GENEVA (Nikkei)--The Japanese government will brief the World Trade Organization on precautions taken to prevent shipments of radiation-tainted products and urge other countries to adhere to trade rules. The U.S. and China have blocked the import of some farm products from Japan, citing the radiation fallout from the Fukushima Daiichi nuclear plant.
The Japanese government contends that such measures as a blanket ban on agricultural shipments lack a scientific basis -- a prescribed condition under international trade rules. It will address the WTO's Trade Negotiations Committee on Tuesday and a food safety panel convening on Wednesday and Thursday. Radiation screening has spread to industrial goods from Japan, raising concerns that the repercussions from the nuclear crisis may hamper exports as a whole.
Source: The Nikkei March 27 edition
TOKYO (Kyodo)--A total of 16 Indonesian and Filipino nurses passed Japan's qualification examination held in February, paving the way for them to work as nurses in Japan, the health ministry said Friday.
The successful applicants account for 4 percent of all foreigners who took the exam, up about 1 percentage point from last year when three candidates qualified, according to the Health, Labor and Welfare Ministry.
Under bilateral free trade agreements concluded by Japan with Indonesia and the Philippines, nurses from the two countries are allowed to work at hospitals in Japan for three years and continue working here as nurses if they pass the exam during that period.
Kanji characters and technical Japanese terms used in the annual state exam are said to have posed a considerable hurdle for foreign applicants. The three who passed the exam in February 2010 were the first under the program to succeed.
Starting with the exam held last month, the ministry rephrased difficult expressions into easily understandable ones and added English translations to medical terms such as the names of diseases.
Source: The Nikkei March 25, 2011
TOKYO (Nikkei)--The devastating March 11 earthquake and subsequent tsunami have dealt a fatal blow to the Japanese economy, by crippling the Fukushima Daiichi nuclear power plant and forcing its operator, Tokyo Electric Power Co. (9501), to ration electricity to avoid massive blackouts.
The Nikkei asked Hiromasa Yonekura, chairman of the Japan Business Federation, or Nippon Keidanren, about how Japan should address the crisis and facilitate reconstruction. Excerpts from the interview
follow:
Q: How do you assess the government's response to the disaster?
A: There are almost no daily essentials in quake-hit areas, such as food and heating fuel, mainly due to a lack of transport. The government failed to prioritize logistics. For example, companies found it impossible to transport goods to afflicted areas because trucks could not be refueled there for return trips.
When a disaster occurs, the first thing is to bring goods to stricken areas. But the government lacked such a strategy. It needs to promptly address all of these problems by exercising much stronger leadership.
Q: How have private companies responded to the quake?
A: Businesses were equally unprepared for this crisis. The supply of components from quake-hit plants has screeched to a halt, and production and supply capacity at Japanese companies has been gravely affected. This is because companies have only tried to make their operations more economically efficient.
We must consider how to maintain our competitiveness while adopting crisis response measures for the procurement of raw materials, parts supplies and other operations.
Q: How should reconstruction work be financed?
A: The work is estimated to cost 10 trillion to 20 trillion yen. It will take a great deal of effort to compile a supplementary budget, and the government should consider issuing more government bonds on a temporary basis.
Policy pledges by the ruling Democratic Party of Japan, including toll-free expressways, income compensation for farmers and child-rearing allowances, need to be reviewed. A planned cut in the corporate tax rate will also come under scrutiny. And as a temporary measure, we should study the possibility of an income tax hike to be applied outside of quake-hit areas.
Q: How do you assess the nuclear plant accident?
A: Japan must rely on nuclear power generation (for stable energy supplies). While it will be hard to restore public trust in nuclear power plants, the causes of the accident should be thoroughly clarified and down-to-earth studies on design and safety standards should be implemented.
Q: The electricity shortage is adversely affecting manufacturing.
A: Though we will cooperate with the rolling blackouts as much as possible, it is not enough to solely save electricity. Companies need to pursue innovative ways to produce electricity. For example, businesses situated near each other can jointly obtain electric generators if they lack private power units.
Source: The Nikkei March 24 morning edition
TOKYO (Nikkei)--Japan's gross domestic product will likely shrink by 0.2% to 0.5% in fiscal 2011 as the country digs out from the devastating earthquake and tsunami that hit the northeastern region on March 11.
The Cabinet Office said Wednesday that damage to facilities owned by private-sector businesses is estimated at 9-16 trillion yen. After taking into account disruptions to distribution, the government forecasts Japan's real GDP next fiscal year will sink by 1.25 trillion yen to 2.75 trillion yen.
The Cabinet Office added that the direct damage on roads, homes and other properties and social infrastructure probably totals 16-25 trillion yen, sharply higher than the roughly 10 trillion yen toll from the Great Hanshin Earthquake.
The actual impact on the Japanese economy will likely be larger than the Cabinet Office's estimates, as they have not factored in the ripple effects from the trouble at the Fukushima Daiichi nuclear power plant, as well as rolling blackouts and dampened consumer sentiment.
"There's no doubt the blackouts will negatively affect the Japanese economy, but their impact cannot be measured at present," the Cabinet Office stated.
Source: The Nikkei March 24 morning edition
TOKYO (Nikkei)--The Group of Seven major industrialized countries have joined forces to stem the yen's spike, but such efforts need to be ongoing to have lasting effects, Eisuke Sakakibara, former vice finance minister for international affairs and now a professor at Aoyama Gakuin University, recently told The Nikkei Veritas.
The yen, which strengthened to the 76 level against the dollar last week, will settle in a 75-80 range, predicts Sakakibara, who was known as "Mr. Yen" while at the Ministry of Finance.
Excerpts from the interview follow.
Q: The G-7 finance ministers and central bankers surprised the market by conducting a coordinated intervention.
A: Seeing the tremendous destruction in Japan, U.S. and European monetary authorities -- who are normally critical of foreign exchange interventions -- perhaps could not refuse the request for a joint intervention.
The yen has bounced back to the 80 level since such efforts, making it a success for now.
Q: Is the current situation similar to 1995, when the yen surged to a record high after the Great Hanshin Earthquake?
A: I don't think so. The then-U.S. Clinton administration adopted a policy advocating a strong home currency, with Treasury Secretary Robert Rubin stating a strong dollar to be in the U.S. national interest.
Shortly after the yen set a new high in April 1995, the G-7 convened and issued a joint statement warning about excessive dollar weakness.
The U.S. strong-dollar policy matched Japan's wish for a weaker yen, paving the way for ongoing forex interventions at the time. But now, the U.S. remains mired in a post-financial-crisis economic downturn, and Treasury Secretary Timothy Geithner has not refuted a weak-dollar policy. Once the quake situation settles, the U.S. is likely to go back to its stance that markets should dictate forex market movements.
The recent intervention was one based on sympathy, so to speak. U.S. and European authorities have not rejected weak-dollar and weak-euro policies, so their views do not necessarily match those of Japan.
Q: Does this mean the impact from the coordinated intervention will be limited?
A: The success or failure of interventions depend on whether they continue. But if conducted single-handedly, they will have the reverse effect of triggering yen-buying.
The yen is not likely to weaken beyond 85 to the dollar and may instead inch back to the 70 level.
Depending on the outcomes of the nuclear crisis and unrest in the Middle East and North Africa, the yen could even test the 60 level. It should, however, settle in a range of 75-80.
Q: Why is disaster-hit Japan's currency finding buyers?
A: The first reason is a repatriation of funds among Japanese insurers and nonfinancial companies by means of selling foreign assets to secure cash on hand. Overseas financial assistance headed to Japan can also lift demand for yen. Domestic investors, on the other hand, may hold off on overseas investment, resulting in smaller outflows. And as factors of uncertainty increase, investors are buying the yen as they perceive it to be a currency of safety.
Q: How will the quake and tsunami disaster impact the domestic economy?
A: The quake and tsunami destruction should be considered separately from the nuclear crisis. The quake damage was immense, but there will be some positives for the economy when the nation moves to the rebuilding stage.
The problems at the nuclear power plant, however, are still ongoing and the negative effects will be amplified as the crisis becomes prolonged. Continued blackouts will deal an immeasurable blow to transportation and distribution, not to mention production. The stock market is likely to remain unstable until the nuclear emergency is resolved.
Q: How should reconstruction efforts proceed?
A: The government should draw up aggressive reconstruction plans by compiling a supplementary budget worth 10 trillion yen or so. The budget ought to be financed with government bond issuances. Households harbor ample financial assets and the market has the ability to absorb bonds. Another idea is to have the Bank of Japan directly buy bonds. During times like this, fiscal and financial measures are needed to underpin the Japanese Economy.
Source: The Nikkei March 22
TOKYO (Nikkei)--The difficulty in finding substitutes for key components supplied by firms in the Tohoku region is affecting not only domestic manufacturers but overseas companies as well.
The northeast region of Japan's main island, which bore the brunt of the March 11 earthquake and tsunami, is home to many parts and materials suppliers for the auto and electronics industries.
Five stricken prefectures -- Aomori, Iwate, Miyagi, Fukushima and Ibaraki -- accounted for 10.2% of Japan's electronic parts and device production and 2.7% of its transportation machinery output in 2008, according to the Ministry of Economy, Trade and Industry. The figures are up 0.1 and 0.7 point from 2002, respectively, bearing out a greater concentration of these sectors in the region.
Hitachi Automotive Systems Ltd., a major supplier of car parts and components, says it is unsure when it can restore operations at an electronic-control-unit plant in Ibaraki Prefecture, nor at a downed suspension factory in Fukushima Prefecture.
Keihin Corp. (7251), an electrical parts maker affiliated with Honda Motor Co. (7267), has not been able to bring a main factory in Miyagi Prefecture back online. Parts shortages are cascading across assembly plants in the Tokai and Kyushu regions.
Generally, inventories of export-bound parts are higher than those for domestic shipment. Yet "our inventory lasts only one week to one month at most," says an official at a major carmaker.
Unable to secure parts from Japan, General Motors Co. suspended an assembly plant in Louisiana. It announced plans to halt two European plants as well.
Canon Inc. (7751) idled its main digital camera plant in Oita Prefecture on March 16, citing a lack of capacitors and connectors.
Electrotechno Co., a Mitsubishi Gas Chemical Co. (4182) subsidiary, plans to resume operations from early April, but only at 20-30% of pre-quake levels for the time being. The company supplies 50-60% of global demand for substrate materials used in semiconductor packaging. Taiwanese firms that use the material are growing wary.
U.S. research firm IHS iSuppli has warned that a prolonged halt in the supply of Japanese-made components will make it difficult for Apple Inc. to continue selling the iPad 2, which hit the U.S. market March 11. The tablet uses at least five core parts made in Japan, the research group says.
Source: The Nikkei March 22 morning edition
SINGAPORE (Dow Jones)--With more countries detecting radioactive contamination in food imported from Japan, efforts to prevent it spreading through the global food chain have gained a new urgency.
On Friday, Taiwan and South Korea joined the list of countries that have banned the import of food produced in the provinces worst hit by the ongoing crisis at the Fukushima nuclear plant.
Taiwan was among the first to detect mild levels of radiation in a shipment of fava beans, but decided to ban imports only after radiation was also found in a batch of imported Japanese clams, tested Thursday.
In South Korea, the Prime Minister's Office said the import of food products from Fukushima, Ibaraki, Tochigi and Gunma prefectures in Japan have been banned with immediate effect. The ban mainly involves products such as spinach, parsley, broccoli and milk.
The country's Food and Drug Administration will continue testing produce coming from Japan and will keep the public informed of its findings, the office said.
Separately, Singapore said it has found radioactive contamination in four samples of vegetables imported from Japan and has extended the import ban to food from two more Japanese prefectures.
Singapore's Agri-Food & Veterinary Authority said radioactive contamination was found in Mitsuba (Japanese wild parsley), Nanohana (rapeseed plant), Mizuna (Japanese mustard) and perilla leaf samples.
The New Zealand Ministry of Forestry and Agriculture is also testing some Japanese food items for signs of nuclear contamination.
South Korea had on Monday expanded checks to include dried and processed foods imported from Japan. Thailand has also expanded the number of items being tested and has asked traders to avoid importing fruits and vegetables from Japan's Honshu island.
Other countries which have imposed restrictions on food imports from Japan include Australia, the United Arab Emirates and the United States.
While countries are stepping up efforts to stay vigilant, the potential for danger to human life through imported food is still considered limited as these are very mild levels of radiation.
Singapore's AVA said in a statement that an adult will need to consume 3.5 kilograms of contaminated vegetables to receive a comparable level of radiation that is present in a single x-ray. An adult individual will need to consume 184 kgs of contaminated vegetables to be exposed to as much radiation as a normal human being suffers from direct sunlight and other normal sources in a year.
Moreover Japan is only a niche exporter of food and ships food products worth just around $3.0 billion a year.
Yet, fears of contaminated food may have an outsized impact on Japanese fresh-food exporters even though contamination risk is currently restricted to the prefectures of Fukushima, Ibaraki, Tochigi, Gunma, Chiba and Ehime.
If the crisis continues, it could be bad news for apple and strawberry exporters of Japan's Aomori and Miyagi prefectures and seafood and milk products exporters in general.
Despite efforts by authorities to reassure people that the potential for contamination remains limited for now, the nuclear crisis is having a psychological impact on patrons of Japanese cuisine in Asia.
"We used to get a lot of our fish and ingredients from Japan. Now we're faced with a situation where people don't want to eat food from Japan," Howard Lo, a sushi bar owner in Singapore, said on his blog.
He said sales at his restaurant have dropped by half since the tragedy struck, even though for those food items that aren't stockpiled, he has already turned to supply from non-Japanese sources.
In what could lead to further panic, two Japanese travelers were hospitalized in China with serious radiation levels after they arrived on a commercial airliner from Tokyo, AFP reported Friday.
Radiation levels that "seriously exceeded limits" were detected on the two when they arrived in the eastern city of Wuxi on Wednesday, AFP quoted China's the General Administration of Quality Supervision, Inspection and Quarantine as saying.
The two lived in areas of Japan 200 to 350 kilometers from the stricken Fukushima nuclear plant, it said.
Their clothes and luggage were disposed of, but experts said they didn't pose any danger to fellow travelers.
Source: The Nikkei 25, 2011
SINGAPORE (Dow Jones)--Japan's economy faces greater-than-expected downward pressures from the March 11 earthquake, Moody's Investors Service said Friday, warning that output may stagnate or even contract this year if reconstruction spending isn't vigorous.
Tom Byrne, Moody's lead sovereign analyst for Japan, told Dow Jones Newswires the rating agency is reexamining its forecast for 2011 and 2012 Japanese gross domestic product, but that the weaker economic outlook wouldn't "necessarily" have immediate implications for the country's credit rating.
In 2011, Japan's economy will likely perform "well below" historical trend growth of 1.5% to 2%, owing to the dampening effect of electricity shortages, supply chain disruptions and high global energy prices, he said.
"If reconstruction spending doesn't kick in vigorously, there's a risk that growth could be zero or negative this year," Byrne said in a telephone interview.
But the economy, the world's third biggest, should rebound "strongly" when reconstruction activity after the earthquake--Japan's largest on record--begins, with GDP growth in 2012 likely to be "well above" trend, he said. He added he still expected output to recover to its previous path of growth.
Moody's currently forecasts Japan will grow 1.0% in 2011 and 2.3% in 2012. It cut its outlook on the sovereign's Aa2 credit rating to negative from stable in February, a move that could signal a downgrade in coming months.
The magnitude-9.0 quake triggered a massive tsunami wave that devastated much of Japan's northeast coast, washing away entire settlements and claiming thousands of lives.
It also knocked out power supplies to Fukushima Daiichi nuclear power plant, shutting down its vital cooling systems, and resulting in radiation leakage and forced power outages to cope with the reduction in electricity supply.
Work was delayed at the No. 3 reactor Friday after three workers were exposed to highly radioactive water--10,000 times normal---in the building next to the main reactor.
Japan's nuclear power regulator also indicated Friday it may raise its assessment of the crisis at the quake-hit plant to level six, or "serious accident," after gathering data on radiation levels in surrounding regions.
On Monday, Moody's said the risks posed by Japan's earthquake, tsunami and nuclear crisis were larger than thought, and that its view on the country hinged on the swift containment of its nuclear problem. That suggested a downgrade to its sovereign rating is more likely than before.
Byrne told Dow Jones Friday its negative rating outlook reflects Moody's view that Japan's trend growth won't be sufficient to allow the government to achieve the faster pace of fiscal deficit reduction that the agency deems necessary in the longer term. Japan's total government debt load is worth nearly 200% of total annual economic output, the highest level among major industrialized countries.
"Growth will need to be bigger to allow a necessary pick-up in fiscal deficit reduction," he said.
Japan's core consumer price index slipped 0.3% on year in February, the 24th straight month of falls.
Byrne concurred that the impact of the quake was likely to result in at least temporary inflationary pressures.
But he said that effect was likely to dissipate over time, as Japan's demographics and the longer-term uncertainty of the country's economic prospects weighed on corporate investment and consumer spending.
Byrne also said he was certain the Bank of Japan was doing the right thing in providing liquidity to the markets, but that the debate surrounding whether it would be appropriate for the central bank to monetize the cost of fiscal deficit spending related to the crisis was "a bit more complicated."
"The bottom line is that... the underlying challenge is still to reinvigorate the Japanese economy," Byrne said.
-By Natasha Brereton, Dow Jones Newswires; +65-6415-4044; natasha.brereton@dowjones.com
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Source; The Nikkei March 25, 2011
TOKYO (Kyodo)--The government decided Friday to give up holding plenary sessions of its tax and social security reform panel for the time being as handling the damage caused by the devastating March 11 earthquake has become the top priority for Prime Minister Naoto Kan, government officials said.
The panel, chaired by Kan, is scheduled to compile a draft reform plan around June. Economic and fiscal policy minister Kaoru Yosano, charged with crafting the package plan on how to finance the country's swelling social security costs under the deteriorating public finances, has shown his intention not to miss the government's self-imposed deadline.
The panel will instead hold smaller meetings to hear opinions from experts. But it is widely thought that the government will miss the goal as Kan has a lot of work to do in addressing problems due to the quake and ensuing tsunami that killed thousands in northeastern Japan, crippled manufacturing and unleashed a crisis at a nuclear power plant.
Chief Cabinet Secretary Yukio Edano admitted at a press conference that the government might be forced to delay some critical decisions.
The top government spokesman was mentioning not only the reform issue but another deadline, also set around June, for Tokyo to decide whether to join talks for the Trans-Pacific Partnership, a U.S.-backed regional free trade agreement.
What to do with the ''political decisions'' regarding the reform and the trade pact must be considered in light of the unfolding extent of the damage inflicted by the natural disaster.
Yosano told reporters that preparations by the reform panel will go on. He would like to work out a social security reform plan at first in April and put together an overall draft in June.
The panel had held plenary sessions about once a week before the quake.
Source: The Nikkei March 25, 2011
The Office of Commercial Affairs, Royal Thai Embassy in Tokyo, Japan
Source : http://www.depthai.go.th