English language and the Japanese

English is the most commonly used global language. Japanese students begin studying English in junior high, and many start private lessons at an earlier age. Emphasis was on written English; resulting in a reluctance to speak English unless it could be done well.

Popular television programs supposed teach English, but most are entertainment-based rather than instructional.

But as more businesses recognize the need to compete globally, firms such as Mitsubishi Bank are announcing that all business will be conducted in English.

A number of recently published books are taking advantage of the Japanese increasing interest in English, both written and spoken. Author Seiichi Kanise talks about the importance of being able to "tell a story". Another author, Kyoko Yasui, tells women that they can use English to become a freelancer and take control of their careers.





http://www.yomiuri.co.jp/dy/features/culture/20090428TDY12002.htm

Japanese reinvestment

Sony may be cutting jobs, but in much of Japan, companies are investing in their businesses. It's a smart thing to do when no one else is doing it. To the Japanese, the long-term is key to decision making.

Conversely, even when times were good, American businesses were only planning from quarter to quarter (while the Japanese had a 5-7 year plan). I guess when U.S. CEO stock options and bonuses are based on quarterly results, that's what you're going to get.

Time will tell if the current Japanese investment, and innovation, allows them to pull ahead of the pack when the recession dust settles. Or perhaps they will swimming in costly overcapacity.

My bet is on the long-term view.






http://www.nytimes.com/2008/12/12/business/worldbusiness/12yen.html

Japan's stimulus clarity needed

Japan officially acknowledged that the country is in a recession; its first since 2001. The decline in gross domestic product from July-September was the second consecutive quarter of negative growth -- meeting the definition of recession.

With an export-reliant economy, the corporate earnings projections aren't very rosy. The dependence on outside demand puts a spot light on Japan's need to stimulate its domestic economy.

Japan learned a great deal of lessons from the 90s and corporations have made tremendous improvements to their balance sheets. The Daily Yomiuri reported that the impact of 2007 troublesome domestic issues were acknowledged. Jesper Koll, CEO of hedge fund Tantallon Research Japan said "the domestic economy began faltering in the summer of 2007 under higher taxes and a credit crunch in the consumer finance industry. Regulatory debacles, including a massive pension scandal and confusion over new construction regulations, added to the worsening conditions."

Japan's recession is projected to continue for a few more quarters, but not to the same level as the U.S. or Europe. If the government can inject more cash and clarity into their domestic stimulus, Japan should be able to pull ahead of their peers. But to increase domestic demand, the government needs to put cash in the hands of all its citizens and provide the leadership to empower them to spend.


Sources:
http://hosted.ap.org/dynamic/stories/A/AS_JAPAN_MARKETS_ASOL-?SITE=YOMIURI&SECTION=HOSTED_ASIA&TEMPLATE=ap_national.html

http://hosted.ap.org/dynamic/stories/A/AS_JAPAN_ECONOMY_ASOL-?SITE=YOMIURI&SECTION=HOSTED_ASIA&TEMPLATE=ap_national.html

Note: the yen closed Friday at 97.20 yen to the dollar.

Japan disappoints

It looks like Japan is playing games with how to distribute the cash benefits from their newly announced stimulus program. They had promised $20 billion to be spread among all the households in the country.

Yesterday's announcement that the government doesn't plan to set income cap limits for payout eligibility seems innocuous. But when Prime Minister Aso added that he preferred that high income earners voluntarily decline to file applications with municipal governments, I smelled trouble.

Without an income cap indicator, middle to high income earners are going to be put in a bind. Culturally, it would appear unseemly for them to show up at their municipal government office looking for a handout. This is unfortunate and will severly lessen the impact of the stimulus. This middle ground of earners are exactly the group who would spend the extra cash and impact domestic growth. The plan had meant to distribute 2 trillion yen into the economy by giving 12,000 yet to each adult and 8,000 yen to those under 18 or over 65.

And Japan could use the stimulus. Despite a large amount of cash reserves, imports have surged past exports. Imports are largely affected by oil as Japan is nearly 100% dependent on oil imports.


According to the NY Times (11/10), "exports to the United States dropped 10.9 percent and those to the European Union also fell 9 percent in September. Asia-bound shipments grew just 2.8 percent in the month. Exports alone account for about 18 percent of Japan's economy."




http://www.yomiuri.co.jp/dy/national/20081111TDY01303.htm
http://www.washingtonpost.com/wp-dyn/content/story/2008/10/30/ST2008103001994.html

It's not the bottom

Asian markets closed mixed today as they waited for new economic data from the US. That data arrived and it's not good. The unemployment rate is 6.5%, a 14 year high. Add that to terrible October retail sales reports and I'm guessing Monday is not going to dawn on the up side.

Additionally, the New York Times reported today that China's "three engines of growth - exports, investment and consumption - have all slowed down." Not only are real estate and related industries down, but due to poor orders from retailers, factories are laying off workers. The Chinese economy is still expanding, but at a rate of 5.8 percent instead of last year's 11 percent.

The Chinese government, always wary of the restless unemployed, is putting together an economic stimulus package including infrastructure, exporters and aid to real estate, stock markets.

In Japan, Toyota Motors Thursday announcement that they had cut their annual profit forecast in half made a big impact. The Nikkei fell 3.5 percent.


Sources: http://www.nytimes.com/2008/11/07/business/worldbusiness/07yuan.html
http://www.nytimes.com/2008/11/08/business/08markets.html

Japan's interest rate cut

I was surprised by Japan's central bank decision to cut their current rate of 0.5% to 0.3%.

It's true the domestic market never completely recovered from the 1990s. The rate cut was explained as a way to ease the credit crunch (small business has complained of difficulty in getting loans) and as a sign to global markets that they were a player in the world response (the US S.Korea, China, Hong Kong and Taiwan also cut rates this week). But 5% drop in the Nikkei on Friday seemed to deem the gesture ineffective, although the market had surged 10% on Thursday in anticipation of the news.

What is likely to do more for the economy is the 27 trillion yen ($275 billion) stimulus package announced Thursday by Prime Minister Aso. The credits for small businesses and a cash payback to every household should have a short term effect.

Yet Japan has to do something to respond to the rising yen, which drives their export-driven economy down. The reason I was surprised by the interest rate drop is because the rise of the yen correlates to investors borrowing yen at its perennially low interest rates* and then make a killing investing that same money in other currencies. This works when the markets are stable, but now they are divesting those other currencies and buying back yen, thus the surge in value.

Japan's banks are still sitting on a big stash of cash, but interestingly, one weak spot is their traditional practice of "cross shareholding", "where banks and their borrowers hold stakes in each other to cement ties" (WSJ 10/28/08). These holdings by Japanese banks are 3% of the stock market and were hit by the huge decline in stocks (40% since June). Yet Japanese banks are not expected to report losses and recently bought stakes in Lehman Brothers Asia and Europe, Morgan Stanley and Union BanCal Corp.

I've been hearing that the next US shoe to drop will be credit card debt. This would not be an internal Japanese problem because individuals rarely use credit cards. To function best in Japan, you need travel with cash.

* The interest rate was only raised to 0.25% in July 2006 and to 0.5% seven months later in February 2007. Today's rate cut is the first time since March 2001. There was a five year stretch when the interest rate was held at zero.


Sources: Sources: http://www.nytimes.com/2008/11/01/business/worldbusiness/01japan.html

http://hosted.ap.org/dynamic/stories/A/AS_JAPAN_CENTRAL_BANK_ASOL-?SITE=YOMIURI&SECTION=HOSTED_ASIA&TEMPLATE=ap_national.html

It's a wild ride - and the Japanese feel like buying

Yesterday, Japan's Nikkei stock index fell 1,089 points or 11.4 percent, which was the largest drop since 1987. Today it gained 235 points, or 2.78 percent. The final number was just over 8,693. A few weeks ago the index was over 12,000. Investors know that the stocks are undervalued and there's bargains to be had, but just like everywhere, they are a little scared to jump in.

Citing the need to help take the edge off high fuel prices for farmers and fishermen, the Japanese parliment approved US$18 billion (1.8 trillion yen) to partially finance an economic stimulus package. Japan had actually crafted this stimulus proposal in August before the US financial crisis hit.

The general consensus is that Japanese investors are calm, concerned, but calm. And they are feeling good because they have a lot of money. Estimates put domestic household financial assets at $15 trillion, and half of that sits in bank deposit accounts. The Japanese are among the world's biggest savers and now they are thinking about buying.

Some Japanese politicians are suggesting that Japan invest in U.S, troubled assets. Japan has a great deal of cash, and obviously, the U.S. does not. The idea was couched in the terms of helping a needy ally. Of course, they would profit by holding the assets long term, especially after scooping them up at fire sale prices.

The Daily Yomiuri reported that the private sector was already on a buying spree. "Nomura Holdings bought the Asian and European divisions of failed investment bank Lehman Brothers. Mitsubishi UFJ Financial Group completed its US$9 billion purchase of a 21 percent stake in Morgan Stanley this week."