The easing of the credit crisis is giving way for a new generation of sovereign wealth funds.

Japan, Taiwan, Thailand, Bolivia, Nigeria, Canada are just some of the places where a public debate has begun on establishing some form of sovereign wealth fund. And even Scotland is now looking at establishing such a fund to manage oil wealth.

China is also close to launching an agency to restructure and consolidate state-owned enterprises -- dubbed by Chinese media as CIC 2.0 in reference to the country's $200 bln SWF China Investment Corp.

Ashby Monk, expert on SWFs and research fellow at Oxford University, says the crisis may have highlighted the importance of having SWFs and having extra cash to deal with the emergency.

"There is this appetite for governments to set up new SWFs. Certain countries have taken considerable utility from having SWFs and a pool of cash during the crisis," he says.

"Coming out of this crisis, we are going to see SWFs increase in the same way central bank reserves increased coming out of the 1997 crisis. All these new funds may be the conduits for a real dramatic ramp-up of sovereign wealth funds."

And the projected growth of the SWF industry is eyebrow raising. The industry is set to double its size to $7 trillion in the next 10 years, according to Deutsche Bank estimates. And there's no doubt that SWF2.0 will help the growth.

Japan is back in deflation, and price falls look like gathering pace as shoppers’ bargain-hunting leads stores to cut prices further to weather the worst retail slump in decades.

Retailers large and small reported hard falls in quarterly profits last week, and the few bright spots were focused on those drawing in thrifty shoppers with their cheap but well-made goods.

Fast Retailing tops the list, as its Uniqlo stores thrive in tough times by selling T-shirts for $10 — that’s cheap here — and other clothing at similar bargain prices. The company is also seeing strong sales growth at its other basic apparel chain g.u.

g.u., the cut-rate sibling of already-cheap Uniqlo, had a low profile for years but shoppers started flooding in after it slashed prices across the board and started flogging $11 jeans and $5 T-shirts this year.

Shoe retailer ABC Mart, which also saw solid growth in its quarterly profits, said its sales of heeled sneakers jumped three-fold after it lopped almost 50 percent off the price-tag back in spring.

Even convenience stores, which had been thought to be pretty well immune to price competition, are starting to cut prices. Seven-Eleven, Japan’s largest chain, has marked down some household items like shampoo recently.

The trend is likely to intensify.

Japan’s second-largest retailer, Aeon Co Ltd, said it planned more markdowns to plug a hole in its sales. The operator of Jusco supermarkets is one of the most aggressive in expanding cheap in-house brands and marking down national brands.

This is deflation in action. The stores hope that by dangling cheap price tags, they will raise their total sales as customers flood in and buy more items each. This puts added pressure on suppliers like food makers and household goods companies, already pushed hard by retailers to bring down their prices. And then shoppers hold back spending in the hope of even cheaper prices.

All this gives the central bank and the government major headaches as they try to break the downward spiral in prices that has dire consequences for businesses, employment and the economy as a whole.

They’ve got their work cut out though, and some retailers aren’t that sympathetic.

An executive at one major retaling group told me he didn’t think his firm’s demand for further price cuts would hurt its suppliers.

“Look at how much profit they make,” he said rather grudgingly.

The vast majority of newly hired Japanese say overtime is now more important than dating if given a choice, reflecting growing job anxiety in the world’s No.2 economy.

A survey by the Japan Productivity Centre, a private think tank, showed over 80 percent of new recruits picking working late over having a date.

Unemployment is at 5.2 percent, the highest since 2003, while there are only about four jobs available for every nine applicants.

“The financial and economic recession and fears of corporate restructuring and bankruptcy are motivating new employees to prioritise work over private life,” the centre’s Tetsu Takano told me.

The trend was more slightly pronounced among women, as 88 percent picked OT over QT, or quality time, with a beau, compared to 78 percent for men in the survey of 3,200 new recruits.

The average age for men and women to marry in Japan is rising, while economic pressures may be contributing to that trend.

But perhaps more office time could lead to at least one mitigating statistic,  an increase in ”shanai kekkon”, or same office weddings.

Photo credit: REUTERS/Yuriko Nakao

The annual shareholders meeting season is in full swing in Japan, and some executives have been dodging fastballs from disgruntled investors.

Quite a few managers are stepping up to the podium with a heavy feeling this year, as irate shareholders offer feelings about dividend cuts and plunging share prices.

The outgoing president of Toyota Motor was one top guy apologising; Japan’s No. 1 automaker expects a second straight year of record, multi-billion dollar losses this financial year.

Executives at Hankyu Hanshin Holdings were also forced to apologise at a meeting last week, but not for the Osaka-based railway’s own performance.

Local media said one incensed investor got up and lambasted the company for the hiring strategy of its hugely popular baseball team, the Hanshin Tigers.

“I don’t know what’s going on - you guys just keep hiring duds,” the man complained.

An executive in charge of the team apologised on behalf of the Tigers, who have their tails between their legs at the moment, sitting fifth in a six-team league.

A Hankyu spokesman was quick to point out that this was the only question about the team, though, while the 17 other shareholders who spoke at the meeting talked mostly about railway services and facilities. He added that there were few questions or complaints about the company’s performance.

I’m a die-hard Tigers fan myself and I share the guy’s frustration, but the quirky questions and comments at some of these annual meetings are odd.

Occasionally, tech geeks stand up to show off their knowledge before major executives at consumer electronics companies. One of the funniest was at a mobile phone shareholders meeting a few years ago when a middle-aged woman was upset because a receptionist had forgotten to give her a box of cakes, apparently standard practice at the yearly meetings.

“This is what I look forward to every year,” she said.

An executive - perhaps in charge of shareholder cake-relations - answered gravely: “We are very sorry to have caused you trouble. We will take care of this matter promptly.”

Photo credits: Toyota President Katsuaki Watanabe/REUTERS Issei Kato, Hanshin Tigers fans/REUTERS stringer

Six years ago when I decided to propose to my Japanese wife-to-be I went to the main jewellery strip in the Ginza district of Tokyo ready to part with two months’ salary for a diamond ring.

The two-month rule was in my head from my years of growing up in the United States where men are conditioned into thinking that this is the price for locking in your lifetime partner.

If only I knew then what I know now.

The fact is in Japan you can get away with spending a lot less - or with not buying an engagement ring at all.

Diamond producer De Beers is widely credited with creating the two-month tradition with its famous “A Diamond is Forever” campaign that began back in 1947.

After a few decades persuading men in America to buy diamonds, it set its sights on Japan.

In 1977, De Beers first aired a commercial telling Japanese men they should drop the equivalent of three months salary — and the suggestion didn’t seem so outrageous at the time with the country enjoying a historic economic boom.

It played the commercial in movie theatres before the movies, aiming to catch couples on dates.

Then the bubble popped in the early 1990s and Japanese salarymen started to be more careful with their hard-earned yen.

Industry data shows that Japanese men who buy diamond engagement rings now spend about $3,000 on average, down about a quarter from 15 years ago. And only about half of them are buying rings at all, down from nearly 80 percent.

In addition to simple economics, experts say the drop-off reflects changing views on courtship and marriage.

Traditionally, Japanese families have exchanged gifts to commemorate a marriage, with the ring sometimes part of the package offered from the groom. Nowadays, a marriage is more likely to be about two people and what they can afford on their own.

The trend underscores the challenges facing Tiffany and other Western brands trying to profit in a shrinking market. But it is also an opportunity for new market entrants like GNH, which is trying to undercut bigger brands by selling rings online, similar to Blue Nile in the U.S.

“There is no doubt the market will get even smaller,” Hiroyuki Watanabe, the head of GNH, told me. Watanabe said his business was still at an early stage.

“I’m not in the red, but I’m not making money either. I’m just getting started.”

Photo credit: REUTERS/Yuriko Nakao

Wedding venue hired? Check. Wedding dress hired? Check. Guests hired? Check.

June’s the big wedding month here in Japan, but even in these tough economic times, instead of opting for a small event, some couples are renting fake family, friends and colleagues to plump up the guest list.

Many in Japan see weddings as a formal event that must be attended by lots of family members, friends and co-workers. At the party, bosses often give speeches, colleagues or friends stage performances, and families formally greet other guests.

But what if you’ve got no one to do that for you?

“We’ll attend the wedding as your friend instead of your friend,” Hiroshi Mizutani, who heads Office Agents, a company in Tokyo that rents out guests, told me.

“Suddenly, a guest might not be able to make it. Or maybe you are concerned about the gap in the number of guests you have compared to your partner. Or, there are many temp workers these days and you may be uncomfortable inviting your boss.”

For  around $200 you can have a hired guest attend your nuptials. Add another $50 and they’ll sing or dance. Tip in another $100 and they’ll even make a suitable speech, perhaps pretending to be your boss.

At one memorable wedding, all 30 of the family, friends and coworkers of the groom were fakes from Mizutani’s company. It was the second marriage for the groom, who wanted to avoid inviting the same guests from the first time around.

The firm gets about 100 wedding requests per year and has some 1,000 fakes available for various occasions, including funerals and training seminars. You can hire a stand-in lover to introduce to your family and false secretaries for those that want to look important.

The key qualification for the fakes is that they do not stand out.

“What’s important is that these are normal people… normal as in they are cheery and clean and look like they have regular jobs,” Mizutani said.

Sometimes not even the marriage partner is aware.

“People are proud and they don’t want to tell their partner that they do not have many friends,” Mizutani said. “The environment is so that people don’t have anyone to invite. It may be that they are lonely and it may also be that the way people work are changing.”

I’m not sure what happens, though, if you meet the same fake at multiple events.

One evening recently, about a dozen stock traders and a couple of reporters including myself met for dinner and drinks at a Japanese restaurant in Tokyo’s glitzy Ginza district.

It was the second this group had come together, and everyone seemed in a good mood initially, chatting away, drinking beer and sake, as well as enjoying the delicately prepared sashimi.

But things soon turned to the harsh realities outside. It’s no surprise that the world’s second-largest economy and those trading in its financial markets have had a rough ride in the turmoil since the collapse of Lehman Brothers last autumn.

The jobless rate hit a four-year high of 4.8 percent in March and the availability of work sank to a seven-year low. In the securities industry, people have even held pink-slip parties at their former watering holes.

“Am I the only person here who’s not wearing a suit and tie?” one man at the party wondered, and he was right — nearly every guy there appeared to be dressed formally.

He then told me about leaving his foreign brokerage recently and switching to online trading to keep up his market skills.

After more food and drink, party-goers started mingling and exchanging business cards as networking has become a matter of career self-preservation.

“I came here not for entirely innocent reasons,” a younger man working for a foreign broker told me jokingly. “You never know what will happen with our jobs in this day and age.”

Even we reporters did our share of commiserating with each other, comparing notes on things like the staffing of our newsrooms, also hit by tough economic times.

As dinner wound down, one man said, “It’s sure nice meeting like this to let off steam in such times,” while another added: ”It’ll be easy to get a cab home as no one takes taxis these days.”

Thinking back to a soaring market almost two decades ago, he said with a faint smile: “It used to be impossible to catch one around here during the bubble economy days.”

It’s official: Japan’s economy shrivelled at a record pace in the first quarter.

Needless to say the 4.0 percent contraction in GDP (an annual rate of 15.2 percent, if you speak American) from January to March was not pretty — especially when you see that the pain has spread from Japan’s big autos and tech factories to the broader economy.

Much has been written about Japan’s heavy dependence on exports from its powerful manufacturers and how the slide in orders from the United States and Europe has forced factories to curb output, lay off staff and slash capital investment.

But that GDP figure is looking backwards to a time we know was bleak for the economy.

Just as the West is looking for signs of “green shoots” of new growth to see if the worst is over, so Japan is looking to see if its economy is now starting to sprout cherry blossoms — the traditional sign of spring in this part of the world.

The good news is that companies are starting to see a tentative pick-up in sales.

A senior executive of Konica Minolta, which makes key parts for LCD TVs as well as its brand name photocopiers, says his firm hit bottom in January and has seen some recovery since then. But he adds it is not really clear yet whether this is sustainable.

The recovery seen in recent months, Shoei Yamana says, is due to companies replenishing their stocks after running them down in a hurry when business turned south late last year.

The real recovery will only come when final-buyer demand for Japan’s cars, TVs and other machinery returns.

“We have not really seen any strength in end-user demand for large-screen TVs in Europe and the United States. If panel makers turn bullish and start flooding the market again, the industry might have to go right back to the inventory adjustment phase,” Shoei Yamana told the Reuters Global Technology Summit in Tokyo.

How well government stimulus efforts in China, Europe, the United States and so on succeed in getting consumers to shop will play a key role here in the short term.

Longer term, Japan’s ageing consumers are unlikely to ramp up spending unless unemployment falls and wages start rising again.

That suggests the fate of Japan, the world’s No.2 economy, will remain in the hands of Toyota, Panasonic and other big exporters for quite a bit longer to come.

Photo credit: REUTERS/Toru Hanai; Graphic credit: REUTERS/Catherine Trevethan

It seems that in Japan, when the economy get’s tough, the men go cooking, and the result is a marketer’s dream in a recession.

Men are turning to the traditional art of making boxed lunches, or bento – compartmentalised boxes with a mix of rice, vegetables and meat dishes.

This is radical stuff in Japan, where legions of salarymen leave it to their partner or mother to make their meals and eat out if there are no females around to cook for them.

But with Japan deep in recession, men are getting domesticated and making their own bento to save the $8-$10 or so they might otherwise pay each day for lunch in a restaurant.

But while the newly frugal males try to save money, marketing campaigns are targeting them to spend the cash they save in new ways, such as cooking classes or a flashy new $25 lunch box with matching chopsticks.

After all, who knows what the other men in the office are cooking up?

Men working at a Tokyo Internet company say they are getting up before dawn to work on their lunches, then compare notes over lunch at a bento club meeting.

Even in the kitchen, it seems traditional male competitiveness still rules.

Photo credits: REUTERS/Yuriko Nakao

Tokyo’s first Pink Slip Party, held this week in the Roppongi Hills complex that used to house Lehman Brothers’ Japan operations, was certainly a success in terms of the number of media organisations that showed up. But whether the event, based on the Wall Street gatherings where laid-off bankers and recruiters network over drinks, worked by Japanese cultural standards was a little hard to tell.

In Japan’s conservative recruitment culture, you don’t usually hear people openly admitting to having been “restructured” out of a job, even amid the current financial crisis.

“There is a sort of stigmatism associated with being laid-off,” said Rajiv Sawhney, a former Lehman Brothers employee in Tokyo now looking to get back into the finance industry. Sawhney was one of only a handful of job-seekers at the party who was willing to speak to me on the record.

“Especially in Japan where it’s so rare for a Japanese company to lay people off, they don’t really want to tell people. They don’t want to network and find out if people can help them,” he said.

Nevertheless, the party attracted a slew of reporters and cameramen from local TV stations, newspapers and magazines. Soichiro “Swimmy” Minami, chief executive of the event’s organiser BizReach, said more than 20 media organisations had come along, which to my mind underlined how unusual the gathering was by Japanese standards.

While reporters and cameramen bustled from one end of the bar to the other conducting interviews, it wasn’t rare to see job-seekers and recruiters standing idle with near-empty glasses in their hands clearly not doing the very thing they were meant to be doing - networking.

Some job-seekers seemed unfamiliar with the culture of networking and were hesitant to approach recruiters. “I’ve never seen this kind of business practice,” said one job-hunter standing alone in the corner of the pink-lit bar. He declined to be identified.

Company recruiters, although enthusiastic about the future of Japanese networking events for their purposes, remained cautious.

Katsu Kuwano, Representative Director of online luxury retailer Gilt Groupe, said “It would be great if we could find good people, but we don’t really know that yet. If there is the right candidate, we’ll come back next time. But if not, then it’s a waste of time and we probably won’t be back.”

Picture credit: REUTERS/Kei Okamura