TOKYO (Nikkei)--Members of the Japanese government are floating the idea of limiting a temporary corporate tax rise to a short period of two to three years, it has been learned. The government will begin full discussions of temporary tax hikes to generate funds for reconstruction late next month. Some in the government have proposed that income tax should also be raised for five to 10 years.
It plans to start drafting budgets for the next fiscal year in September, and hopes to limit issuances of government bonds -- excluding reconstruction bonds -- to below 44 trillion yen. The government had been keen before the quake to lower the effective corporate tax rate -- currently around 40% -- by 5 percentage points in this fiscal year's tax reform bill, but there is no prospect of implementing this plan.
Meanwhile, some are looking into raising the corporate tax rate temporarily -- perhaps from as early as fiscal 2012 -- before lowering the effective rate to 40% or less in fiscal 2014 or fiscal 2015. Many people in the government and ruling parties oppose the idea of including consumption tax in temporary tax hike plans, on the assumption that revenue from the sales tax is spent on financing social security. Discussions on tax policy are likely to be centered on how future tax hikes are combined.
Source:The Nikkei July 24,2011
TOKYO (Dow Jones)--Japan posted a surprise Y70.7 billion trade surplus in June, Finance Ministry data showed Thursday, the first positive reading in three months as the country's export-dependent economy continues to recover from the March 11 disasters. The figures confirm public-sector and private economist views that major companies are recovering more quickly than expected from the supply-chain disruptions that ricocheted across the economy following the earthquake, tsunami and ensuing nuclear power plant crisis. Exports fell a moderate 1.6% in June after double-digit drops in May and April. Economists had expected a 4.0% decrease.
The surplus in the trade of goods compared with a Y148.6 billion deficit expected by economists polled by Dow Jones Newswires and the Nikkei, and comes after a Y855.8 billion shortfall in May and a Y467.7 billion deficit in April. Despite the encouraging signs, analysts say the figures show the economy still has some way to go to a full recovery. The overall surplus represented a fall of 89.5% from June 2010.
"Japan's exports may not be able to maintain the pace of recovery down the road," said SMBC Nikko Securities chief market economist Mari Iwashita, noting that growth in key markets such as the U.S. and China appear to be slowing. Exports to China were up 1.2% from a year earlier, the first gain in three months, while those to the E.U. gained 8.0%, also the first rise in three months. U.S.-bound exports fell 6.1% on year in June, but that was better than a 14.6% decline in May.
The fall in exports in June was the fourth consecutive monthly decrease, and was mainly due to fewer sales of cars and electronic parts, the data showed. The fall was, however, much narrower than May's 10.3% drop and April's 12.4% decline.
Imports were up 9.8% in the month, rising for the 18th straight month but weaker than economists' forecast for an 11.0% increase. A ministry official briefing reporters said that improvements in the auto sector were a key driver of the stronger figures. Car exports fell 12.5% from a year earlier in June, after dropping by 38.9% in May and plunging 67.0% in April.
Source:The Nikkei July 21,2011
TOKYO (Dow Jones)--Japan's parliament passed a Y2 trillion disaster-relief budget Monday, completing one of three conditions Prime Minister Naoto Kan set out for his resignation.
The second supplementary budget, a spending package aimed at helping the victims of the March 11 quake, tsunami and ensuing nuclear disaster that hit the northeast region of Japan, was passed by the opposition-controlled upper chamber of parliament.
Largely seen as a stopgap budget between the Y4 trillion aid package passed in May and a third extra budget expected to be around Y10 trillion, the bill includes financial aid for individuals and small businesses, as well as assistance for the operator of the Fukushima Daiichi nuclear power plant to pay compensation to area residents.
Due to the budget's relatively small size, the package will be funded by a surplus from the fiscal year 2010 budget and will not require the issuance of new bonds.
Criticized as "too little, too late" by the main opposition Liberal Democratic Party leader Sadakazu Tanigaki, rival parties nonetheless agreed early on to the aid package with minimal resistance to avoid a public backlash against politicizing much-needed aid to the affected regions.
The enactment of the budget bill brings Kan one step closer to resigning. Last month, the embattled premier narrowly escaped a no-confidence motion by promising to turn over power to "the next generation" of lawmakers after the approval of three key bills.
The other draft legislation, a bill to issue deficit-covering bonds to fund 40% of the main budget, and an energy bill to facilitate the selling of renewable energy to power companies, has yet to gain opposition endorsement. Most bills need upper house approval to become law.
With Kan's imminent exit expected as soon as next month, the ruling Democratic Party of Japan is stepping up efforts to negotiate with the opposition to speed up the process of booting out its unpopular leader.
Last week the DPJ's secretary-general publicly apologized for the party's "overly optimistic" funding outlook for its signature spending programs--part of the election campaign platform that brought the DPJ to power in 2009--setting off a chain of similar apologies by senior party officials, including Kan himself.
The opposition had been demanding the DPJ retract what it calls pork-barrel spending as a condition for supporting the deficit-bond issuance bill. Political watchers say the DPJ's sudden willingness to give ground on its showcase policies indicate the party's desperation to distance itself from Kan.
A poll released by Kyodo News on Sunday showed that Kan's approval rating has plummeted to 17%, his lowest ever. The survey showed that 66.9% wanted Kan out of office by the end of the current session of parliament, which ends August.
Source:The Nikkei July 25,2011
TOKYO (Nikkei)--The March 11 earthquake has forced companies to postpone announcements of medium-term business plans, or put back targets. Many firms are also restructuring plans to take into account the yen's ascent and rising material prices.
Mitsubishi Materials Corp. (5711) is reconsidering target figures in its three-year plan from fiscal 2011, which it had planned to announce in late March. The major nonferrous metal smelter had to amend its plan because disaster damage had forced the closure until late June of its copper smeltery in Iwaki, Fukushima Prefecture.
Taiheiyo Cement Corp. (5233) and Yokogawa Electric Corp. (6841) also delayed announcements of new medium-term plans from fiscal 2011 because of uncertainty over future demand.
Mitsuyuki Kanamori, president of Citizen Holdings Co. (7762), said in May that the watchmaker had targeted an operating profit of 25 million in fiscal 2012, but may have to put this target back by a year or so. Kanamori cited such reasons as damage to watch and machine tool plants and hazy prospects from product prices and part procurement.
Stagnant nuclear business The crisis at the Fukushima Daiichi nuclear power plant has forced companies in the nuclear power industry to adjust business plans. Toshiba Corp. (6502) had aimed to boost its annual sales in the nuclear power business to 1 trillion yen by winning orders to build 39 reactors by fiscal 2015, but it now expects this target to be delayed by several years. Toshiba hopes to make up for the stagnation of its nuclear business by expanding its smart community business, which includes smart grid development. Its acquisition of Landis+Gyr AG, a Swiss company, for about 190 billion yen is part of this shift.
Mitsubishi Heavy Industries Ltd. (7011), however, is sticking to its nuclear business target of winning 600 billion yen worth of orders in fiscal 2014. While Japan's largest heavy machinery manufacturer sees difficulties in winning new orders to build nuclear plants in Japan, Executive Vice President Shigero Masamori says, "We'll get orders for tsunami countermeasures and other safety-related projects, such as boosting backup power sources, for existing nuclear plants." Change of tack
Many companies plan to restructure their businesses to cope with the strong yen, soaring material prices and increasingly stiffer competition.
Ricoh Co. (7752) will shed 10,000 employees -- about 10% of the group's overall work force -- mostly in Japan, the U.S. and Europe over the next three years. The office equipment maker has made aggressive acquisitions in the U.S., but has been slow to streamline businesses, resulting in a bloated payroll that has hit the company's bottom line.
Prima Meat Packers Ltd. (2281) plans to halve its range of processed food items such as ham and sausages from the present 1,200 or so in the three years from fiscal 2011. The company will also invest 20 billion yen -- double its investment in the previous three years -- during the same period to beef up production lines and rationalize operations. It hopes to overcome higher material prices and improve earnings by concentrating resources on core products to boost production efficiency.
Source:The Nikkei July 22,2011
A public-private joint investment fund will set up a new company as early as this summer to deal with planning, production and international distribution of Japanese movies and anime, it has been learned. The new company is designed to boost the international competitiveness of Japanese movies and anime stories, according to sources.
The new company, to be established by the Innovation Network Corporation of Japan (INCJ), will be tasked with identifying promising original works and ideas from among Japanese companies or individuals and will be entrusted with holding the sale of rights for film adaptations on behalf of the original copyright holders, the sources said.
While recruiting some experts in Hollywood and gaining their expertise in production and distribution, the new company will attempt to expand distribution channels for Japanese movies and anime abroad, including in emerging markets.
The INCJ will invest about 5 billion yen in the new company, which it will wholly own. The company will have bases of activity in Japan and the United States. The new company will aim to produce about 10 box-office hits, each making several billion yen, in the initial five years, the sources said.
While being in charge of handling film rights to the works and concepts that companies and individuals have, the new company will also work on projects jointly with its business partners in Hollywood to produce movies and anime. Initially, the company will distribute and release movies and animated dramas in the United States and export them to emerging economies and other countries later.
The purpose of producing, selling and even exporting movies and anime stories from a base in Hollywood is to compensate for a lack of relevant expertise in the Japanese filmmaking and anime content industries. Japanese-made movies, anime and other content have been quite popular in Western and Asian countries as a symbol of "Cool Japan."
But, according to the Economy, Trade and Industry Ministry, their prices have often been beaten down in negotiations over the original works, with the result that Japanese businesses and individuals who created the content do not receive sufficient profits.
Source:The Yomiuri Shimbun July 21,2011
TOKYO (Nikkei)--Cash-laden singles are splashing out on luxury home appliances with price tags double those of standard models.Leading the trend are eligibles in their late 20s and early 30s who are keen on features that make household chores less of a grind. Another factor is that people have been spending more time at home since the March 11 quake.
One hit product is Panasonic Corp.'s (6752) Petit Drum washer-dryer, which retails at between 107,800 yen and 125,800 yen. The model's advanced drying functions prevent the wrinkling of clothes and remove the need for ironing. A Yodobashi Camera Co. official says that despite the high price it is the top-selling model for singles.
Panasonic is also targeting the same demographic with a brand that features chic black designs. A Panasonic official says sales of these home appliances have nearly doubled from the previous year. Unattached folk are also buying high-end kitchen electronics. Sharp Corp.'s (6753) Healsio steam oven (selling at between 37,800 yen and 49,800 yen) and Mitsubishi Electric Corp.'s (6503) Zitang (74,800 yen) are hot-selling microwaves with improved heating efficiency that reduce cooking time. These two products are particularly popular because they make it easier to cook complex dishes.
Source:The Nikkei July 19,2011
TOKYO (Nikkei)--Mitsui & Co. (8031) and Dow Chemical Co. will construct one of the world's largest production complexes for plant-derived plastics in Brazil, with the total investment in the project expected to top 2 billion dollars, or 160 billion yen.The raw material will be sugar cane grown on local plantations managed by the joint venture as part of an integrated production process. Under an agreement concluded Tuesday, Mitsui will become an equal partner in a local Dow subsidiary, investing 200 million dollars, or about 16 billion yen, in the operation.
The construction of multiple bioethanol plants, each with an output capacity of 240,000kl a year, is to begin in 2013. The biopolymers factory, to be built in 2015, will use this bioethanol as a feedstock. Mass production will begin that year at 350,000 tons a year.Biopolymers can cost up to twice as much to make as petroleum-based plastics. But Dow reckons that technical improvements and mass production can eliminate this cost disadvantage or even give biopolymers the upper hand. The plastics made at the Brazilian plant will also be on par with conventional plastics in strength and durability, according to Dow.
Biopolymers are gaining popularity as an environmentally sound alternative to oil-based plastics in food packaging, autoparts and appliances. Mitsui is looking to supply output from its Brazilian joint venture to Japanese firms with factories in the Americas. By some estimates, the global market for bioplastics will grow to 3 million tons in 2020 from 300,000 tons today. Mass production is likely to bring down prices and help speed the market's expansion.
Among other Japanese companies, Mitsubishi Chemical Holdings Corp. (4188) subsidiary Mitsubishi Chemical Corp. is considering producing plant-derived plastics in Thailand through a joint venture.
Source:The Nikkei July 20,2011
TOKYO (Kyodo)--Farm minister Michihiko Kano announced Tuesday an emergency policy of buying up beef contaminated with radiation following the recent impounding of a slew of cattle suspected of being fed cesium-tainted rice straw amid the nuclear crisis at the Fukushima Daiichi power plant. Those subject to the measure are cattle proved to be contaminated with radiation exceeding the government-set limit, and the buy-up cost will be shouldered by the plant operator Tokyo Electric Power Co.
The government said 50,000 yen will also be provided per head of cattle to livestock farmers suffering from the impact of the nuclear crisis at the power plant, which spewed radioactive substances after the March 11 earthquake and tsunami caused a series of explosions. The release of radioactive material has led to fear of radioactive contaminated beef making it to store shelves after scores of cattle were discovered to have been shipped to market after being fed tainted straw.
With the measures, the government aims to alleviate fear among consumers that contaminated beef may be distributed to the market, as well as to support farmers. "By making sure only safe beef is distributed to market, we intend to dispel worries of consumers," Kano said at a press conference after a Cabinet meeting. Under the emergency policy for the detention of contaminated cattle, industry bodies will be in charge of buying up such animals. Storage and other necessary costs will be covered for beef suspended for shipment.
The 50,000 yen compensation will be paid by industries bodies for the utility known as TEPCO. Since radioactive cesium above the government-designated limit was detected in beef cattle from Fukushima Prefecture at a Tokyo slaughterhouse on July 8, it has been discovered that cattle possibly fed with contaminated straw have been delivered to many other places in the country.
Source:The Nikkei July 26,2011
Monday, July 25, 2011
TOKYO (Nikkei)--Ryohin Keikaku Co. (7453), the parent company of the Muji store chain, will begin sourcing reusable shopping bags from Laos instead of China, where labor costs are rising.
Ryohin Keikaku will buy all of the bags made by its Laotian partner factory, where a team from the Japanese firm is providing guidance on mass production. At the same time, it will purchase local handicrafts for a line of traditional goods from around the world. The bags will go on sale at Muji stores in Japan in October. Ryohin Keikaku aims to sell 1 million a year. Woven from thick Laotian-style thread, they are supposed to hold up better than Muji's Chinese-made bags and will sell for 50-100 yen more, or 100-200 yen each.
Source:The Nikkei July 25,2011
Campaigns promising to donate proceeds to certain causes can even have knock-on effects
Japan is riding a big wave of what in Europe and the U.S. has become known as social marketing. A campaign might come in the form of a promise to donate a portion of proceeds from certain products to charitable causes. In Japan, a lot of the companies pledging this kind of revenue sharing are steering money to victims of the Great East Japan Earthquake.
Fast Retailing Co., which operates the Uniqlo
clothing chain, ran a promotion under which it donated 100 yen ($1.25) to the quake-stricken region for every 500 yen Dry Color T-shirt sold from April 9-10 and every 1,990 yen polo shirt sold from April 23 through May 8.
Consumer response was enormous. The company collected more than 230 million yen in donations, most of which was contributed to the Momo-Kaki Orphans Fund for orphans of the Great East Japan Earthquake. The organization's operating committee is headed by architect Tadao Ando. Tadashi Yanai, Fast Retailing's president and chairman, is one of its founders. The remainder went to the Japanese Red Cross Society and other organizations.
Lady Gaga
On June 25, Uniqlo began selling Save Japan! UT T-shirts emblazoned with messages from 10 global celebrities such as pop diva Lady Gaga. Around 100 million yen is expected to be raised. The cash will be donated to the Japanese Red Cross to help quake victims.
The retailer says it plans to continue its social marketing efforts in various forms. After the earthquake struck, another apparel manufacturer, World Co. created charity T-shirts under 28 brands, including its Untitled and Indivi lines, and turned to the Internet to make advance sales.The shirts were priced at around 2,100 yen. Sales were brisk, with more Ts than anticipated being reserved by early May. All profits will be donated to quake relief efforts.
Creating a tide
Kirin Beverage Co. is promising to contribute a portion of sales of some products, including some existing beverages, to the quake-stricken area. Gogo-no-Kocha tea beverages - which will be marketed through July with the slogan "Black tea puts a smile on your face" - are included in the campaign. Kirin will use the money to help children in the disaster-devastated areas.
Separate from this, the bottler has released Kirin Loves Sports, a sports drink that sells for 124 yen per 555ml bottle, and Alkali Ion Water, a bottled water that goes for 230 yen per 2 liters. The packaging of each features Japan's national soccer team. For each bottle sold, the company will donate 1 yen to a fund that will purchase soccer gear for people in the quake-affected region. Suntory Holdings Ltd., meanwhile, has a social marketing campaign for beerlike beverages and soft drinks. For every can it sells, it will donate 1 yen to one of two funds. It expects to raise 4 billion yen. Of that, 2 billion yen will help fishermen in Iwate and Miyagi prefectures acquire or repair fishing boats. The rest will be used to help educate children as well as extend sports and cultural assistance to quake zone survivors.
Likewise, Ito En Ltd. has also decided to donate a portion of its tea sales to disaster-recovery causes. A key feature of the beverage companies' initiatives is the ease with which consumers can understand how donations will be used. This is not always the case in the many street-based fund-raising campaigns that have sprung up since the quake.
Some observers say there is another benefit: Companies that have pledged to contribute a portion of sales or profits have also helped consumer spending return to normal levels. The companies and entrepreneurs who made notable donations immediately after March 11 were not able to create the same kind of tide. Easier on the environment Social marketing can also come in the form of a promise from the product itself:
That its making was mindful of the environment. Morinaga Milk Industry Co. has turned to environment-friendly ingredients for five product lines, including its Mt. Rainier Double Espresso series. The coffee beans, for instance, have been certified by Rainforest Alliance, an international nongovernmental organization. The company has also released two new black tea beverages that use similarly certified ingredients.
Souce:The Nikkei Weekly July 18,2010
The Office of Commercial Affairs, Royal Thai Embassy in Tokyo, Japan
Source : http://www.depthai.go.th