TOKYO (Nikkei)--The Ministry of Economy, Trade and Industry and the Ministry of Environment are divided over whether or not to introduce mandatory emissions caps to reduce global warming gases.
On Monday, an advisory council to the Minister of Economy held a subgroup meeting on the environment, calling on industry to make voluntary efforts to cut carbon dioxide emissions after the Kyoto Protocol expires in 2013. Opposing a government-mandated cap-and-trade system, it proposed a looser framework in which each industry would set realistic targets for government inspections and evaluations.
The meeting participants agreed that enforcing a cap-and-trade system would drive up market prices of emissions permits, exacerbating the corporate burden.
By contrast, the Ministry of Environment believes that unless emissions caps are placed on each company, Japan will not be able to achieve a nationwide decrease. It therefore seeks to establish individual emissions limits on large buildings and factories. Furthermore, a ministry analysis shows that trading of CO2 credits would actually help businesses meet their targets at low cost.
Source: The Nikkei Sept. 14
TOKYO (NQN)--The industrial production index dropped 0.2% from June to 94.8 in July (2005=100), downgraded from a 0.3% rise to 95.3 on a preliminary basis, the Ministry of Economy, Trade and Industry said Tuesday. The figure fell for the second straight month. The index of manufacturing capacity utilization slid 0.3% to 89.1, while the capacity index rose 0.1% to 107.7.
Source: The Nikkei, September 14, 2010
TOKYO (Nikkei)--Japanese authorities continued to heavily unload the yen in the London and New York markets Wednesday, with the total amount seen exceeding 2 trillion yen -- the largest single-day yen-selling intervention on record.
Japanese authorities sporadically intervened in the New York market to speed the yen's slide, according to sources familiar with the matter. These actions helped weaken the currency to the upper-85 yen level against the dollar in overseas trading while spurring a decline against the euro.
The government and Bank of Japan carried out their first currency market intervention in six and a half years during Tokyo trading hours. They are expected to continue these efforts in the days to come in a bid to tamp down the yen's strength against the dollar.
Speculation that other Asian governments could follow suit weakened their currencies against the dollar as well.
Japan is believed to be relying on commercial banks and other financial institutions to carry out the yen-selling abroad instead of asking overseas central banks to do so on its behalf, given the unilateral nature of the latest intervention. The daily record for an intervention by Japan stands at around 2.6 trillion yen for operations conducted in April 1998. But this involved yen purchases against the dollar to prevent a sharp weakening of the Japanese currency.
The government and the BOJ conducted yen-selling interventions topping 1 trillion yen a day on several occasions between 2000 and 2002 to cool the yen, which had been heating up on mounting expectations for domestic economic growth.
Source: The Nikkei Sept. 16
TOKYO, NAGOYA (Nikkei)--Japanese restaurant operators are increasingly going global, hoping to cash in on growth potential in overseas markets. Saizeriya Co.(7581), operator of the casual Italian restaurant chain, will open 40-50 outlets overseas, mainly in China, in the business year ending August 2011. By next August, it expects to have about 120 restaurants overseas, compared to 27 a year earlier. Domestically, Saizeriya plans a net increase of 40 outlets, meaning it will open more stores overseas than in Japan over the course of a year for the first time.
Curry restaurant chain Ichibanya Co. (7630) is expanding in China, South Korea, Thailand and the U.S. The company plans to open about 200 stores overseas through 2015, predicting it will open more new outlets overseas than in Japan over the period.Yoshinoya Holdings Co. (9861) will open 91 Yoshinoya beef-bowl restaurants overseas in the year ending February 2011, 60% more than it plans for Japan.
As of the end of August, Yoshinoya operated 1,178 stores in Japan and 434 overseas. With a plan to open 1,000 outlets in China and 300-400 in Southeast Asia over the next 10 years, it will eventually have more restaurants overseas than in Japan.
According to the Foodservice Industry Research Institute, the domestic restaurant market fell below 24 trillion yen in 2009, compared to a peak of about 29 trillion yen in 1997. On the other hand, China's restaurant market is expanding at a double-digit pace. In 2008, the market exceeded 1.5 trillion yuan (19.5 trillion yen). The Japanese restaurant industry hopes to take a bite out of that growing pie.
Source:The Nikkei Sept. 16
TOKYO (Nikkei)--Prime Minister Naoto Kan will form a new cabinet with the ruling Democratic Party of Japan's junior coalition partner, the People's New Party, on Friday. All incumbent cabinet ministers submitted their resignations to Kan in the morning.
Ritsuo Hosokawa, former senior vice minister of health, labor and welfare, will be promoted to minister. Banri Kaieda will assume the post of minister in charge of economic and fiscal policy. Akihiro Ohata will serve as economy, trade and industry minister.
Koichiro Gemba, who remains the chair of the DPJ's Policy Research Committee, will double as minister in charge of national policy, which will help the government and DPJ stay on the same page when formulating policies. Gemba assuming the post of national strategy minister from his former portfolio of minister in charge of civil service reform will also make it easy for the party to reflect its views in the policymaking process.
Former Transport Minister Seiji Maehara will be appointed minister of foreign affairs, succeeding Katsuya Okada, who was appointed DPJ secretary-general. Maehara is widely regarded as suitable for the post due to his role in talks on the relocation of a U.S. Marine Corps air base in Okinawa as minister in charge of Okinawa and Northern Territories affairs.
Sumio Mabuchi will be promoted to transport minister from his junior post as senior minister of land, infrastructure and transport. Keio University professor Yoshihiro Katayama, former governor of Tottori Prefecture, will be appointed minister of internal affairs and communications.
Finance Minister Yoshihiko Noda, Defense Minister Toshimi Kitazawa, Minister for Government Revitalization Renho and Minister For Postal Reform Shozaburo Jimi will stay on. Renho will double as minister in charge of civil service reform.
Source : The Nikkei Sept. 17
TOKYO (Nikkei)--The Japanese government's outstanding liabilities exceeded those of private companies in the April-June quarter, according to preliminary data the Bank of Japan released Friday. This was the first time government liabilities have surpassed those of the private sector since 1997, when the central bank began compiling quarterly data. While the government continued to increase bond issuance, fund demand at private companies for capital spending and other investment was sluggish.
The aggregate financial liabilities at the central government, local governments and social security funds climbed 3.3% from three months earlier to 1,035.2 trillion yen in the April-June quarter, larger than those of nonfinancial companies, which fell 7.1% to 1,000.3 trillion yen.
Source : The Nikkei September 17, 2010
TOKYO (Nikkei)--While Tokyo's intervention to weaken its currency against the greenback garners all the attention, the yen's continued strength over other Asian currencies is causing a real headache for Japanese businesses.
Japan's intervention Wednesday pushed down the yen against the U.S. dollar, as well as major Asian currencies, but its effect on the latter had mostly worn off by Thursday. Currency traders say speculation that other Asian countries will counter Japan's move by selling their own currencies stopped the yen from sliding further.
This is not a welcome development for Japanese exporters, as their main competitors are no longer American firms but South Korean and Taiwanese companies. Compared with its highs before the collapse of Lehman Brothers two years ago, the Korean won was 46% weaker against the yen as of Thursday. The Taiwanese dollar and the Chinese yuan were also weaker, by 29% and 22%, respectively.
After a series of won-selling interventions, South Korea's foreign currency reserves increased to 274.2 billion dollars as of June 30, up 10% from its level before the global financial crisis. Efforts to tamp down the won have helped South Korean exporters tremendously. For example, Hyundai Motor Co.'s net profit for the April-June quarter was 150% higher than two years earlier, before the crisis.
By comparison, the combined net profit of the biggest three Japanese carmakers -- Toyota Motor Corp. (7203), Nissan Motor Co. (7201) and Honda Motor Co. (7267) -- was down 13% over the same period. In the semiconductor sector, Samsung Electronics Co.'s operating profit in the quarter surged by 760% from a year earlier, far outstripping Japanese rivals such as Elpida Memory Inc. (6665) and Toshiba Corp. (6502).
Reflecting better earnings, many Asian competitors have also outperformed Japanese firms in terms of stock prices.
Source:The Nikkei Sept. 17
TOKYO (Nikkei)--The average exchange rate threshold for profitability stands at 93.4 yen to the dollar, according to survey results released Friday by the Japan External Trade Organization. The yen traded at the 85 level to the dollar on that day.
Jetro conducted the Sept. 6-13 poll in response to the Japanese currency's sharp appreciation. It received responses from 329 of its 3,595 member companies, with small and midsize businesses accounting for about 60% of the total.
About three-quarters of respondents said the strong yen will hurt the earnings of their foreign operations, with more than 40% predicting a considerable worsening. The firms said the strong yen has led to weaker demand and higher costs. In addition, many smaller firms mentioned that business partners have stepped up pressure to lower prices.
Exporting to other countries, reconstructing supply chains, and scaling down domestic operations are among the steps that the companies are taking to deal with the strong yen. Some large corporations said they are expanding overseas operations.
The exchange rate threshold for profitability was 94.9 yen to the dollar for small and midsize businesses, indicating that they are more vulnerable to a strong currency than large corporations are. Against the euro, the threshold for profitability averaged 121.5 yen.
Source:The Nikkei Sept. 18
TOKYO (Nikkei)--Japanese companies received a total of 1.01 trillion yen in dividends from overseas units during the April-July period, down 18.7% on the year, suggesting that they are not eager to repatriate profits earned abroad for reinvestment at home.
At the end of fiscal 2008, the foreign units of Japanese firms held 19.6 trillion yen in internal reserves, according to the Ministry of Economy, Trade and Industry. To urge the corporate sector to bring home its overseas wealth, the government last April made 95% of dividends from foreign subsidiaries tax-free. The aim was to boost domestic capital investment and R&D to create jobs.
A METI official touted the tax revision as a powerful economic stimulus measure. The companies would receive a total of 2 trillion yen if 10% of the overseas internal reserves were repatriated, or 4 trillion yen for 20%, the official said in an online column in December 2008.
However, the move has proved disappointing so far. Japanese firms collected 3.15 trillion yen in dividends from overseas units in fiscal 2009, up 19.4% from the previous year. But the figure for the April-July period of this year fell even though foreign units are expected to generate more profits this fiscal year.
Toshiba Corp. (6502) intends to reduce dividends from overseas units this fiscal year. Its need for the dividends has weakened to the point where it has returned a portion of the payouts to foreign units, according the firm. "Many companies are keeping profits at overseas units with an eye on reinvestment abroad, including mergers and acquisitions," says Eiji Akashi, a partner at KPMG Tax Corp.
Hoya Corp. (7741) repatriated about 120 billion yen in fiscal 2009, partly to cover corporate bond redemptions. But it intends to reduce the figure to almost zero this year. Most costly capital investments will take place in Asia outside Japan and other overseas markets, according to the firm.
Japanese manufacturers have been moving production overseas. Capital investments for this fiscal year are projected to grow 35.1% abroad but rise just 6.8% in Japan, according to survey results released last month by the Development Bank of Japan.
Source:The Nikkei Sept. 20
The Office of Commercial Affairs, Royal Thai Embassy in Tokyo, Japan
Source : http://www.depthai.go.th