi’s brand through an expansive product assortment including men’s and women’s apparel alongside iconic Levi’s staples such as the 501 range. 

 With self-expression continuing to be a priority for today’s shoppers, Levi’s seeks to unlock possibilities for personalization for fans of the brand. To that end, one of the Kyoto store’s highlights is the Levi’s Tailor Shop experience situated on its ground floor.

Helmed by skilled tailoring professionals, the Tailor Shop is an alteration, restoration and customization station where shoppers have the opportunity to make their Levi’s apparel truly their own through embroidery, patches, pins, fabric paneling, and more.

At the Kyoto store, shoppers will have access to a variety of materials and customization options exclusive to the location, including rare fabric from the famed Chingireya antique textile store, as well as patches designed by local illustrator Hideto Honda.
   
 At launch, Levi’s will be releasing limited edition products exclusive to the Kyoto store, including 501 jeans inspired by a pair specially customized by stylist and fashion director Akio Hasegawa, and t-shirts featuring a silk-screened 501 calligraphy print drawn by artist Ryusuke Arise.

The store itself draws inspiration from Kyoto’s unique history and culture in its décor and store design, with lanterns made by historical Kyoto-based lantern makers Kojima Shoten, as well as decor elements made with kara-kami paper from long-established local brand Karacho. 

David Hamaty, general manager for North Asia at Levi Strauss & Co, said: “As we strive to cultivate lifelong denim fans around the world, we remain committed to bringing the best and fullest expression of the Levi’s brand to their doorstep, while delivering impactful and elevated shopping experiences that resonate with them.” 

“With the Kyoto store, we’ve built a unique experience representative of the culture and history of the city. We’re also bringing to life exclusive, hyperlocal customization options that will allow shoppers to tailor their Levi’s apparel to their specific taste and expression.”

© Japan Today
 
 

Tokyo Electric Power Company Holdings Inc. said Sunday that its Fukushima No. 1 nuclear power plant has completed its fourth and final round of treated water release into the ocean for the initial year.

The tsunami-crippled nuclear plant discharged about 31,200 tons of treated water, which contains small amounts of radioactive tritium, into the ocean in the initial year as planned.

The discharge of treated water started in August 2023. About 7,800 tons of treated water was diluted with a large amount of seawater each time and discharged offshore from an undersea tunnel over a two-week period four times.

Tritium levels in seawater and fishery products measured by TEPCO and the government have been below national standards.

In the fourth round that began on Feb. 28, the discharge was suspended for over 15 hours to confirm safety on Friday when a strong earthquake struck Fukushima Prefecture, home to the nuclear plant.

In fiscal 2024, which starts next month, the nuclear plant plans to discharge a total of about 54,600 tons of treated water into the ocean by increasing the number of releases to seven.
 
 

The Bank of Japan has begun considering major changes to its monetary easing measures, including lifting the negative interest rate policy, at its policy-setting meeting next week, according to sources.

The central bank has said that it will consider whether to shift its policy course if a virtuous cycle, in which wages and prices both rise, can be expected to be realized. The environment for the policy shift now appears to be ready as data has shown that the average of wage hikes is high in this year’s shunto spring wage negotiations.

According to a tally of the first round of wage announcements, which was released Friday by the Japanese Trade Union Confederation, or Rengo, its 771 member unions have received a weighted average of 5.28% in pay hikes, up 1.48 percentage points from a year earlier. This is the first time in 33 years that the figure exceeded 5%.

The central bank has kept its short-term policy rate at minus 0.1%, while implementing a yield curve control program, under which long-term interest rates are capped around 0%. If the BOJ ends the negative rate policy, that will pave the way for its first rate hikes in 17 years since February 2007.

The central bank has taken a stance to consider whether to change its monetary policy if it becomes more certain that the price stability target of 2% will be achieved along with wage increases. BOJ Gov. Kazuo Ueda has said that one major point for the policy shift is the shunto negotiation results.

Regarding policy changes, the central bank is also expected to consider other modifications, such as changing the framework for purchasing long-term government bonds and suspending the purchase of exchange-traded funds (ETFs) in order to keep long-term interest rates at low levels.

However, some policy board members have been cautious about the lifting of the negative rate policy at the upcoming policy-setting meeting. If the policy board concludes that information and data are not sufficient, the BOJ may postpone its consideration of the policy shift until it meets on April 25-26.
 
 

Japanese auto giants Nissan and Honda said Friday they had agreed to explore a strategic partnership in electric vehicles and other areas.

Analysts said the move was aimed at catching up with Chinese rivals who have stolen a march in EVs while Japanese firms have lost ground by focusing more on hybrid vehicles.

"To further accelerate efforts toward carbon neutrality and zero traffic-accident fatalities, it will be essential to strengthen environmental and electrification technologies as well as software development," a joint statement said.

"The two companies have reached the understanding based on the belief that it is necessary to combine their strengths and explore the possibility of future collaboration," it added.

The scope of the feasibility study includes automotive software platforms, core components related to EVs, and complementary products, they said.

"We are not competing only with the traditional car makers, but also with new players. These emerging brands with innovative products and new business models are making inroads into the auto market and are trying to gain dominance by capitalising on their overwhelming price competitiveness and amazing speed," Nissan chief executive Makoto Uchida told reporters.

"We cannot win the competition as long as we stick to conventional wisdom and traditional approach," he said.

Honda director Toshihiro Mibe said that there was a "once-in-a-century transformation in the automotive industry".

"Our study criteria will be whether the synergy of the technologies and knowledge that our companies have cultivated will enable us to become industry leaders by creating new value for the automotive industry," he said.

Hybrids combine battery power and internal combustion engines and have proven enduringly popular in Japan, accounting for 40 percent of sales in 2022.

But elsewhere Japanese firms' focus on hybrids has meant that they have been left in the slow lane in meeting the growing appetite for purely electric-powered vehicles.

In 2022, just 1.7 percent of cars sold in Japan were electric in 2022, a far cry from around 15 percent in western Europe and 5.3 percent in the United States.

EVs accounted for as much as 20 percent of new cars sold in China in 2022, and the strength of Chinese auto firms helped the country overtake Japan as the world's biggest auto exporter last year.

Honda and Nissan are even considering cutting production capacity in China as sales decline, according to media reports.

"Both of the companies are not at a high-enough scale to create enough profit margins... so they are actually under pressure to find a partnership," said Chris Redl, an auto analyst in Japan.

"Even though they were very fierce rivals historically, it makes more sense for Nissan to get together with a Japanese company like Honda, rather than having these cultural wars with an alliance partner like Renault" of France, he said.



© 2024 AFP
 
 

Yonago, the largest city in western Tottori Prefecture, is a nature lover’s paradise with convenient access to Mount Daisen, the Sea of Japan and Nakaumi—the fifth-largest lake in the country.

Nakaumi’s brackish waters support a rich ecosystem that includes hundreds of species of birds. Encompassing about 28 hectares of lakeside wetlands, the Yonago Waterbird Sanctuary is the best place to observe the most famous of these birds in their natural habitat.

From Development Site to Sanctuary

In the 1960s, a plan was unveiled for reclaiming land around Nakaumi—developing lakeside areas into farmland and changing the lake’s composition from brackish to freshwater. Residents strongly opposed this plan, and their voices helped to put an end to the development and garner support for conservation.

The Yonago Waterbird Sanctuary, which opened in 1995, sits on a stretch of artificial land that was created when the reclamation project was in effect. Now, the sanctuary and Nakaumi as a whole are officially recognized as a vital wintering area for migratory birds.

The sanctuary maintains outdoor trails, a large pond and a nature center, which features floor-to-ceiling windows that look out over the water.

The nature center also provides birdwatching telescopes and educational displays and occasionally hosts special events such as craft workshops and a “first sunrise” gathering for New Year’s Day.

The sanctuary’s walking trails, meanwhile, are quiet spaces where one can be immersed in Tottori’s nature, observing the seasonal birds and a prominent view of Mount Daisen.
 
 

As the Nikkei stock index keeps soaring to record highs above the peaks marked in 1989, investing is once more drawing interest in a country that has usually preferred the safety of savings.

But unlike the stock-buying craze that drew in so many people at the height of the bubble economy more than three decades ago, most Japanese remain sidelined this time, seeing little benefit from rising share prices amid struggles to cope with higher inflation and falling real wages.

And many who are investing appear to be motivated at least in part by economic anxiety, in contrast to the heady optimism about the economy that marked the previous investing boom.

Mamiko Maruyama, a 49-year-old employee in the cosmetics industry, attends classes at Financial Academy, an investing school in Tokyo that offers seminars on asset management. She says she turned to investments in the fear that relying solely on her job might not be enough for the future.

The experience of income loss during the COVID-19 pandemic was an eye-opener about the importance of investing, she said, with the Nikkei's recent surges making her consider boosting her investments in Japanese stocks.

"Our generation was always told it was best to save diligently, but that does not help money grow," said the mother of two. "I need to invest more, because I know my salary won't increase sharply."

Rie Fujikawa, a teacher at the Tokyo-based academy, said that she has noticed more people in their 20s to 40s attending the classes over the past few years, joining the seniors who once dominated them.

She has also seen a significant increase in questions about the Nippon Individual Savings Account tax-free investment program, which was revamped this January in line with government efforts to encourage a shift from savings to investments in the equities market, she said.

Reflecting the growing interest in investment among Japanese people, 900,000 new accounts were opened at Japan's five major online brokerages in January alone, according to Tomoichiro Kubota, senior market analyst of Matsui Securities Co.

"The introduction of the new NISA program has significantly broadened the investor base, as most of those opening NISA accounts are people who had never before engaged in stock investment," he said.

Nevertheless, only 14.2 percent of NISA accounts under the so-called "growth framework" allowing investment in individual stocks had been utilized as of March 1, Kubota said, with overseas investors remaining the main driver behind the Nikkei index's recent advance over the 40,000 threshold.

"Individual investors used to be the main players in the Japanese stock market, especially during the bubble era," Kubota said. But their presence has weakened since the burst of the asset-inflated economy in the early 1990s, which was accompanied by plunging share prices, he said.

The percentage of shares held by individual investors in listed companies on the Tokyo Stock Exchange in fiscal 2022 dropped to 17.6 percent from 20.4 percent in fiscal 1990. In contrast, the proportion of shares held by foreign institutional investors surged to 30.1 percent from 4.7 percent in the same period, according to the TSE.

Underscoring the reluctance of Japanese people to invest in equities, only about 15 percent of household financial assets were held in stocks and investment trusts as of the end of March last year, far behind 51 percent in the United States and 31 percent in Europe, Bank of Japan data showed.

"The proceeds of share increases are not returned to Japanese people. In fact, personal consumption is not growing," said Masaya Sakuragawa, a professor of economics at Keio University.

Japan's household spending declined in January from a year earlier for the 11th consecutive month as salary increases failed to keep up with inflation, according to recent government data.

Growth in Japan's recent real gross domestic product has slowed significantly, far off the around real 5 percent expansion in 1989 and 1990, and it has lost its status as the world's third-largest economy to Germany.

The social atmosphere sharply contrasts with that in the late 1980s when luxury brand goods attracted robust buying and real estate prices continued to surge amid a swell of optimism about the Japanese economy.

Since then, Japan's economic landscape has changed in the face of weakening domestic demand amid an aging and shrinking population, prompting companies to restructure and hoard profits to prepare for risks of global financial crises and geopolitical issues, experts said.

"Back then, the city's atmosphere was entirely different," a 63-year-old self-employed investor said in late February near Shimbashi Station in Tokyo, recalling the atmosphere in the late 1980s at the peak of Japan's economic bubble.

"Now it seems the stock market's gains are only benefiting the wealthy while salaried workers continue to struggle," said the man, who declined to be named.

Ryo Tezuka, a 43-year-old system engineer, said that he has no plans to invest in stocks for the time being because his salary is hardly increasing and he cannot afford to make investments.

"If I were to start investing, it would be a bit further in the future," he said, adding, "I hope that the rise in stock prices will be reflected in my salary."



© KYODO
 
 

 
Japan's Consumer Affairs Agency on Tuesday ordered the Japanese arm of Mercedes-Benz AG to pay about 1.23 billion yen ($8.3 million) in fines for misrepresenting the safety features of some of its sports utility vehicles.

It was the largest administrative fine based on the country's law against unjustifiable premiums and misleading representations, according to the agency.

The payment is set at 3 percent of the sales of products or services concerned, and the automaker's vehicles come with relatively high price tags.

The agency said Mercedes-Benz catalogues made it appear that some of the GLA and GLB models were equipped with driving safety support systems when they were actually offered as options.

Mercedes-Benz Japan Co. apologized and vowed to strengthen its legal compliance in a statement released on its official website.

In December 2021, the agency ordered the company to take measures to ensure that misleading claims never happen again.
 
 

Japan posted a current account surplus of ¥438.2 billion in January against the year-before deficit of ¥2,013.6 billion, as its trade deficit halved on a halt to materials price rises, data showed Friday.

Japan logged a surplus in the current account, the broadest measure of trade and investment flows, for the 12th straight month, the Finance Ministry said in a preliminary report.

The country’s deficit in goods trade shrank to ¥1,442.7 billion from the record high of ¥3,167.4 billion marked in January last year.

Exports grew 7.6% from a year before to ¥7,340.3 billion, while imports fell 12.1% to ¥8,783 billion, chiefly reflecting a fall in imports of coal and liquefied natural gas.

In services trade, Japan logged a deficit of ¥521.1 billion. The country’s travel service trade produced a record surplus of ¥415.9 billion thanks to an increase in foreign visitors, but it was more than offset by a deficit of ¥430.7 billion in digital-related trade, reflecting payments to online ads abroad.

The country’s surplus in the primary income account, which covers dividend and interest receipts from abroad, jumped 29.6% to ¥2,851.6 billion, a record high for January. Bond interest receipts grew in line with higher interest rates overseas.
 
 

The weighted average of wage hikes requested by 3,102 member unions of the Japanese Trade Union Confederation, or Rengo, in this year’s “shunto” labor-management negotiations came to 5.85%, preliminary data showed Thursday.

It is the first time in 30 years for the average to exceed 5%, when compared with past final survey results. The 3,102 unions all use a method of negotiating wage increase per worker.

The average demanded wage increase, including pay-scale hikes and regular raises, stood at ¥17,606 as of Monday, up ¥4,268 from around the same time last year.

A total of 3,726 labor unions have already submitted their demands to management, accounting for 52.3% of the unions covered by the Rengo tally of shunto requests.

Rengo is calling for pay hike requests of at least 5% including pay-scale hikes and regular raises in the 2024 shunto.
 
 

The Bank of Japan's (BOJ) governor and one of its board members said on Thursday the economy was moving towards the central bank's 2 per cent inflation target, in comments that heightened market expectations of an imminent end to negative interest rates.

The remarks came as Japan's largest trade union group Rengo said average wage hike demand hit 5.85 per cent for this year, topping 5 per cent for the first time in 30 years and raising prospects of a broad-based pay rise that the BOJ set as a prerequisite for a stimulus exit.

BOJ board member Junko Nakagawa said the country's intensifying labour shortages were prodding more companies to resume their practice of increasing pay annually, signalling conviction that conditions for phasing out the central bank's massive stimulus were falling into place.

"We can say that prospects for the economy to achieve a positive cycle of (rising) inflation and wages are in sight," Nakagawa told business leaders in the southwestern city of Matsue.

"There are clear signs of change in how companies set wages. Japan is moving steadily towards sustainably and stably achieving our 2 per cent inflation target," she said.

The remarks came amid growing market expectations that the BOJ could exit negative interest rates this month, fuelled in part by a media report on Wednesday that at least one of its board members could call for such an action this month.

The growing momentum for a March stimulus exit lifted the yen to a one-month high against the dollar, and pushed up government bond yields, a trend that continued on Thursday.

Analysts have tipped either the March or April meetings as possible timings of the pivot. Back in mid-February, most polled by Reuters saw April as far more likely because that is when the BOJ produces fresh quarterly growth and inflation forecasts.

Nakagawa's remarks follow those of fellow BOJ board member Hajime Takata, who said last week Japan was finally seeing prospects it could durably achieve the central bank's 2 per cent inflation target.

BOJ governor Kazuo Ueda added to the hawkish chorus later on Thursday, saying the likelihood of achieving the central bank's inflation target was gradually rising.

"If we confirm that a positive wage-inflation cycle is strengthening, we can examine modifying our massive monetary easing measures," he told parliament.

Ueda also elaborated on how the BOJ could guide policy after exiting negative rates, suggesting it was actively brainstorming ways to smoothly end its prolonged ultra-easy policy.

For one, the BOJ will pay interest on reserves financial institutions park with the central bank, and use that as a tool to control short-term interest rates, Ueda said.

He also said that regardless of whether the BOJ ditches or maintains yield curve control, it will continue to buy enough long-term bonds to avoid any abrupt spike in yields.


CONSUMPTION, WAGES KEY


Despite recent weak signs in the economy, BOJ policymakers have signalled their intention to move ahead with plans to dial back stimulus.
Real wages shrank in January for the 22nd straight month but at the slowest pace in over a year, data showed on Thursday, as price pressures from rising raw material costs dissipated.

To keep inflation sustainably around 2 per cent, the BOJ guides short-term rates at -0.1 per cent and sets a 0 per cent target for the 10-year bond yield under a policy dubbed yield curve control (YCC).

Governor Ueda has said the outcome of this year's annual spring wage negotiations will be key to how soon the BOJ can phase out the monetary easing measures.

Big firms will settle their wage negotiations with unions on March 13, days before the BOJ's policy meeting on March 18-19.

While pointing to some positive signs on the wage outlook, Nakagawa said there was a risk that wages fail to rise enough and hurt household sentiment, thereby cooling consumption.

"Consumption appears weak in both real and nominal figures" she told a briefing. "It's also important to note that wage hikes, and hopes of continued wage increases, will likely underpin consumption."
 
 

"Caution: robot!" chirps the green self-driving delivery vehicle as it trundles down the street to a pork cutlet restaurant in Tokyo to pick up a meal ordered on Uber Eats.

Starting Wednesday, robot deliveries will be offered in a small area of the city by the U.S.-based food app, which hopes to eventually roll out the service more widely in Japan.

The country, facing growing labor shortages, changed traffic laws last year to allow delivery robots on public streets, and other companies including Panasonic are also trialling cute new machines to transport goods.

Uber Eats' boxy robots have square headlights for eyes and three wheels on each side to navigate kerbs as they calculate routes on their own, using sensors to avoid pedestrians and other obstacles.

Moving at up to 5.4 kilometers an hour and with flashing lights around the lid, there's a human operator on standby in case of trouble.

Like self-driving delivery services launched by the company in North America, the Tokyo robots will be limited in scope at first, said Uber Eats executive Alvin Oo.

 

App users must wait outside for the robot to arrive, but one day it could come to their door, he told AFP on Tuesday.

"Going all the way to the office floor, to the exact apartment... could be useful in somewhere like high-rise Tokyo," said Oo, market operations director at Uber Eats Japan.

The service could also one day come to rural areas, where many residents are elderly and drivers are scarce, he added.

Current drivers "do not need to worry", Oo said, because "even in five, 10 years' time, there will always be work for the human delivery partners on the platform".

Uber Eats and similar apps faced strikes last month, and rideshare giant Uber has long been criticized for dodging minimum wage and holiday pay rules by arguing its workers are not employees but independent contractors.

 

The Uber Eats robots, developed with Mitsubishi Electric and U.S. start-up Cartken, will deliver food from just a few restaurants in the busy Nihonbashi district at first.

Users cannot choose robot delivery, and if it is selected for them they can accept or decline the offer.

At a demonstration on Tuesday, the robot nearly collided with a pedestrian, but also attracted lots of attention.

It's "so cute, so eye-catching", said passer-by Akemi Hayakawa. "I thought it might bump into people's feet, but people give way to it," the 60-year-old said.

"Japan has an aging, dwindling population, with a serious labour shortage. So this is a very good idea for Japan too."



© 2024 AFP
 
 

Core inflation in Japan's capital re-accelerated in February above the central bank's target as the effects of government fuel subsidies faded, data showed on Tuesday, a sign conditions for ending negative interest rates were falling into place.

But an index stripping away the effect of energy costs, seen as an indicator of the broader price trend, slowed, shifting the focus on whether Japan can see wage hikes strong enough to underpin consumption.

The data will be among factors the Bank of Japan (BOJ) will scrutinize ahead of its policy-setting meeting on March 18-19 in judging whether to phase out its massive stimulus program.

Core consumer price index (CPI) in Tokyo, a leading indicator of nationwide figures, rose 2.5% in February from a year earlier, matching market forecasts, data showed on Tuesday.

The rise in the core index, which strips away the effect of volatile fresh food prices, followed a 1.8% rise in January.

A separate index that excludes the effect of both fresh food and fuel costs, rose 3.1% in February from a year earlier, slowing from a 3.3% gain in January. It was the slowest annual pace of increase since February 2023.

The disinflation isn't very broad-based as it mostly reflects a slowdown in processed food inflation," Marcel Thieliant, head of Asia-Pacific at Capital Economics, said on the slowdown in the index excluding fresh food and energy.

"There's nothing in today's report that would prevent the Bank of Japan from ending negative interest rates next month."

Japan unexpectedly slipped into a recession at the end of last year with the economy shrinking an annualised 0.4% in October-December on weak corporate and household spending.

But with inflation having exceeded 2% for well over a year and prospects for bumper wage hikes heightening, many market players expect the BOJ to end its negative interest rate policy by April.

BOJ Governor Kazuo Ueda said last week that it was too early to conclude that inflation was close to sustainably meeting the central bank's 2% target. But he said the economy was recovering moderately and showing promising signs on the wage outlook.

In an effort to reflate growth and keep inflation stably at its 2% inflation target, the BOJ currently guides short-term rates at -0.1% and the 10-year government bond yield around 0%.



© Thomson Reuters 2024.
 
 

Japan will have the lowest real gross domestic product per capita among all major economies in 2060 if its low productivity growth remains roughly the same under a declining population, a government estimate showed Thursday.

Presented at the day’s meeting of the Council on Economic and Fiscal Policy, headed by Prime Minister Fumio Kishida, the estimate is part of a macroeconomic scenario drawn up by the Cabinet Office for use in discussions on priority issues in the country’s economic and fiscal policies.

Kishida said that it is necessary to take a “structural” approach in order to improve productivity, expand labor participation and raising the birthrate.

He said the government will draw up a political policy package for the next three years or so for system reforms allowing the country’s competitiveness and birthrate to improve by 2030, when the depopulation will get more serious.

The package will be included in the government’s basic economic and fiscal management guidelines due out later this year, he added.

The estimate supposes that the annual productivity growth rate will stay at 0.5%, similar to levels in recent years, and that the total fertility rate, or the number of children born per woman in her lifetime, will stand around 1.36 in 2070, against 1.33 in 2020. The Cabinet Office also hypothesizes that more elderly people will join the workforce.

The scenario envisions a long period of sluggish economic growth, forecasting that the GDP in price-adjusted real terms will grow at an average rate of 0.2% between fiscal 2025 and fiscal 2060.

Real GDP per capita, which stood at $41,000 in 2020, will be $62,000 in 2060, likely to be overtaken by Britain and France, which both had smaller per capita GDPs than Japan as of 2020.

If Japan manages to boost its productivity growth to 1.4% and its birthrate to around 1.8, the average level in the 1980s to the 1990s, and makes a significant improvement in the labor participation situation, its real GDP will grow by around 1.7% on average.

The per capita GDP will stand at $94,000, nearing the $96,000 forecast for the United States.
 
 

Asian markets have started the week on an upbeat note.
Japan’s Nikkei 225 index jumped above 40,000 points for the first time on Monday, extending a historic rally that analysts say may have much further to run.

The milestone comes just days after the stock market index set a record closing high of 39,098.68, eclipsing its previous 1989 peak.

The Nikkei index, which ended up 0.5% at 40,109.23 on Monday, has been on a tear for more than year, driven by a combination of strong corporate earnings, a weaker yen that helps exporters, and an influx of foreign investors looking for an alternative to China’s depressed markets.

“We expect Japan to be one of the top performing markets between 2023 and 2030,” said Jefferies analysts in a research report on Sunday. “The great shareholder return story in Japan has begun.”

The Nikkei has surged more than 20% this year, making it the best performer among major equity indexes in the world.

Monday’s rally follows a surge in US stocks late last week. The Nasdaq and the S&P 500 both hit new record highs on Friday, fuelled by a boom in chipmaking and artificial intelligence stocks.

Optimism regarding semiconductors boosted Taiwan’s stock market as well, with its benchmark index hitting an all-time high on Monday, led by a strong performance for shares of Taiwan Semiconductor Manufacturing Company.

The world’s largest contract chipmaker was up 5.2% at an all-time high. TSMC is the main manufacturer of AI chips for companies such as Nvidia.

Elsewhere in the region, South Korea’s Kospi gained 1.2%, while Hong Kong’s Hang Seng closed little changed.

 

Investors watch Chinese markets

Mainland Chinese stocks, meanwhile, traded cautiously higher, as investors await the upcoming annual gathering of the National People’s Congress (NPC), the country’s rubber-stamp legislature, which will draw nearly 3,000 delegates to Beijing for the next seven days.

Premier Li Qiang is set to announce China’s 2024 growth target on Tuesday and is also likely to unveil more stimulus measures to revive the sagging economy.

The Shanghai Composite Index closed up 0.4%. It has bounced back since hitting a multi-year low a month ago but has still lost 8.5% over the past year.

“[The NPC meeting] holds significant implications for the trajectory of assets in China for 2024 and beyond,” said Stephen Innes, managing partner at SPI Asset Management.

“The announcements and policies unveiled during the parliamentary session will provide crucial insights into China’s economic priorities, strategies, and potential market developments, shaping investor sentiment and asset allocation decisions domestically and globally,” he said.

Chinese policymakers face mounting challenges to boost a flagging economy, including how to stabilise the property sector, counter deflationary pressures, reverse foreign capital outflows, and save a battered stock market.

Analysts widely expect the policymakers to set this year’s growth target at around 5%.

Last week, the Communist Party’s Politburo, its top decision-making body, pledged to meet economic growth targets for 2024 by spurring domestic demand and boosting tech and innovative industries.
In 2023, China’s economy expanded 5.2%, meeting the official target.
 
 

Japan’s industrial production fell 7.5% in January from the previous month due mainly to lower automobile output, the fastest decline since May 2020 in the early days of the COVID-19 pandemic, government data showed Thursday.

The seasonally adjusted production index for the manufacturing and mining sectors stood at 97.6 against the 2020 base of 100, the industry ministry said in a preliminary report.

The ministry lowered its view on industrial production for the first time in six months, saying it has “weakened” while fluctuating indecisively. The downgrade comes as a substantial recovery is unlikely in February and March, a ministry official said.

In January, production declined in 14 of the 15 surveyed industries.
The auto sector’s output plunged 17.8%, dampened by the suspension of plants caused by heavy snow and vehicle testing scandals involving Daihatsu Motor Co. and Toyota Industries Corp., an affiliate of Toyota Motor Corp.

Production at general-purpose and business-oriented machinery makers dived 12.6% due to lower output of auto-related equipment.