WASHINGTON (Kyodo)--The Group of 20 financial chiefs expressed their solidarity on Friday with the Japanese people over the devastating March 11 earthquake and ensuing tsunami, pledging to offer any support for the crisis-hit country.
But with the disaster at the troubled Fukushima Daiichi atomic power complex continuing the G-20 officials warned that Japan's economic downturn is a downside risk to the global economy, underscoring their concern over the aftermath of the nation's worst postwar crisis.
"We expressed our solidarity with the Japanese people after the tragic events, our readiness to provide any needed cooperation, and our confidence in the resilience of the Japanese economy and financial sector," the G-20 countries said in a joint statement released after their two-day meeting in Washington.
"The whole group expressed solidarity with Japan," French Finance Minister Christine Lagarde said at a press conference as chair of the gathering, adding "We stand ready for any help that is needed" for Japan.
Even so, Japan's economy is now under strong downward pressure as the disasters have crippled the nation's manufacturing and caused nationwide supply disruptions, which are feared to affect its major trading partners including the United States and China.
Radiation leaks from the Fukushima Daiichi plant have contaminated soil and sea, dealing a heavy blow to Japan's fishery and agricultural industries with false and harmful rumors spreading worldwide.
"The global recovery is broadening and becoming more self-sustained," but "Events in some Middle-East-North African countries and in Japan have increased economic uncertainty and tensions in energy prices," the statement said.
Such words came after Japan raised the severity level of the crisis at the plant last Tuesday to 7, the maximum on an international scale, up from 5, and matching that of the 1986 Chernobyl catastrophe.
Japan's Finance Minister Yoshihiko Noda offered information to other G-20 nations on the crisis at the power station to ease their anxiety that the nuclear crisis could erode the country's economy, in turn weighing on the global economic recovery.
He also made efforts to prevent unsubstantiated rumors about radioactive contamination from marring Japan's trade with its global counterparts.
Noda reiterated at a press conference on Friday he "did not hear any objections or differences of opinions" from G-20 officials about his explanations on the disaster, but it is uncertain whether he won their understanding on the matter.
Amid growing expectations the country will issue massive new government bonds to fund measures to reconstruct quake-hit northeastern Japan and tackle the nuclear crisis, Noda also emphasized his policy of maintaining the country's fiscal discipline at the G-20 gathering.
Barring a range of problems stemming from the crisis at the Fukushima power plant, the government has estimated that the damage from the quake and tsunami that left around 28,000 people dead or missing could amount to 16 trillion to 25 trillion yen.
Noda said the government will draw up its fiscal consolidation plan by mid-year in mapping out reconstruction measures, as Japan's public debt level is approaching 200 percent of its gross domestic product, the highest among industrialized countries.
"We have to show our policy that Japan will get on a path of fiscal soundness in the medium term," he said.
The government has already promised not to issue any new bonds to craft the first in a series of extra budgets for fiscal 2011 to implement reconstruction steps.
Meanwhile, Bank of Japan Governor Masaaki Shirakawa, who attended the G-20 meeting with Noda, said the central bank "will strongly support Japan's financial markets and real economy by providing ample funds and by strengthening monetary easing."
Representing about 80 percent of the world's GDP, the G-20 groups together Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United States and the European Union.
At the gathering in Washington, the G-20 economies also agreed on a mechanism under which countries that pose potential risks to the global economy will be singled out using a set of indicators as well as other factors in an effort to prevent a future crisis by reducing global economic imbalances.
Following the agreement, seven countries among the G-20 members are to be scrutinized further as they appear to cause global imbalances, which have been blamed for exacerbating the financial turmoil, Lagarde said at a press conference after the meeting.
Japan is expected to be included in the countries that should be subject to the scrutiny, the nation's officials said, adding it is "natural" for the G-20 nations to conduct mutual assessment of large economies such as the United States and China.
The G-20 officials also continued to discuss issues such as the international monetary system and the upturn in global commodity prices.
Source: The Nikkei April 16, 2011
TOKYO (Nikkei)--The government is considering issuing special disaster bonds to pay for rebuilding the devastated northeast, to be redeemed with a newly created reconstruction tax.
The bonds would finance recovery spending out of a separate account from deficit-covering or construction bonds. The necessary legislation for both the bonds and the tax would be enacted along with a second supplementary budget.
The proposal bows to the need for fiscal discipline to maintain Japan's credibility with bond investors even as it is forced to run up more debt.
Prime Minister Naoto Kan's government and the ruling coalition aim to send a 4 trillion yen first supplementary budget to the Diet this month.
It would be followed as early as this summer by another round of spending that would begin the reconstruction effort in earnest. Fiscal spending in this and subsequent recovery budgets is expected to run as high as around 10 trillion yen. Even with cuts to key policies, such as the monthly child care subsidy, bond issuances would need to increase to pay for these outlays.
By law, construction bonds are the only type of government debt that can finance infrastructure projects. The government is considering creating a new class of debt whose use would be limited to recovery efforts, including rebuilding infrastructure, creating jobs and supporting small and midsize firms. These disaster bonds would be managed in a separate budget account to ensure transparency.
That the government is also proposing a temporary, dedicated tax to repay these bonds reflects Japan's fiscal straits. With bond issuances already set to exceed tax income in fiscal 2011, the government is looking to head off a spike in long-term interest rates.
Ideas for the new levy include an across-the-board income tax increase and a consumption tax hike. To protect the economy, the higher rates would take effect after two to three years, when recovery-related demand peaks, and last three to five years.
The ruling coalition will need opposition support to enact these changes -- no easy task at a time when both sides have yet to agree on authorization to issue deficit-covering bonds for the current fiscal year.
Source: The Nikkei April 16 morning edition
TOKYO (Nikkei)--Supermarket and convenience store operators and other businesses selling daily necessities expect sales and operating profit to escape last month's disaster largely unscathed, earnings forecasts for the fiscal year to February 2012 show.
According to a tally of the 68 big retailers with February book-closings that had announced results by Thursday, their combined sales would inch down just 2% in the current year, while operating profit is seen up 1%. Because of extraordinary losses associated with the earthquake, the companies anticipate net profit dropping by around 20%. But the relatively strong outlooks for operating earnings mean these losses will be absorbed by core retail operations to some extent.
Even so, the extent of the fallout from electricity shortages is unclear, as is the degree to which consumer confidence will recover. As a result, there is a chance the retailers could cut their earnings outlooks.
Aeon Co. (8267) said Thursday it expects a 33% drop in net profit for the current year due to an extraordinary loss of 30 billion yen on damage from the earthquake and tsunami. Yet the company expects both operating profit and sales to increase, by 1.5% to 175 billion yen and 0.1% to 5.1 trillion yen, respectively.
Aeon temporarily closed 282 stores in the Tohoku region after the quake, but reopened the bulk of them by the end of March. Demand for food and drinks is seen growing at its supermarkets, with same-store sales up for April.
"Sales are currently strong, so we'll be able to meet our targets," President Motoya Okada said. "In the second half, we anticipate full-fledged demand from economic reconstruction."
Convenience store operator Lawson Inc. (2651) will book a 5 billion yen extraordinary loss, hurting net earnings. However, it anticipates sales and operating profit climbing. Also expecting increased revenue are Seven & i Holdings Co. (3382), Shimamura Co. (8227), Nitori Holdings Co. (9843) and other sellers of daily essentials and household goods.
Many retailers are gearing up for sales to recover from the second half. "The economy is continuing a moderate recovery," Seven & i President Noritoshi Murata said. "The impact (of the March 11 disaster) on consumer spending won't be very big."
These retailers have to a great degree overhauled store opening plans and product strategies in the aftermath of the global financial crisis. Earnings will be underpinned by their efforts to slash personnel and other costs.
By contrast, operators of department stores are wary, given their reliance on big-ticket items. J.Front Retailing Co. (3086) is bracing for operating profit to tumble 30%.
In the first week after the earthquake, department stores in the Tokyo metropolitan area saw their sales drop by half. Sales in the Tokyo region "will sink 15% for the full year," warns J.Front Chairman Tsutomu Okuda.
Source: The Nikkei April 15 morning edition
TOKYO (Nikkei)--Power shortages in the wake of the Great East Japan Earthquake are having a big impact on businesses. But individuals are also starting to feel the effects of the electricity squeeze now that the government has set summer energy-reduction targets for households, whose consumption has risen over the years despite the widespread introduction of green appliances.
Yamaha Motor Co. (7272) has been flooded with inquiries from consumers about its small, gasoline-powered generators. The machines are typically bought by hospitals and local governments, partly because their prices -- 100,000 yen to 500,000 yen each -- make them costly for private use. But most of the latest inquiries are coming from people looking to prepare for power shortages this summer.
Orders have soared by 600-700% since the disaster, driven also by people in disaster-hit areas. But the machines cannot be found at do-it-yourself stores or at Yamaha sales agents, as parts suppliers have been damaged by the disaster and are thus unable to boost production.
Head for the hills
Meanwhile, property agents in Karuizawa, Nagano Prefecture, are witnessing an increase in inquiries about short-term leases of villas -- contracts are up by about 20% from the usual level -- as the mountain resort town is close to the Tokyo metropolitan area and receives its power from Chubu Electric Power Co. (9502), which has not been affected by the disaster.
Inquiries by families with ailing elderly members are especially numerous, according to a major local agent.
The government has told large companies to cut their power usage by 25% during the peak summer demand period. It also wants households to lower consumption by 15-20%. Spooked by the sudden call for austerity, consumers are quickly adopting self-defense measures.
The use of power at households has continued to grow over the years. In the area supplied by Tokyo Electric Power Co. (9501), whose Fukushima Daiichi nuclear power plant was ravaged by the earthquake and tsunami, households consumed 60% more power in fiscal 2009 than in fiscal 1990. With usage per household rising about 14% over that period, households now account for more than 30% of total power consumption.
Given the large, and growing, slice of the power-consumption pie held by households, their cooperation is a must in dealing with power shortages.
More gadgets, more energy
The average number of air conditioners per household over that same period increased from 1.27 to 2.63, while the number of PCs rose from 0.13 to 1.18. Though home appliances have become more energy-efficient over the years, households have introduced machines that were not used before, such as dish washers and heated toilet seats. Furthermore, the number of households has risen due to increases in people living alone and in nuclear families.
Nationwide efforts to save electricity could have a huge impact on people's lives this summer.
Shintaro Ishihara, who on Sunday was elected to his fourth term as governor of Tokyo, said, "We can live without vending machines." Already, most drink vending machines have had their lights turned off, and a vending machine operator affiliated with East Japan Railway Co. (9020) has stopped operating new machines with large touch panels.
Masayuki Matsumoto, president of Japan Broadcasting Corp., indicated that the public broadcaster, known as NHK, will consider not broadcasting the popular national high-school baseball championship tournament this summer.
Convenience stores and supermarkets are also bracing for power shortages. SugawaraReizo Co., a maker of refrigerants in Sakata, Yamagata Prefecture, receives around 20 inquiries a day from such retailers seeking as many as 100,000 units to keep temperatures low for ice cream and frozen food shelves.
Using less juice
Masahiko Matsukata, a professor at Waseda University, called a cut of 15-20% in household energy consumption "a high hurdle but not impossible."
According to the Institute of Energy Economics, Japan, if households in areas whose power is supplied by Tepco lowering the preset temperature of their air conditioners by 1 C in the afternoon, power usage will be cut by 10%, equivalent to a savings of 640,000kw. In addition, the institute says 380,000kw can be saved if TVs, video players and other home appliances are unplugged when not in use to eliminate standby power usage.
Other measures households can take include doing the washing and cleaning in the morning or evening and replacing old refrigerators with new, efficient models.
Clear measures needed
Large-scale blackouts may be unavoidable if power-saving efforts fail this summer. While various countermeasures are being studied, such as reintroducing a subsidy program to encourage purchases of green consumer electronics and hiking summer power bills, it will be the efforts made by each individual consumer that hold the key to clearing the reduction target.
To motivate people and enlist their cooperation in this effort, the government needs to clearly describe what steps people can take and what results those steps will achieve.
Source: The Nikkei April 13 morning edition
TOKYO (Nikkei)--Nishikawa Sangyo Co., a major bedding maker, has opened a unique store that lets customers order custom-made pillows with sweet themes.
Pillowy Cafe offers whimsical pillows shaped like doughnuts, and their stuffings are named for sweets. Urethane foam is called "marshmallow," for example, and buckwheat husks "rusk." There are five other "ingredients" to choose from to determine the pillow's firmness. There are also six color variations for pillow covers, and five for the lining. More than 1,000 combinations are possible, said a Nishikawa Sangyo official.
A custom-made pillow sells for 7,980-11,550 yen, and experts are on hand to give customers just what they are looking for.
Pillowy Cafe will be open in Marui Group Co.'s (8252) Shinjuku outlet through June 15. The temporary store is popular, especially among women in their late 20s and early 30s who are keen on a good night's sleep. With sales running 50% higher than expected, Nishikawa Sangyo is thinking of opening a permanent pillow shop.
Source: The Nikkei April 12 morning edition
TOKYO (Nikkei)--Men's suit retailer Aoki Inc., a wholly owned unit of Aoki Holdings Inc. (8214), will in mid-May begin selling a suit designed to keep the wearer cool in the summer.
The company says the Premium Air Cool Suit keeps the temperature under the fabric as much as 10 C cooler than conventional suits. Aoki developed the fabric with researchers at the Textile Science and Technology department of Shinshu University. The garment uses special solvents that block infrared and ultraviolet rays, preventing heat from penetrating the fabric.
The suit uses elastic fabrics for greater comfort and mobility. It comes at three price points for men -- 53,000 yen, 59,000 yen and 69,000 yen -- and a version for women will be available for 29,800 yen.
The firm targets combined sales of 60,000 suits.
For the spring and summer Cool Biz season, a government initiative that encourages workers to dress lightly so that companies use less air conditioning, the firm is offering roughly 1.7 million products, including suits, jackets and business shirts. It targets total sales of about 10 billion yen.
The company will also introduce such new items as the AOKI Cool Shirt, to hit shelves in late April, and an odor-fighting underwear product called Deodorant Dry, coming in mid-May.
Source: The Nikkei Marketing Journal April 13 edition
TOKYO (Nikkei)--Casual clothing chain operator Uniqlo Co. will position apparel that offers protection from ultraviolet rays as a core segment of its women's wear line, targeting a sixfold increase in sales of the products.
Since last year, the Fast Retailing Co. (9983) unit has roughly doubled its lineup of UV-blocking apparel for the spring and summer seasons. Offerings include cardigans, shirts and shawls priced between 1,000 yen and 2,990 yen.
These products use threads and dyes that contain materials capable of absorbing or blocking UV rays. They can reduce UV exposure by 90%, according to the company.
Cosmetics and sportswear with UV-blocking features tend to be far more common than daily apparel offering sun protection. Anticipating an increase in demand, Uniqlo hopes to nurture the UV-protection apparel into hit products alongside its line of highly popular Sarafine T-shirts, tank tops and camisoles.
Source: The Nikkei April 14 morning edition
TOKYO (Nikkei)--Destruction to farm products and agricultural facilities in five earthquake-ravaged prefectures amounts to at least 850 billion yen, according to calculations by The Nikkei.
Damage to irrigation and other agricultural facilities amounted to 810 billion yen in Iwate, Miyagi, Fukushima, Ibaraki and Chiba prefectures. Pumps and pipes that take water to rice paddies as well as drainage systems were destroyed by the tsunami and soil liquefaction. Grain warehouses and rice planters were wiped out.
Damage to crops and other products tops 40 billion yen, the equivalent of 3% of annual production in the five prefectures.
Rice accounts for 83% of the damage to farm products. In Miyagi Prefecture, the Sendai Plain was battered by huge waves. Twelve percent of the prefecture's rice fields, the equivalent of 12,700 hectares, was inundated.
"Drainage equipment is down and we can't replace water to even extract salt," lamented a Miyagi Prefecture agriculture official. "Crop planting this year will be tough."
In Fukushima Prefecture, rice planting will likely be restricted in the current evacuation zone around the crippled nuclear plant, and in areas where residents have been asked to evacuate within one month. Farmers are also being asked not to plant in the zone where residents have been asked to prepare for future evacuation. The three zones are estimated to have 13,000 hectares of rice paddies, accounting for more than 10% of the prefecture's total.
Meanwhile, the tsunami and shipment restrictions have had a huge effect on fruits and vegetables. In Iwate and Miyagi prefectures, the tsunami washed away production facilities for strawberries, cucumbers and tomatoes.
Restrictions remain on vegetables from Fukushima, Ibaraki and Chiba prefectures after high levels of radiation exceeding Japanese standards were detected.
Calculations of product damage were based on responses given by the prefectures and local agricultural cooperatives as well as Agriculture Ministry documents. Damage figures for facilities were also based on additional surveys.
Source:The Nikkei April 15 morning edition
The Office of Commercial Affairs, Royal Thai Embassy in Tokyo, Japan
Source : http://www.depthai.go.th