TOKYO (Kyodo)--The government abandoned its plan Tuesday to decide by June whether to join negotiations for a trans-Pacific free trade agreement, after identifying Japan's policy priorities in the wake of the March 11 calamitous earthquake and tsunami.
But the government decided to stick to its goal of outlining tax and social security reform plans by the end of June, at a time when Japan is struggling to secure enough funds for reconstruction of the devastated northwestern region without seriously damaging its already tattered fiscal position.
The economic policy guideline, endorsed Tuesday by the Cabinet, says that Japan needs to redesign its growth strategy in the wake of the triple disaster of the massive quake, tsunami and nuclear crisis. The updated version, which may be released as early as next month, could include some changes in Japan's energy policies and its efforts to promote exports of infrastructure, such as nuclear power technology, according to government officials.
Before the disaster, trade liberalization and social security reform were two of the most important agenda items for Prime Minister Naoto Kan to help the country ensure recovery from its continuing economic malaise.
The guideline now vaguely says the government will "comprehensively consider when to make a decision" on whether to join the talks of the regional multilateral trade framework, known as the Trans-Pacific Partnership.
Despite the delay, Kaoru Yosano, economic and fiscal policy minister, told a news conference that Japan's stance on the trade pact has to be made clear by November -- when countries currently involved in the talks are aiming to strike a deal when the United States hosts the next Asia-Pacific economic summit in Hawaii.
The trans-Pacific agreement seeks to scrap all tariffs among member countries in 10 years, making no exceptions for sensitive items, such as rice and dairy products in Japan's case. There remains strong opposition in Japan over the government's willingness to be part of the trade framework, especially among farmers who are concerned about a possible influx of cheap imports.
As the hard-hit northeastern region, known for strong farming and fishery industries, is still suffering from the aftermath of the natural calamities, the government is likely to find it even more difficult to win support for joining the free trade talks.
Under such circumstances, the government decided in the latest guideline to delay its plan to formulate a basic policy on farm reform around June.Thursday, May 19, 2011
Source: The Nikkei May 17, 2011
TOKYO (Kyodo)--Chinese Premier Wen Jiabao said Sunday the country will partially ease restrictions on imports of Japan-made agricultural and food products provided Tokyo ensures the safety of the products from radioactive leaks from a Fukushima Prefecture nuclear power plant crippled by the March 11 earthquake and tsunami.
Wen told Japanese Prime Minister Naoto Kan during a meeting in Tokyo that China will lift the import ban on farm and food products from Yamagata and Yamanashi prefectures, cutting to 10 the number of prefectures subject to such a ban, Japanese officials said.
Wen also agreed that China will no longer require food products, excluding dairy and fishery products and vegetables, from other prefectures to be accompanied by radiation inspection certificates issued by the Japanese government, the officials said. At present, China effectively blocks imports of almost all food and farm produce from Japan, with Chinese authorities not satisfied with certificates currently issued by the country to indicate radiation levels and place of origin.
With the change in China's requirement of radiation inspection certifications, Japan expects the shipments of food and agricultural products other than vegetables, dairy and fishery products to be designated by Beijing will start to be accepted, according to the officials.
The premier urged Tokyo to continue to provide information swiftly on the Fukushima nuclear crisis, as he urged Kan to "understand the interests and worries of a neighbor," according to the officials. Japan's decision in April to discharge low-level radioactive water into the Pacific Ocean from the troubled plant drew criticism from neighboring countries, as it failed to fully notify them beforehand.
As part of efforts to bring back Chinese tourists to Japan, Wen told Kan that Beijing will send a 100-member tourism mission to Japan from May 30 to June 4, they said. To rejuvenate bilateral personnel exchanges, Wen said China will invite 500 Japanese students from areas hit by the disasters.
The two also agreed that government officials and private-sector representatives will discuss cooperation to help the reconstruction process of Japan on the sidelines of a bilateral high-level economic dialogue to be held in Tokyo this summer.
Wen briefed Kan about the ongoing visit to China by North Korean leader Kim Jong Il, according to a Japanese official, who declined to offer details at the request of the Chinese government. Neither North Korea nor China has made any announcement on Kim's trip aboard a special train, his third visit in little more than a year to China, the North's traditional ally.
Kan asked Wen that Beijing play a greater role in prodding Pyongyang to hold talks with South Korea, commit to denuclearization and address the issue of the North's past abduction of Japanese nationals, the Japanese official said.
Kan said North Korea's uranium enrichment activity is in violation of U.N. Security Council resolutions and a 2005 joint statement issued by six countries involved in talks on the North's nuclear programs.
Kan told Wen he will visit China at an "appropriate time this year," according to the official. Later in the day, Japanese Foreign Minister Takeaki Matsumoto and his Chinese counterpart Yang Jiechi separately held talks and stated their basic positions on the disputed islands in the East China Sea, the officials said. Bilateral relations sharply deteriorated following maritime collisions near the Japan-administered Senkaku Islands last September. The islands claimed by China are called the Diaoyu in the country.
The two ministers talked about establishing a mechanism to avert crises in the sea involving maritime safety authorities. Wen pushed that idea during his meeting with Kan, according to the officials. Matsumoto also told Yang that Japan will invite about 50 young Chinese officials in charge of disaster management as part of people-to-people exchanges, they said.
Source:The Nikkei, May 21, 2011
TOKYO (Nikkei)--Japan and South Korea will sign a pact Friday to ease customs procedures for authorized businesses of the other country, a measure to boost bilateral trade. In Japan, the products of 370 companies, including Toyota Motor Corp. and Nippon Express Co., are already fast-tracked through customs as so-called authorized economic operators. South Korea has approved 141.
With the pact, to be implemented within a month or two, Japanese products will be granted expedited passage at South Korean borders, and vice versa.Japan has already inked similar agreements with New Zealand, the U.S., the European Union and Canada, and is in talks with Singapore, China and Malaysia.
Japan and South Korea started their negotiations in May of last year. South Korea accounts for 6% of Japan's trade. Japan's Finance Ministry expects the pact to boost trade of steel and semiconductor-related products.
Source:The Nikkei May 19,2011
TOKYO (Nikkei)--The Japan-South Korea investment fund to be launched next month for financing Asian television programming is a result of the rapid growth of the South Korea's content industry. That industry has thrived on government backing, with exports of broadcast programming exceeding imports in 2002 and eclipsing Japan's in 2005.
Selling broadcasting rights, DVDs and other derivative products is not just about generating income. It also boosts the image of South Korean goods and services in general, resulting in expanded trade. The TV drama "Winter Sonata," which was broadcast in Japan in 2004, sparked the South Korean boom here, drawing more Japanese visitors to the country and generating an economic impact of roughly 30 billion yen.
Japan's Ministry of Economy, Trade and Industry has established an in-house organization to promote Japanese culture abroad, seeking to launch a public-private fund to support international marketing of Japanese content. But the plan is far from becoming reality.
Japan is "a lap behind in the race and can't even see South Korea's back," says a top executive at a domestic production studio. The content industry here has a structural problem, with major broadcasters controlling the entire cycle of drama programming, from planning and production to broadcast, with studios merely serving as subcontractors. Because copyrights are owned by broadcasters, production studios must obtain their permission for secondary content uses, such as online distribution.
Many domestic studios are not big enough to own copyrights alone and lack the ability to raise funds.
The soon-to-be-launched Japan-South Korea content fund may provide a point of entry into the broader Asian market.
Source:The Nikkei May 20,2011
TOKYO (Nikkei)--Japan needs to overcome the three hurdles of supply chain disruptions, power shortages and eroding consumer and business sentiment before its economy can return to the recovery path, according to economists polled by The Nikkei.
The nation's economy had originally been widely seen to expand for the January-March quarter. But this scenario was derailed by the March 11 earthquake and tsunami, which sent real gross national product for the period tumbling an annualized 3.7% on the quarter, according to preliminary data released Thursday by the Cabinet Office.
The 10 economists expect real GDP to continue shrinking by an average 3.5% in the April-June quarter, owing to the lingering impact of parts shortages. But they say it would bounce back to show an average 3.9% growth in the July-September term. They note, however, that the economy would have to overcome major obstacles to achieve such a rapid recovery.
First, supply chains need to be quickly restored in order for the economy to get back on its feet. Corporate production capacity took a hit after the March disaster as parts output in the quake zone halted. Carmakers and other manufacturers faced extensive supply disruptions, causing them to scale back operations. And the crisis at Tokyo Electric Power Co.'s (9501) Fukushima Daiichi nuclear plant caused power shortages in the greater Tokyo area, further hampering production.
Fortunately, the restoration "is moving at a faster pace than expected," says Yoshiki Shinke, senior economist at Dai-ichi Life Research Institute Inc. But it is a race against time. Orders may not return even after supply resumes should customers that turned to alternative suppliers overseas decide to stick with them. And a delayed recovery in supply chains could spur domestic manufacturers to move abroad, where costs are lower.
"If companies abandon northeastern Japan or head abroad, Japan's export competitiveness will decline and industries may hollow out," warns Takahide Kiuchi, chief economist at Nomura Securities Co.
Likely summer power shortages will also pose a challenge. Even though the government relaxed its target for power reductions among large-lot users from 25% to 15%, that's still a constraint to manufacturing. "Power shortages could continue for several years, a factor that threatens to hurt growth expectations among companies," warns Ryutaro Kono, chief economist at BNP Paribas Securities (Japan) Ltd.
Third, deteriorating sentiment among consumers and corporate managers bodes ill for economic growth. If the production recovery stalls, concerns about the economic outlook could spread, curbing consumption and business investment. Exactly when Japan will be able to bring the nuclear crisis under control will also affect confidence. Worker pay in the January-March term rose a real 0.2% from the prior quarter, "but households continue to harbor strong woes about their future income and employment," says Junichiro Takeuchi, a senior economist at Japan Center for Economic Research.
Source:The Nikkei May 20,2011
TOKYO (Nikkei)--Sales of jeans are stagnating because of a consumer switch to more loose-fitting pants. "I used to wear jeans in my junior high school and high school days, but I haven't worn them recently because they aren't easy to move around in," says a 20-year-old student looking for cargo pants in a Tokyo store. Jeans are losing ground to pants such as chinos. April sales at speciality jean chain stores were poor. Jeans Mate Corp.'s sales fell 17.8% on the year -- part of a trend that has seen Jeans Mate's monthly sales fall year-on-year since October 2009. Right On Co. saw a drop in sales 11.6%. Jean makers are struggling, with Bobson & Co. applying for creditor protection under the Civil Rehabilitation Law on May 2.
Domestic jean production has been on the slide in recent years. A Japan Jeans Association survey showed a fall in output from 70.37 million pairs in 2004 to 50.62 million in 2009. While the figure does not include original brands, an association official says, "Adding them in wouldn't make any difference." The official added that annual sales are at about the same level as production.
Discounted denim
Jeans have been popular since the 1960s, coming into vogue at times such as when new materials were used. Vintage jeans have also sold for tens of thousands of yen on occasion. So what has caused the recent slump? The lingering impact of a surge in 1,000 yen jean sales in 2009 could be a factor.
Gov Retailing Co., a Fast Retailing Co. subsidiary that owns the g.u. clothing chain, launched a range of 990 yen jeans; with clothing stores and hypermarkets following suit with their own original
brands. Analysts believe this has led to consumer uncertainty over what makes for good value in a pair of denims.
"Since the launch of 1,000 yen jeans, sales of once-popular 7,000-8,000 yen jeans, as well as 2,000 yen jeans have stagnated," a manager of one speciality jeans store says. Arihiro Kaneda, president of Mode International Co., a clothing consultancy, says, "Uncertainty over traditional price-setting could be growing."
Kaneda added that 1,000 yen jeans temporarily helped to boost domestic sales, but much of this demand was for indoor clothing and this did not translate into a large market share. Consumers are also wearing different types of clothing. "Fewer women are wearing jeans," a Bobson director says. More comfortable clothing has been in demand. A recent upsurge in legging sales, for example, has shifted the trend further away from jeans.
Men also have a wider choice of products such as cargo pants. "I usually wear more comfy pants," a 40-something Tokyo man said. "I have few opportunities to wear jeans." Another major blow to jeans is that people are allowed to wear chinos at work as part of the annual "Cool Biz" summertime energy-saving campaign.
Jeans could retain their crown as the casual trousers king through sales promotions targeting young people and baby boomers. Makers are also introducing new products such as adjustable jeans. But the competition is fierce. It will not be easy for the industry to shake off its recent slump.
Source:The Nikkei May 18,2011
Japan's fabric softener market has been expanding. According to Kao, industrywide domestic shipments totaled a tad below 80 billion yen in 2010, up more than 30% from 2003. An increase in highly functional products - which tout their deodorizing effect, strong fragrances and lasting scents as well as their softening ability - has been helping to enlarge the market.
With many consumers wanting their clothing to be imbued with long-lasting fragrances, scented softeners tend to be used in larger quantities than necessary. Lion found that consumers use around 1.35 times more of its regular-type Soflan softener than is appropriate and nearly 1.55 times more of its fragrant Soflan softener than is necessary. This is one reason the fragrant line is experiencing a sales increase.
Now new opportunities are presenting themselves, like marketing compatible detergent-softener combinations. A lot of detergents already contain scented softening agents and are being used in conjunction with the new enhanced-fragrance softeners. So Kao is nudging consumers to use its New Beads Neo condensed liquid detergent with its baby powder-scented Humming Neo softener, saying the combination leaves clothes with a pleasant smell.
And then there are derivative products. In March, P&G began selling the Lenor Happiness fragrant sheets that are used by placing them in a linen closet, cosmetics pouch or name card case.
These days, fabric softeners seem to be all about giving off a pleasant whiff. Some women in their 20s through 40s keep several scents on hand so they can decide what they want to wear each day by how their softener-treated garments strike the olfactories.
Oh, and package design is important, too; the container needs to exude a certain refinement. You might say the household goods industry is cleaning up on the pleasant-smelling laundry trend as it floods the market with new products. Not only are producers able to charge more for their refined, perfumy softeners, a lot of consumers appear to be adding more-than-adequate amounts of the stuff to their laundry. And that means they'll be back for refills sooner.
Source: The Nikkei Weekly May 16, 2011
TOKYO (Nikkei)--The national budget deficit could exceed 10 trillion yen in 2015, not including the costs of rebuilding the disaster-stricken northeast, according to government projections obtained by The Nikkei.
The consumption tax rate would need to be raised by about 5 percentage points from the current 5% to make up the difference. Economic and Fiscal Policy Minister Kaoru Yosano will present the budget forecasts next month as part of a proposal to a government council on social security reform.
The figures show what could result from changes under debate in the council, assuming current levels of spending on public works and other areas besides social security. On the revenue side, the projections are premised on existing tax policies and a conservative outlook for economic growth. They also assume that the government will stick to its fiscal reform goals of halving the primary deficit by fiscal 2015 and achieving a primary surplus in fiscal 2020.
Costs associated with reforming pensions, health care and other entitlements account for some 8 trillion yen of the projected budget shortfall for 2015. The forecasts take into account proposed expansions of benefits for young people and low-income individuals, aging-related natural growth in social security expenditures, as well as spending to maintain the government's 50% contribution to the basic pension program. In terms of the consumption tax, these outlays add up to a rate of about 3%.
Beyond that, at least 2-4 trillion yen in additional revenue would be needed to cut the primary deficit by half, according to the projections. That is the equivalent of a consumption tax rate of about 1-2%.
Yosano's presentation is expected to call explicitly for raising the tax.
The budget forecasts do not take into account spending on the reconstruction from the March 11 disaster or other potentially massive government outlays in the years ahead. Nor do they include grants to local governments, which equal 1 percentage point of the current consumption tax rate. How to share the revenue from this tax is certain to become a flash point in the reform debate.
Source:The Nikkei May 21,2011
The Office of Commercial Affairs, Royal Thai Embassy in Tokyo, Japan
Source : http://www.depthai.go.th