Japan Economy News & Blog

Fundraising galore, corporate bond issuances at record high in June, and government enforced inefficiency at Japan Air Lines

Ken Worsley — Thu, 02 Jul 2009 10:15:32 +0000

Corporate bond issuances by Japanese firms shot to a record 1.74 trillion yen in June, according to a report in today’s Nikkei. This figure is up 150% on May 2008, reflecting the intense amount of fundraising that is currently happening in Japan.

June’s bond issuances appear to be interesting because many are coming from non-financial institutions. Sony issued 220 billion yen in debt, while Honda’s June issuance, its first in 16 years, stood at 70 billion yen. (more…)

Japan’s core Consumer Price Index fell at fastest pace ever in May

Ken Worsley — Tue, 30 Jun 2009 13:58:11 +0000

On Friday, the Ministry of Internal Affairs and Communications announced that Japan’s consumer price index had fallen 1.1% in May. May’s figures well exceeded the 0.1% drop seen in March and April, and showed a decline for the third consecutive month.

As Japan includes energy prices as part of its core CPI, it’s always helpful to look at what the CPI looks like with energy stripped out. Here’s a breakdown of CPI categories for May: (more…)

OECD: Japan’s public pension to provide 34% of salary

Ken Worsley — Thu, 25 Jun 2009 15:40:41 +0000

According to the OECD’s “Pension at a Glance 2009″ report , Japan’s public pension system is expected to provide 33.9% of salary as pension to workers entering the workforce in 2009. This is the second lowest figure in the OECD, with only Britain trailing Japan. The OECD average for public pension payouts is 59% of salary.

The report also highlights that 22% of Japanese people over 65 had incomes below the what the OECD considers to be its poverty threshold (defined as half of median household income). The OECD average for people aged over 65 living under the poverty line is 13.3%. (more…)

Japan not banning cash any time soon

Ken Worsley — Thu, 25 Jun 2009 06:50:21 +0000

The foreign media recently seems to have pounced on a story concerning plans to ban the use of cash and push nominal interest rates down to -0.4% in an attempt to fight deflation in Japan.

It won’t happen.

While electronic cash payments will continue to grow as a proportion of transaction settlement methods, the idea of banning cash altogether is impractical. At the same time, the idea of creating negative nominal interest rates is political suicide. In such a situation, the yen itself would be essetially worthless.

To be honest, I had a lot more ideas on this topic, but the proposal seems so absurd that it’s better treated as a media oddity.

May new condo offerings in Tokyo area down 19.4%

Ken Worsley — Mon, 22 Jun 2009 15:02:51 +0000

The Real Estate Economic Institute released its report on May condo sales in the Tokyo area on June 16, but it’s been a bit busy to get a post up. At any rate, the number of new condo units put on sale in May stood at 3,538, down 19.4% from a year ago. New condo offerings have now declined for 21 consecutive months. (more…)

The Onion: US To Trade Gold Reserves For Cash Through Cash4Gold.com

Ken Worsley — Mon, 22 Jun 2009 14:39:38 +0000

This piece from The Onion is satire - at least for now - but it’s well done as usual. It’s subtle that the writers valued US gold holdings at $200 billion.

US To Trade Gold Reserves For Cash Through Cash4Gold.com

Glenn Beck on the counterfeit bonds

Ken Worsley — Sat, 20 Jun 2009 13:37:46 +0000

Glenn Beck is passionate, the only US commentator willing to discuss the subject, but doesn’t really get the issue. His guest, however, is dead on at times, while sounding like someone who doesn’t have a basic understanding of how the Treasury works at others in the video that follows. The fact is that over two weeks since the two men carrying these bonds were arrested, the truth about what they were doing has not yet been made public:

My favorite quote: “Is a dollar really worth 100 cents, or is it worth less than that?”

Dude, I think they explained that in third grade, at least at Cathoilc Schoool. Aquinas can explain it pretty easily in terms of math.

Bonds held by Japanese in Italy nearly equal to the amount of leftover TARP funds

Ken Worsley — Tue, 16 Jun 2009 15:32:49 +0000

Very little news has been reported since the initial discovery of two men with Japanese passports who were apparently trying to smuggle $134 billion worth of US Treasuries from Italy into Switzerland. The initial Kyodo report stated that on June 3rd:

[T]wo unidentified Japanese in their 50s concealed the bonds, including 249 U.S. Treasury bonds worth $500 million each, in a suitcase with a false bottom.

249 times $500 million is $124.5 billion. It has also been rumored that the men were carrying other bonds denominated at $1 billion. At any rate, the total amount reported, $134 billion ($134.5 billion in later reports), appears to be consistent. (more…)

Tuesday morning headlines: Food producers moving into China, TV sales and the Aso Cabinet

Ken Worsley — Mon, 15 Jun 2009 15:58:36 +0000

The Nikkei’s Tuesday morning edition is reporting more moves by Japanese food producers into the Chinese market. First, Maruha Nichiro intends to begin farming trout in the Philippines later this year and shipping the fish live to China. The firm is hoping for sales of around 1 billion yen within a few years. On the beer front, Kirin is now selling its brew to watering holes in Shanghai, and is hoping to sell 150,000 cases of 12 500ml bottles this year. Finally, House Foods and Ichibanya aim to increase the number of their joint-owned curry shops in China from the current 13 to to 41 by the end of March 2012. (more…)

Peter Schiff on Yosano’s bizarre comments about US Treasuries

Ken Worsley — Sat, 13 Jun 2009 13:59:42 +0000

This morning I saw a Bloomberg article with a not-so-surprising headline: Purchases of U.S. Treasuries will continue, Yosano says.

When I started reading the article, however, I thought it was reporting on a different universe. Here is part of what Yosano had to say to reporters in Tokyo prior to leaving for the G8 meeting of finance ministers in Italy: (more…)