TOKYO (Nikkei)--Buoyed by exports, Japan's economy will likely register meager growth this fiscal year and next, according to data compiled by Nikkei Digital Media Inc. With preliminary gross domestic product figures for the April-June period -- released Monday by the Cabinet Office -- factored in, real GDP is projected to grow 2% in fiscal 2010, but the growth rate is expected to decline to 1.5% in fiscal 2011.
Exports will be the engine of growth, marking a steep 17.8% rise in the current fiscal year through March. Net foreign demand -- goods and services exports subtracted by goods and services imports -- is expected to drive up real GDP by 1.2 percentage points in fiscal 2010.
Because of uncertainty surrounding the global economy, Japanese exports are likely to shift to a slower gear, with growth coming in at 6.9% in fiscal 2011. Nikkei Digital Media offers the Nikkei Economic Electronic Databank System, or NEEDS, covering a wide array of financial data, including macroeconomic statistics.
Source:The Nikkei Aug. 17
TOKYO (Nikkei)--The unexpectedly feeble 0.4% growth in real gross domestic product for the April-June quarter could signal that Japan's economic recovery is sputtering out. The preliminary data released Monday by the Cabinet Office shows that consumer spending, which had been driving economic growth, remained flat in the April-June period.
Consumption of durable goods, such as consumer electronics and automobiles, pushed down the real GDP growth rate in that period by 0.1 percentage point. Public spending dropped 3.4% from the January-March term, marking the fourth consecutive quarter of declines.
"The April-June quarter GDP shows that the current government has no effective plans for the economy," says Kyohei Morita at Barclays Capital Japan Ltd. Although many Japanese companies reported extremely good quarterly earnings due to strong exports, they remained cautious about investment, with capital outlays growing by just 0.5%.
Based on the latest numbers, many economists now see the Japanese economy slowing down in the July-September quarter and beyond. A survey of private-sector economists' revised fiscal 2010 forecasts based on the preliminary figures shows an average growth rate for real GDP at 1.9%, down 0.6 percentage point from their average estimate three months earlier.
Currency exchange rates and government policies are major concerns among economists who hold pessimistic outlooks. "If the yen's appreciation accelerates further, the Japanese economy will head toward a double dip," says Hideki Matsumura at Japan Research Institute Ltd. The economist sees Japan's fiscal 2010 real GDP growth rate at 1.7%. An economic slowdown in the U.S. is also a concern among many economists.
"Exports started decelerating sooner than expected," notes Dai-ichi Life Research Institute Inc.'s Yoshiki Shinke. He forecasts 1.8% growth for Japan's real GDP this fiscal year. Because economic stimulus measures introduced under the previous government have expired or will end shortly, "we're now concerned that the green shoots of a self-propelled economic recovery may be dying out," warns Keisuke Tsumura, parliamentary secretary at the Cabinet Office.
Subsidies for environmentally friendly cars are due to expire the end of September, raising the likelihood that new-car sales will surge in the current quarter, then dramatically decline thereafter. Meanwhile, critics argue that the child allowance program, which the government introduced in June, does not help stimulate the economy.
The Japanese government "should intervene in the currency exchange market and introduce additional monetary easing measures and other stimulus policies," according to Yuji Shimanaka at Mitsubishi UFJ Morgan Stanley Securities Co. He predicts 2.4% growth in real GDP in fiscal 2010.
Some see household incomes being bolstered by solid corporate earnings on robust demand in emerging countries, kick-starting a positive economic cycle.
For example, Economy and Fiscal Policy Minister Satoshi Arai maintains that "a steady economic recovery is continuing," and argues that "describing the current economic situation as entering into a temporary lull is not appropriate."
The government "has been discussing with the Bank of Japan measures to counter the yen's appreciation," Arai adds.
Source:The Nikkei Aug. 17
TOKYO (Nikkei)--The government has decided to pick nine key projects in Southeast Asia to promote infrastructure export under a public-private initiative. The total project cost is estimated to reach roughly 900 billion yen. The government plans to begin detailed feasibility studies in October.
These projects include work related to water supply systems in Vietnam, Malaysia and Indonesia; an international airport, a coal-fired power plant, an industrial park and urban redevelopment in Vietnam; a highway in the Philippines; and a waste-processing facility in Indonesia.
The government aims to boost Japan's infrastructure-related exports through public-private partnerships, as suggested by the Japan Business Federation, better known as Nippon Keidanren. To provide the necessary funds for building roads and other social infrastructure -- which often require large long-term investments -- the government is considering tapping its official development assistance program. In addition, the Japan Bank for International Cooperation may offer financial support.
The government also aims to resume overseas investment and loans by the Japan International Cooperation Agency and seeks to help water departments at Japanese municipalities develop overseas water businesses.
In June, the cabinet adopted a goal of nurturing infrastructure-related export through public-private partnerships into a market worth 19.7 trillion yen by 2020 as part of its new economic growth strategies.
Source:The Nikkei Aug. 19
TOKYO (Nikkei)--Trading companies are once again playing an active role in coordinating mergers and alliances among businesses, and how well they are able to nurture professionals capable of competing in the rapidly globalizing corporate environment is seen as key to their success going forward.
In the past, industry realignments were mediated mainly by banks, trading houses and the Ministry of International Trade and Industry (now the Ministry of Economy, Trade and Industry). But poor earnings pushed trading firms to the edges of this field.
Today, however, surging natural resources prices have given traders the financial muscle needed to return as mediators who connect potential partners and help arrange tie-up deals.
Mitsui & Co.'s (8031) medium-term management plan, announced in May, contains a eye-catching phrase that says the company will "take a proactive approach in consolidating business and industries."
Recently, Mitsui, Marubeni Corp. (8002), and a major oil refiner agreed to merge the trading houses' joint subsidiary with the refiner's liquefied petroleum gas business.
"The number of companies in Japan is still large," said Mitsui President Masami Iijima. He said the trading house hopes to help arrange merger deals that could improve the competitiveness of the businesses involved.
Mitsubishi Corp. (8058), meanwhile, is involved in merger talks among Ryoshoku Ltd. (7451) and three of its other food wholesale units.
Talent pool
Another function trading houses are increasingly serving is providing skilled professionals to firms. Of the companies covered in Mitsubishi's consolidated financial statements, about 300 firms -- more than half -- are led by presidents who formerly worked for the trading house. Such firms include Lawson Inc. (2651), Hokuetsu Kishu Paper Co. (3865) and Kentucky Fried Chicken Japan Ltd. (9873).
Companies in which Mitsubishi has stakes often ask it to send people when they cannot find adequate successors to their presidents, according to an executive of the trading firm.
Trading houses are filled with many people suitable for such positions because, compared with other firms, their employees are given more opportunities to work abroad and acquire management skills early in their careers.
Matchmaker
Itochu Corp. (8001), which owns a 20% stake in the Ting Hsin group, acts as a mediator between the Chinese food company and prospective Japanese partners. Over the past few years, Itochu has brought together Ting Hsin, which wants Japanese technology, and Japanese firms wishing to expand into the world's most populous market, including Nippon Flour Mills Co. (2001), Asahi Breweries Ltd. (2502) and Kagome Co. (2811). A number of joint ventures have been established as a result.
Going global
Foreign markets, especially those in emerging countries, are proving increasingly important for Japanese businesses. This presents opportunities for trading companies to grow their presence as matchmakers. But it also raises the question of whether they have enough talent to adapt to this era of rapid change.
At a July 23 meeting on human resources strategy, Marubeni President Teruo Asada said the company will make every employee work overseas at some point in their 20s, starting with those who joined the firm this spring.
The company decided on the move after concluding that it lacked enough personnel who are globally competent. Marubeni apparently felt that continuing with the status quo could even hinder its growth.
"The deciding factor (in determining success) will be to what extent trading companies are able to globalize themselves, through the development of human resources and other measures," said Fukunari Kimura, a professor of international trade at Keio University. "And they will need greater planning capabilities than ever."
Source:The Nikkei Aug. 19
TOKYO (Nikkei)--Itochu Corp. (8001) aims to boost the output of organically grown cotton in India by providing financial aid to small farmers who ditch the use of chemicals.
Accreditation for organic cotton production requires at least three years of chemical-free cultivation, with small producers facing dwindling income for that period. As a result, the trading house will pay a premium of 20-30% over regular cotton during the course of the transition.
Cotton grown during the changeover will be branded pre-organic. Last year, Itochu bought 400 tons of pre-organic cotton from some 900 farmers in northern India, and plans to buy 500 tons from 1,100 producers this year. With around 4,000 farmers wanting to make the switch to organic, Itochu plans to procure 1,000 tons from 2,000 producers in 2012.
Purchased pre-organic cotton will be shipped to Japan and elsewhere in raw cotton or thread form to be made into T-shirts, jeans and other products. Focusing on their eco-friendliness, the items will be marketed as high-value-added apparel to differentiate them from lower-priced offerings.
Source:The Nikkei Aug. 21
TOKYO (Nikkei)--The Ministry of Economy, Trade and Industry is pushing for subsidies and loans for small and midsize manufacturers as the government discusses new stimulus measures.
Smaller exporters have been hit hardest by the rising yen and need help to maintain jobs, technical skills and international competitiveness, according to METI. The ministry is expected to seek up about 100 billion yen for the subsidies. It aims to cover part of the cost of developing and bringing new products to market. Government-approved firms will receive support for R&D in core manufacturing methods, such as molding and casting.
METI also plans to expand a program of loan guarantees and will consider increasing "safety net" financing from public lenders and reducing or waiving interest on these loans to small businesses.
It says the strong yen is the "biggest risk" to the economy, with the potential to hurt employment and consumer spending and drive more domestic companies abroad. The ministry contends that protecting jobs and helping exporters should be high on the government's economic agenda.
Source:The Nikkei Aug. 21
HANOI (Nikkei)--Corporate Japan will join hands in a 12 billion dollar program by the government to help redevelop cities located in countries belonging to the Association of Southeast Asian Nations, The Nikkei learned Friday.
The effort is due to be announced on Thursday in Vietnam by Economy, Trade and Industry Minister Masayuki Naoshima, who will be there to attend an international meeting. To be dubbed the East Asia Smart Community Initiative, the undertaking will be led by an alliance of 400 private-sector businesses.
With the New Energy and Industrial Technology Development Organization, or NEDO, serving as the head office, the alliance will dispatch a public-private inspection team to Thailand, Malaysia, Indonesia and Vietnam in October. Toyota Motor Corp. (7203), Tokyo Electric Power Co. (9501), Tokyo Gas Co. (9531) and Itochu Corp. (8001) are expected to send representatives as part of the team.
The public-private partnership hopes to begin drawing up master plans for urban redevelopment jointly with local governments by March. They aim to launch projects within five years in such locations as Jakarta, Hanoi and Ho Chi Minh City. The companies are expected to help build smart grids, energy-efficient public transportation systems and water processing facilities by using Japan's green technologies. METI and NEDO plan to provide the technology and funds for the necessary feasibility studies and tests.
Once a project gets the go-ahead, the Japanese government will provide trade insurance and loan 70-80% of the total cost through the Japan Bank for International Cooperation. Tokyo will also consider using its official development assistance program for some of the redevelopment.
Source:The Nikkei Aug. 21
The Office of Commercial Affairs, Royal Thai Embassy in Tokyo, Japan
Source : http://www.depthai.go.th