The Office of Commercial Affairs,
Royal Thai Embassy in Tokyo, Japan
Govt May Let Foreign Firms Submit Applications In English
TOKYO (Nikkei)--The government is considering allowing overseas firms to apply for licenses and other authorization in English as part of a comprehensive strategy to attract foreign direct investment.
The specific paperwork that would be allowed to be submitted in English will be decided later and will be based on such factors as past applications by foreign companies. Information disclosures, and tax and corporate address registrations are among the procedures likely to be considered. The government also plans to bolster English-language information on ministry and agency Web sites to smooth the way for multinationals to do business in Japan.
Also included in the strategy are incentives for foreign firms in the form of tax breaks or subsidies.
The government is also considering measures to encourage hospitals to accept foreign patients.
The proposals will be submitted and approved at a government roundtable meeting to be held as soon as Monday. Measures to be adopted will be included in a government program that sets out to make Japan an Asian business center. The program will be drawn up by next summer.
Source:The Nikkei Nov.27,2010
JBIC Loan Scope May Cover Exports To Any Nation
TOKYO (Nikkei)--The government is considering allowing the Japan Bank for International Cooperation to resume extending loans to entities in developed nations -- not only developing countries -- in support of Japanese companies' exports of plants, ships and other infrastructure, The Nikkei learned Thursday.
Several years ago, the government decided to narrow the scope of JBIC operations to cover only developing nations, part of its reform of state-affiliated financial institutions aimed at shifting the role played by the public sector to the private sector.
JBIC subsequently withdrew, in principle, from operations concerning developed countries. But the government recently backtracked on the move, starting to allow JBIC to invest and extend loans when Japanese firms undertake infrastructure projects in developed nations.
Now the government is mulling further expanding the scope, letting JBIC provide loans to foreign firms and financial institutions when Japanese companies export to developed countries such products as plants, ships, aircraft and satellites.
The idea will be discussed when the government's panel on carrying out the new growth strategy meets Thursday afternoon. The government is eyeing submitting a bill during next year's ordinary Diet session to amend the law that limits JBIC operations to developing countries.
Source: The Nikkei 25,2010
Trading Houses To Boost Payouts On Robust Earnings
TOKYO (Nikkei)--With their earnings buoyed by higher resource prices, Japan's big trading companies plan to distribute more profits to stockholders by raising their payout ratios.
Sumitomo Corp. (8053) has decided to change its payout ratio from roughly 20% to 20-30% starting this fiscal year, which will wind down March 31. For the second half of fiscal 2010, the firm set its ratio at 25%, bringing its full-year figure to 23%. This marks the first increase since the company announced a clear payout policy in fiscal 2004.
"We've been looking into a plan to raise dividends from next fiscal year, but an earnings improvement made it possible to move up the hike," says Senior Managing Executive Officer Toyosaku Hamada.
Mitsui & Co. (8031) will also raise dividends this fiscal year. At the start of the fiscal year, the company set its minimum payout ratio at 20%. But the actual ratio will come to 23%, with annual dividends per share to be lifted to 40 yen, up 22 yen on the year. The company expects net profit to surge 110% to 320 billion yen for fiscal 2010. "We've become more confident in our earnings power now," says Executive Vice President Junichi Matsumoto.
Itochu Corp. (8001) plans to set a clear payout policy for fiscal 2011 and onward. Its actual payout ratio has hovered around 18%, but this will likely be boosted to more than 20% thanks to strong earnings. "Depending on earnings, we'll consider increasing dividends," even for fiscal 2010, says President Masahiro Okafuji.
Mitsubishi Corp. (8058) "will look into raising dividends if earnings fare well," says Senior Executive Vice President Ryoichi Ueda. Marubeni Corp. (8002) President Teruo Asada says: "We want to lift our payout ratio at an early date" from the current 15%.
The expansion in their operating cash flows is prompting trading houses to seek both aggressive investments and greater rewards for shareholders.
Source: The Nikkei 23,2010
Japan Inc. Steps Up Efforts To Blunt Strong Yen's Impact
TOKYO (Nikkei)--With the strong yen continuing to hurt their business, Japanese companies are increasingly taking steps that can have an immediate impact, rather than medium-term remedies such as shifting production abroad. The new measures include making more payments in foreign currencies and even turning down orders that would be paid in dollars.
IHI Corp. (7013) plans to buy more parts in Asia by expanding its procurement network. Having set up a purchasing site in India, the heavy machinery maker intends to take similar steps in Vietnam and Taiwan.
Fuji Heavy Industries Ltd. (7270), which makes Subaru cars, has begun paying some shipping fees for its vehicles in dollars instead of yen. And all of its rare-metal purchases are now paid in dollars. It is trying to limit the impact of exchange rate fluctuations by offsetting receipts in a foreign currency with payments in that currency.
One of the most popular ways to deal with a stronger yen is to move production overseas. Yet it takes years to build a new factory overseas and bring it online. With the Japanese currency up about 10 yen against the dollar since the beginning of April, companies need more quick solutions that will ease the impact on their earnings in the current year.
Sumitomo Heavy Industries Ltd. (6302) is refusing to accept orders for building new ships, a business that is mainly settled in dollars, because doing so would likely result in losses given the current dollar-yen rate. "We will not take money-losing orders just to keep our shipyards in operation," Executive Vice President Yukio Kinoshita says.
A stronger yen also hurts corporate finances by lowering the value of net assets held by overseas units. Some companies are moving to shrink such assets by absorbing surplus funds at foreign units.
Mitsui & Co. (8031) plans to increase dividends that it receives from overseas subsidiaries that will be newly added to its group earnings.
Other firms are borrowing more in foreign currencies, since having assets and liabilities in the same currency would help to limit the impact of exchange rate fluctuations. Fujikura Rubber Ltd. (5121) has doubled its dollar borrowings to 16 million dollars.
Kawasaki Kisen Kaisha Ltd. (9107) is considering borrowing dollars to cover part of its payment for new ships. Some 90% of the company's borrowings have been in yen, which carries low interest rates. But in view of a narrower interest rate gap between Japan and the U.S., it plans to lower this figure to 60-70%.
Source: The Nikkei 26,2010
Higher Global Crop Prices Lifting Wholesale Prices In Japan
TOKYO (Nikkei)--Wholesale prices of such products as sugar and cooking oil have begun climbing in Japan as a result of soaring prices for farm produce on international markets.
Dai-Nippon Meiji Sugar Co. has entered into talks with food producers and others with an eye toward raising the wholesale price for sugar by 7 yen, or 4%, on Monday, citing higher international prices. Mitsui Sugar Co. (2109) intends to increase prices Tuesday, while Ensuiko Sugar Refining Co. (2112) and Nissin Sugar Mfg. Co. (2116) plan to do so on Wednesday. Should the firms go through with these hikes, wholesale sugar prices will hit a roughly 24-year high.
Raw-sugar futures in the New York market have doubled from six months earlier, reaching their highest level in three decades. Projections of decreased production by Brazil, as well as of increased consumption in China and other emerging markets, have triggered worries over a sugar shortage.
Wholesale prices of cooking oil are also on the rise in Japan. Processing-use soybean oil has jumped about 12% on the quarter for the October-December period, up a fourth straight quarter. Expectations that soybean prices will remain high have started to affect other products, with feed producers now poised to hike prices for the January-March quarter.
And as consumption continues to slump in Japan, finished-goods manufacturers are finding themselves unable to pass on their higher costs. Although coffee prices have spiked close to a 13-year high, partly on bad weather in coffee-producing regions, an official at UCC Ueshima Coffee Co. says hiking prices would be extremely difficult.
Morinaga & Co. (2201) and other confectioners have kept retail prices for chocolate and other snacks unchanged even as cacao bean prices have climbed to their highest level in 33 years. Toyo Suisan Kaisha Ltd. (2875), which sells instant noodles in North America, says that despite higher wheat prices it will forgo price hikes, because consumption is shrinking.
But if crop prices remain in their uptrend, these manufacturers may implement effective price hikes by putting less in their packages or holding fewer bargain sales at supermarkets.
Source:The Nikkei Nov.27,2010
Apparel retailers go big, central
Spacious urban outlets adding to pressure on department stores Aoyama Trading opened this 990-sq.-meter shop in Tokyo's Shibuya Ward on Nov. 11. In the past, the firm's stores had typically been 500-660 sq. meters.
Large clothing outlets are becoming increasingly common sights around the hearts of the nation's cities, as rent declines have made it easier to profit from such stores.This new retail wave could result in even more consumers turning away from department stores' expensive options. Fast Retailing Co. plans to open 60 Uniqlo casual clothing stores in Japan in the year through August 2011, 30 of which will occupy more than 1,300 sq. meters.
The company threw open the doors to one such store last month in Osaka's Shinsaibashi district. Another will open next spring within the Daimaru department store in the city's Umeda area.
Some of the 60 new stores will be around 2,600 sq. meters in size.
Until now, Uniqlo's stores have typically been 660-820 sq. meters; This is the first time that half its new stores will surpass 1,300 sq. meters.
Though the number of store openings for the current fiscal year will be down 20% compared to the previous year, the chains' total floor space is expected to be about 650,000 sq. meters, up nearly 10%.
Seeing double
This roughly 2,640-sq.-meter Uniqlo store, opened last month in the Shinsaibashi area in Osaka, symbolizes Fast Retailing's size drive.
On Nov. 11, Aoyama Trading Co. opened two Yofuku-no-Aoyama men's clothing stores that are about twice as large as its typical outlets. One, located in Tokyo's Shibuya Ward, spans around 990. sq. meters. The other, a renovated store in Fukuoka's Tenjin area, is around 1,320 sq. meters - 40% larger than it was before.
At the end of October, Aoyama Trading had opened a new 860-sq.-meter or so store in Tokyo's Ginza neighborhood. The standard size of the company's outlets used to be 500-660 sq. meters, but that has changed. "Half the stores we will open will be large ones in city centers, occupying 825-990 sq. meters," President Osamu Aoyama said.
Another firm taking up more space is Point Inc., which sells clothing for young people. Last year, it started full-fledged openings of large outlets, dubbing the chain collect point. Many collect point stores are about 300 sq. meters, but the company is expanding on this, having launched a roughly 940-sq.-meter one in Tokyo's Shinjuku Ward on Nov. 3.
In October, Shimamura Co. opened a roughly 1,500-sq.-meter clothing store in Yokohama, beating its typical store size by about 50%.
Source: The Nikkei Weekly 22,2010
Kitchen Utensils Attracts A Lot Attention
In the midst shrinking food service market, more and more people in the age of 20s-40s enjoy cooking at home. The generation tends to spare no expense but is very concern to tools and ingredients. Their food expense out of total living expenditure is rather higher and they spend more than JPY20,000 on import pans or other functioned cooking utensils.
The kitchen utensil sales Jan.-Oct. at Shinjyuku branch store of Isetan department store increased by 10% year on year basis. At the sales space, most of the customers are in the 20s-40s. Some men visits there,too. Currently more men are involving raising children and the men are focus on tools. According to Isetan department store, Flask enameled pans for 250,000 Yen made in Europe are good sales.
According to the GfK Marketing Services Japan Ltd., a marketing company of electronics retail stores, the sales amount of ovens of this October increased by 17% from the same month the year before. . The highly-functional oven priced at over 40,000 Yen sold 2.3 times. Also JMR Japan Consumer Marketing Research Institute analyzed that the 20s-40s generation has low interest in cars but a strong interest toward daily life such as household labor and try to enjoy daily life.
According to Tomizawa Shoten Co.,Ltd.( http://www.tomizawa.co.jp/), a leading wholesaler and retailer of ingredients for sweet & bread, the bread flour is in good sales and the sales increased by 10-30% from the same month the year before. The main consumers of bread flour at the directly-managed stores and net shops are women in their age of 30s-40’s.
Source:The Nikkei Nov.26,2010
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