Slices of Japanese business, politics and life
“I didn’t know about that (the release time). I’m sorry. Don’t make much of a fuss” Japanese Trade Minister Masayuki Naoshima told a TV reporter on Monday, right after he accidentally revealed the GDP figures ahead of their official release.
The minister looked sincerely surprised when informed of the official release time, but the light tone of his comments suggested that he did not fully understand the gravity of the error.
He later offered a more formal apology, and Chief Cabinet Secretary Hirofumi Hirano reprimanded Naoshima for his leak of the market-sensitive data, which showed Japan’s economy grew much more than expected in the third quarter.
How much is too much?
When it comes to Japan’s bulging public debt, no one quite knows, but at about $75,640 for each of the country’s 127 million people, the burden is starting to worry both voters and investors. You can even see it climb in front of your eyes on an unofficial Website.
That’s why some pundits say it’s time for new Prime Minister Yukio Hatoyama to make some tough decisions about delaying costly spending programmes promised in the August election that vaulted
his Democratic Party to power.
The economy is struggling but sales of a traditional, fish-shaped sweet snack are going along swimmingly, thanks to its low price and auspicious name.
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.
Britain's Association of Investment Companies has UK investors who run Japanese equity funds whether they think the general election on Sunday will have a positive impact on the country, which is slowly emerging from recession.
Their answers can be found here, but the consensus was that the Democratic Party of Japan would defeat the ruling Liberal Democrat Party and that this would result in more consumer friendly policy or economic revival through higher living standards.
Financial journalists spend a lot of time surveying market economists ahead of macro-economic data releases to find out how they think the next CPI or GDP number is going to turn out. A poll 20 or 30 economists gives a market median forecast, which will determine how traders react when the data comes out. If the figure beats expectations and points to a strong economy and likely rate rises, the currency will jump, and vice versa.
But how good are these forecasts? Why react if there's no track record for accuracy? Economists have a pretty good feel for how reliable forecasts are for different indicators, but it would easier to have a number that tells us how reliable forecasts are for data such as GDP, jobs data or the CPI?
If it takes two successive quarters of falling GDP to enter a recession, how can a country emerge from recession with only one quarter of growth? In the past week or so, journalists have declared the recession over in France, Germany and now Japan. Of course, most reports rightly ask how long this will last and stress that a genuine recovery is far from certain.
Some people regard the two quarters definition of a recession as arbitrary and a bit silly, something supposedly cooked up by one of Lyndon Johnson's economic advisers to avoid acknowledging a downturn until after the next election.
It's starting to look like the Summer of Love. Two reasons: The recovery is taking on a L-U-V shape globally, and it's going to require huge amounts of love and nurturing to keep growth alive.
L stands for Europe, where slowness to confront deep damage and write down the remaining $500 billion odd in bad bank debt, mean rebuilding will be protracted and painful.
The United States sports a U, bouncing along bottom right. But its financial giants swallowed harsh medicine early and the U.S. has the flexibility to stage an impressive rebound, if not undone by a fast-rising jobless rate at 9.5 percent and heavily indebted consumers.
V stands for Asia (ex Japan), the surprise region showing resiliency, thanks to its rapid Q4/Q1 inventory workdown and huge infrastructure spend by China.
Like the Summer of Love 41 years ago, it is a drug-fueled affair. G20 governments are peddling $820 billion in stimulus this year, equivalent to 2 percent of GDP. Central bankers are spending even more. The Fed has doubled its balance sheet to $2.04 trillion the past 12 months.
Japanese tourists often get a lot of flak for going everywhere in packs. Last weekend, I became one of them.
As part of its efforts to stimulate the economy, the government last week kicked off a two-year discount on the country’s notoriously expensive highway tolls. The pricing system differs between rural and metropolitan areas, but what caught the nation’s attention was the all-you-can-drive toll of 1,000 yen ($10) on regional highways on weekends and holidays.
The yen’s fall against the dollar the past few weeks has been remarkably fast, and calculated from where it is now around 97.70 yen, the dollar has jumped nearly 9 percent this month, on track for its biggest such gain since August 1995.
The yen surged last year as the worsening financial crisis forced investors to unwind risky carry trades – meaning they had to buy lots of yen – under the belief that Japan’s economy and banks were holding up through the storm.