TOKYO (Kyodo)--The trade ministers of Japan, China and South Korea on Sunday agreed on the importance of ensuring the smooth flow of goods and people in Asia amid the aftermath of Japan's March 11 killer quake and to step up efforts to reach an agreement in ongoing negotiations for a trilateral pact to facilitate investment.
Japanese Economy, Trade and Industry Minister Banri Kaieda also called on China and South Korea in a meeting in Tokyo to allow the entry of Japanese imports based on "scientific grounds." The two countries have imposed import restrictions on Japanese food products due to radiation fears triggered by the ongoing nuclear crisis.
"We share the view that the recovery of the (quake-) stricken region as well as Japan as a whole is in the interests of all three countries," the ministers said in a joint statement issued after the trilateral meeting. They added that the maintenance of a free and open trade system will "enormously support" Japan's recovery process and secure sustainable growth of all three countries.
The gathering on Sunday was aimed at laying the groundwork for an upcoming two-day trilateral summit to be held in Tokyo from May 21, during which cooperation in ensuring disaster preparedness and safety of nuclear power generation will be high on the agenda.
At the outset of the meeting, Kaieda, who chaired the talks, thanked his two counterparts for supporting Japan's efforts to recover from the devastating quake, while stressing the importance of further enhancing economic exchanges between the three major Asian economies through trade and investment.
Prior to the trilateral meeting, Kaieda met bilaterally with his South Korean counterpart Kim Jong Hoon, who expressed hope that Japan would quickly recover from the disaster and normalize its disrupted nationwide supply chains for industrial products, as well as with Chinese Commerce Minister Chen Deming.
On the investment treaty negotiations, which started in 2007 and are believed to be at the final stage, the ministers agreed on the need to make further efforts to reach a substantive agreement "as early as possible," according to the statement.
The three countries are already bound to each other through bilateral investment treaties, but Japan is seeking a three-way accord that includes rules not stipulated in the bilateral Japan-China treaty, such as those on intellectual property protection.
They also welcomed the progress on an ongoing study involving government officials, business and academic participants to explore the possibility of signing a three-way free trade agreement, and agreed to accelerate the work.
During the series of meetings, Kaieda touched on the import restriction issue. The Japanese government is concerned by rumors about radiation contamination and is calling on other countries not to overreact to the disaster at the Fukushima Daiichi nuclear power plant by imposing what it calls "unjustifiable" import restrictions.
The Japanese government has said that it is taking every possible measure to make sure no contaminated farm products are sold at home or abroad under its "stringent criteria," but many countries have set import restrictions or conducted radiation screening of Japanese imports.
China has officially banned food and agricultural imports from Fukushima, Tokyo and 10 other prefectures in Japan, and requires items from the prefectures other than the 12 to include documents issued by the Japanese government such as certificates for radiation inspection and places of origin.
But Japan has not finished preparations to start issuing such documents to China, a farm ministry official said Friday. Sources familiar with Sino-Japanese relations have described the situation as China effectively blocking all Japan-made food and farm products.
South Korea, meanwhile, has suspended imports of spinach and some other items from Fukushima and four other prefectures nearby, and plans to ask for similar government-issued radiation safety documentation from May 1 on imports of food from the five plus eight other prefectures, according to the Japanese farm ministry.
The trade ministers' gathering is part of a series of trilateral meetings Japan is hosting this year.
About a week after the magnitude 9.0 quake, the foreign ministers of the three countries met in Kyoto and agreed to boost their cooperation in responding to disasters and securing the safety of nuclear power generation.
The three-way annual summit, which was launched in 2008, is aimed at promoting cooperation among the three major Asian economies in 13 areas including trade, energy, environment, tourism, technology, logistics, health and disaster preparedness.
Source: The Nikkei April 24, 2011
SINGAPORE (Nikkei)--A slowdown in Asian exports to Japan since last month's earthquake could inhibit the region's economic growth.
Exports from Asian markets rose 10-20% or so in 2010 on improving economic conditions in Japan. But disrupted supply chains and weakened demand since the March 11 quake have impeded the flow of goods.
Some estimates show Japan's quake denting the growth in each Asian nation's gross domestic product by 0.1 to 0.7 percentage point, raising concerns about Asia's otherwise brisk economic outlook.
Singapore's exports to Japan last month tumbled 6.9% on the year, widening from a 1.4% dip in February. Taiwan also reported that sales to Japan fell 2.5% from the year-earlier period. And shipments from Indonesia in March plummeted 25% on the month, according to a preliminary figure released by the government. By contrast, their exports to other markets remained solid.
Singaporean exports of electronic devices and parts slid a whopping 28%. If power shortages continue to disrupt industrial production in Japan, the decline may become more pronounced, says an official at Merrill Lynch.
Mizuho Securities Research & Consulting Co.'s Malaysian arm contends that if Japan's nominal GDP growth shrinks 1.5 points, Association of Southeast Asian Nations members could see a 0.43-point decline in growth as well. Malaysia could take the biggest hit, suffering a 0.7-point decline, followed by Vietnam's 0.54-point slide and Thailand's 0.45-point dip.
The same decline in Japan's economy, however, will dampen growth in the U.S. and European Union only by 0.03 point each.
Asian manufacturers that procure parts and materials from Japan also face challenges. For instance, Japanese automakers' local joint ventures in China have announced production cuts owing to stalled parts shipments from Japan.
Source: The Nikkei April 22 morning edition
TOKYO (Dow Jones)--Japanese exports declined for the first time in 16 months in March, falling 2.2% from a year earlier to Y5.866 trillion, as production was disrupted by the March 11 earthquake, the Ministry of Finance said Wednesday.
The drop was greater than the median forecast for a 2.0% fall in a poll of economists by The Nikkei and Dow Jones Newswires. In February, exports rose 9.0% from a year earlier to Y5.589 trillion.
While the data did show a fall, economists said it was not a full indication of the effect of the magnitude 9.0 quake and tsunami, which devastated northern Japan, damaged production facilities in the region and led to nationwide supply chain problems. The disaster also triggered a crisis at a nuclear power plant, causing power supply shortages.
The overall surplus fell 78.9% from a year earlier to Y196.5 billion. The result was much narrower than expectations for a Y645.40 billion surplus.
Imports rose 11.9% to Y5.670 trillion, even though crude oil import volumes declined by 6.6%. In February, imports were up 9.9% from a year earlier to Y4.935 trillion.
The figures gave a small boost to the dollar against the yen but the gains were limited with the dollar back at previous levels. At 0040 GMT the dollar was at Y82.76, compared with Y82.58 in late New York trading.
"Falls in exports have been expected ever since the earthquake, and that idea was partly behind the yen's weakness against the dollar and the euro" after late March, said one dealer at a Japanese bank.
The prospect of a sharply reduced trade surplus for Japan is expected to slow down the strength of the yen, which, despite slipping back in late March from record highs against the dollar, has remained generally strong against its major rivals. Analysts have said that repatriation demands for the yen by big Japanese exporters has been a key factor behind its steady strength.
The weaker trade figures echoed other economic indicators since the March 11 disaster.
In its monthly economic report for April, released last week, the government downgraded its assessment for the economy for the first time in six months.
A Cabinet Office official said at the time that although Japan had not fallen into a recession, the country's economic recovery has clearly stalled. The recovery "is now a thing of the past," he said.
But Economy Minister Kaoru Yosano said he hoped the impact of the disaster will be in the short term, and that the economy will begin to recover by the end of the year.
In one of the first official views of the post-quake economy, the government's Economic Watchers survey, which gauges sentiment largely among retailers and the service sector, plunged to 27.7 in March, from 48.4 in February. The 27.7 figure is the lowest since February 2009, when the index stood at 19.4.
Exports are expected to be affected by the prospect of continued electricity shortages due to the removal of supply from nuclear power plants in the region, including the Fukushima Daiichi plant, which supplied power to the Tokyo area.
Within the trade figures, exports to China were up 3.8%, while shipments to all Asian countries were flat, the ministry said. Exports to the U.S. fell 3.4%.
Source: The Nikkei April 20,2011
TOKYO (Nikkei)--The Bank of Japan is expected to downgrade its outlook for real economic growth in fiscal 2011 from 1.6% to around 0.8% in light of last month's earthquake disaster.
But the scenario under consideration in the BOJ's Outlook for Economic Activity and Prices, to be compiled at a policy board meeting Thursday, will predict a rebound starting this autumn on recovering output and reconstruction demand.
The outlook report, released in April and October of each year, presents the median growth estimate of the central bank's nine policy board members. Many of them are said to now be forecasting growth ranging between around 0.5% and roughly 1%, thereby placing the median within 0.7% and 0.9% or so.
Industrial output data for March and other figures due out the day of the meeting could also factor into members' final growth forecasts.
Growth of 0.8% would be bullish compared with the average private-sector projection of slightly more than 0.4%. The BOJ sees the domestic economy decelerating in the April-June quarter on the impact of the March 11 temblor and tsunami before improving in the July-September term.
Output and exports are expected to recover as supply chain disruptions are alleviated and reconstruction demand starts picking up momentum. And once the economy overcomes summer electricity shortages, a positive trend could emerge in the October-December quarter, paving the way for a return to steady growth in fiscal 2012.
The central bank is expected to upgrade its fiscal 2012 growth forecast from 2% to the upper half of the 2% level.
At the same time, the BOJ report is expected to emphasize the uncertainties facing the economic outlook compared with before the quake. It will likely cite such medium- to long-term risks to growth as a push by domestic firms to shift operations overseas and losses resulting from the stigma attached to Japanese products amid radiation concerns.
The bank is expected to make an ongoing commitment to a loose monetary policy, even going so far as to explore additional easing steps should the outlook for recovery grow uncertain.
In reflection of rising commodities prices, the BOJ may raise its forecast for the fiscal 2011 consumer price index from a 0.3% year-on-year rise to an increase between 0.5% and 0.7%. The CPI projection for fiscal 2012 is set to be upgraded from a 0.6% increase to a rise between 0.7% and 0.9%.
Source: The Nikkei April 25 morning edition
TOKYO (Nikkei)--The double whammy of surging materials costs and quake-induced product shortages is pushing up prices for food and daily necessities.
Average prices have increased for roughly 80% of 40 major products at supermarkets in the Tokyo metropolitan and Tohoku regions, according to a Nikkei Inc. survey, which compared pre-quake prices from Feb. 9 to March 10 with post-disaster prices from March 12 to April 10.
In the Tokyo area, prices have risen for 30 of the 40 items. Materials shortages and reduced production capacity due to plant damage have sparked a 19% uptick in prices for the traditional Japanese food of natto and a 16% jump for boxed tissues. Instant noodles, which are being snapped up as nonperishables, are up 13%. Egg prices, which usually fluctuate very little, have climbed 18% because of reduced supplies from Ibaraki Prefecture, home to many poultry farms.
And 31 products carry higher prices in the hard-hit Tohoku region. Eggs have skyrocketed 39%, while instant noodles and natto have both surged 28%. Boxes of tissues are up 15%.
Promotional expenses offered by manufacturers to wholesalers and retailers help fund in-store discounts for processed foods and everyday items. But manufacturers have curbed promotions since the quake. So "even though shipments of yogurt, natto and other products have rebounded, we can't offer discounts yet," says an official at midsize supermarket operator Inageya Co. (8182).
Upward pressure is also mounting on beer and other goods excluded from the survey. Brewers have lower supply capacities due to hobbled plants and have suspended promotions. In Tokyo, a six-pack of Asahi Breweries Ltd.'s (2502) Super Dry beer, which sold for 1,098 yen before the quake, is going for 1,180 yen at some places.
Used-car prices are also rising. Usually prices tumble in April after the March sales peak, but this year small cars and hybrids are trending upward. Since the start of the year, prices for Toyota Motor Corp.'s (7203) Prius hybrid have increased 120,000 yen, while Suzuki Motor Corp.'s (7269) Alto minivehicle is up 60,000 yen, according to major used-car retailer Gulliver International Co. (7599).
Lower new-car sales mean fewer autos for the used market, and demand is growing in the disaster zone because secondhand offerings seem cheaper. Small cars are popular due to the high price of gasoline, Gulliver notes.
The average price for regular gas hit 152.2 yen per liter as of Monday, up 6.7 yen from March 7, according to the Oil Information Center.
Source: The Nikkei April 22 morning edition
TOKYO (Nikkei)--The Tohoku disaster is forcing the government to put aside less critical issues, but the Trans-Pacific Partnership should not be one of them. The nascent trade pact could play a crucial part in Japan's reconstruction.
The modern Japanese economy was built on free trade, and the country will continue to rely on imports and exports for its well-being. To rebuild, Japan needs to deepen its ties with other countries.
The earthquake and tsunami on March 11, and the ensuing nuclear crisis, have dealt a double blow to Japan's exports. Power shortages have slowed production in vital industries, while fears of radiation have raised doubts about the safety of Japanese products among buyers abroad.
On top of that, overseas companies are reluctant to invest in Japan and foreigners hesitate even to set foot in the country. If nothing is done, Japan could fall from the ranks of major trading nations.
With Japanese manufacturers of components and materials reeling from the quake, South Korean firms are chomping at the bit to expand their sales to Western and Chinese companies.
Playing catch-up
South Korea has already concluded negotiations on free trade agreements with the U.S. and the European Union. After the pacts are ratified, South Korean companies will enjoy lower tariffs in those important markets than their Japanese rivals. Japan must not let its exports wither; our debt-laden country needs funds for its reconstruction.
Before the quake, the government planned to decide by June whether to join the TPP talks, but its investigation of the agreement was halted by the disaster. Japan should now redouble its efforts to join the negotiations. The Trans-Pacific framework would bring the same benefits as a Japan-U.S. FTA. And a trade pact with the U.S. would make it easier for Japan to push for a similar treaty with the EU.
Opponents of the TPP argue the pact will hurt farmers, including those hit by the disaster. Although the government will need to provide extensive support to the agricultural sector, joining the TPP will not open markets for all farm products immediately. Japan could negotiate for a long transition period, 10 years, say, during which it could gradually lower tariffs.
When Group of 20 finance ministers and central bank governors met in Washington last week, they pledged to support Japan's reconstruction. In trade negotiations with Japan, other countries may be willing to take the economic effects of the quake and tsunami into account.
To help agriculture in tsunami-devastated areas recover, steps to raise productivity, such as consolidating farmland, will be essential. If the government can develop effective policies, agriculture in the Tohoku region could come back even stronger -- strong enough to withstand the harsher competition of free trade. The Reconstruction Design Council, which the government set up last week, should take up this issue.
Trade should play a key role in healing Japan's sickly economy. Now is the time for Prime Minister Naoto Kan's administration to show that Japan is serious about the TPP.
Source: The Nikkei April 19 morning edition
TOKYO (Nikkei)--The Tokyo Girls Collection, one of Japan's largest fashion events, will debut in China next month in a bid to capitalize on the growing popularity among young women across Asia of trendy Japanese clothing.
Tokyo Girls Collection 2011 in Beijing will be held on May 7 in the Chinese capital, marking the first time the show, which has a legion of fans in their late teens and early 20s in Japan, will be held overseas.
Under Z Group Co. obtained the licence to hold the event in Beijing from its operators -- Fashionwalker Inc. and F1 Media Inc.
About 50 fashion models and celebrities from Japan, China and South Korea will walk the runways, sporting the latest items of 13 Japanese fashion brands such as Cecil McBee.
The success of the Tokyo Girls Collection is partly due to audiences being able to order items they see on stage by cell phone. Online cell phone shopping has yet to take off in China, so Under Z and other event organizers plan to establish a Web site for PC users so customers can place orders at home after the show. The event expects to draw 12,000 people.
Source: The Nikkei Marketing Journal April 19 edition
TOKYO (Nikkei)--To tap growing demand from consumers with food allergies, a subsidiary of Nippon Meat Packers Inc. (2282), or Nippon Ham, plans to step up production and sales of bread made from rice powder.
Tohoku Nippon Meat Packers Inc. started selling frozen rice bread at cooperatives in western Japan this January, going national with the product last month. For a time since its January 2010 debut, the bread was available only through limited sales channels, such as the company's online shopping site and local souvenir shops.
Tohoku Nippon has also decided to increase its purchasing from a local agricultural co-op of rice to be made into flour. Rice acreage will be doubled from last year to about 2 hectares. Around 6 tons of rice was harvested in 2010. Besides ham and sausage, Tohoku Nippon makes foods free of milk, eggs, and five other common allergens. Sales of such products have been growing at least 5% a year amid a rise in children with allergies.
Source: The Nikkei Business Daily April 22 edition
TOKYO (Nikkei)--Japanese companies hit by the March 11 disaster need to quickly get supplies back to normal levels, or they risk losing customers to foreign competitors, Hiroshi Watanabe, president and CEO of the Japan Bank for International Cooperation, said in a recent interview with The Nikkei.He also said that the Japanese government should offer more explanations about goings-on in the country to prevent unwarranted reaction overseas to groundless rumors. Excerpts from the interview follow.
Q: How much damage do you think was caused by the Great East Japan Earthquake?
A: Just after the quake, an estimate was made that direct losses would total 100 trillion yen. But the government unveiled an estimate that losses would amount to 16-25 trillion yen, which helped stabilize the market.
The International Monetary Fund downgraded its forecast on Japan's economic growth for 2011 by 0.2 percentage point from 1.6% to 1.4%. I think the drop would probably be a bit bigger, by 0.5 point or so.
Q: Will the economic downturn be protracted?
A: Fiscal spending for reconstruction will reach a fully blown level in 2012 and 2013, and that will steer the economy toward recovery. After the Great Hanshin Earthquake (in 1995), economic activity recovered in several months. But last month's disaster affected wider areas and devastated infrastructure. It will take longer (than in 1995) for reconstruction investments to surpass the (depth of the) downturn caused by the quake.
Q: The quake reduced the supply capacity of Japanese business. What is the signifance of that?
A: From a macroeconomic viewpoint, the reduction can be seen as having narrowed the gap between supply and demand, which has been a cause for deflation. So it's important to build a supply system that matches demand, and not simply return to pre-quake levels, particularly in the Kanto region.
Q: What effect has this had overseas?
A: It's become clear that damage to supply chains originating in Japan affects the whole world.
Q: Will Japanese companies lose their global competitiveness?
A: I think South Korean and Taiwanese companies will strengthen their efforts to replace their Japanese rivals. (Foreign) materials and parts customers may wait a month or two for Japanese suppliers to resume shipments. But even so, they will diversify suppliers.
About one-third of supplies from Japanese companies could be replaced by goods from other countries. The longer the resumption of supplies are delayed, the higher that ratio will be. There's no time to lose.
Q: What do you make of Japan's trade deficit plunging in March?
A: Exports of automobiles and other items fell, while imports rose for reasons such as high crude oil prices. The reduced nuclear power capacity means imports of liquefied natural gas will increase. And imports of materials for reconstruction work, such as temporary home building, also will increase.
Japan may fall into a trade deficit in April or later. Even if the trade balance remains in surplus, it will stay at very low levels for the time being.
Q: Will the nuclear accident at the Fukushima Daiichi power plant hamper Japan's efforts to export infrastructure?
A: It will take a while for (Japan to be able) to export nuclear power systems because Japan first has to resolve and thoroughly investigate the situation.
But demand will increase for traditional and renewable power generation. And as emerging economies grow, they will increasingly need water supply, rail and other types of infrastructure.
Japan should continue striving to export such types of infrastructure.
Q: What about the spurious rumors flying around overseas?
A: I heard a rumor that quake-hit Japan would face a funding crunch. That is at complete variance with the facts -- Japan has ample cash.
The world holds a strong interest in what is going on in Japan, so we should provide comprehensive and more detailed explanations.
--Interviewed by senior Nikkei staff writer Yoichi Takita
Source: The Nikkei April 25 morning edition
The Office of Commercial Affairs, Royal Thai Embassy in Tokyo, Japan
Source : http://www.depthai.go.th