Slices of Japanese business, politics and life
The contrast with his predecessor was clear from the TV coverage. All but one of the major channels in Tokyo carried him live. Leading up to his election drubbing last month, former Prime Minister Taro Aso could not always get his pressers carried live even on national broadcaster NHK.
Yet amid the ritual and grand opening statements, one minister gave an already strengthening yen another kick up, while a second pushed down the shares in Japanese banks — both before they’d been officially announced and sworn into their new jobs.
Banking and financial services minister Shizuka Kamei was the first to move markets.
MacroScope is pleased to post the following from guest blogger Ian Bright. Bright is senior economist at ING and winner of the 2008 Rybczynski Prize from the UK Society of Business Economists. He says here that bank lending's future can be seen in Japan's past -- and it is not good for the would-be borrower.
"There is anger in many countries that banks are not lending money. Or more correctly, they are lending less than people want.
from Summit Notebook:
Nomura's takeover of Lehman Brothers' European and Asia businesses is yielding results, and concerns the Japanese bank will struggle to marry cultures is misplaced, according to the man who drove the deal.
from Summit Notebook:
A few years ago, domestic and international financial players were chomping at the bit to lure Mrs. Watanabe's millions of yen or fellow Asians' yuan, won or dollar holdings from their futons or equal-interest savings accounts.
The global financial crisis in the last year has sparked a rejigging of foreign institutions' expectations about Asian wealth and their own ability to attract it, with some opting out of the game altogether.
Mike Smith, the chief executive of Australia and New Zealand Banking Group Ltd, is looking to fill some gaps.
As global banks such as Royal Bank of Scotland Plc and Citigroup Inc reel from losses on toxic investments and take massive government bailouts, Smith reckons he may be able to steal some business in Asia.
Japan, slightly sidelined by the U.S.-UK "special" relationship and the Franco-German alliance at the G20 summit, is keen to stress the country can offer lessons to be learned from the country's banking crisis in the 1990s.
Here's a re-cap of what happened. In 1992, then-PM Miyazawa warned of a financial crisis unless banks were recapitalised using public funds now. Yet no action was taken. Between 1995 and 1997, staggering 5 financial institutions failed, forcing the government to inject public funds into 21 banks in 1998. Then two major banks were nationalised, then the government injected additional capital into 32 banks.
Shares of Japanese banks have taken such a kicking lately that one wonders if they’ll ever be able to walk straight again. Tokyo’s index of bank stocks has dropped 18 percent so far this year, on top of a 43 percent drubbing in 2008.
While not the spectacular decline and fall of a Bear Stearns or a Lehman Brothers, the stock slide is significant because Japan’s banks have little subprime exposure, relatively healthy balance sheets and fairly bouyant core profits.