Raw Japan

Slices of Japanese business, politics and life

Nintendo’s game face

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After a long spell in the gilded kingdom of record profits, Nintendo, the 120-year-old creator of Mario and Zelda, is again having to dodge barrels such as a high yen and consumers’ eternal quest for new kit. Its returns are slowing, though they are still to be envied with the firm forecasting $5 billion for the year ahead.

 

Last month company President Satoru Iwata told Tokyo journalists that Japan’s enthusiasm for its Wii was waning mildly. But he promised more software titles and said a new console would come when design wizard Shigeru Miyamoto ran out of ideas for the current hardware.

A few years ago around the debut of the Wii, Iwata, only the fourth leader in Nintendo’s history, said that by the time a product hits store shelves, the Kyoto-based firm is already deep in development of its next big thing.

So what is that large gorilla to come? Iwata’s not telling, but after substantially broadening the user base with more women and older game players and helping to untether gaming from merely a sedentary experience, a pot of gold is at stake if ennu-Wii is indeed setting in.

Whither the yen — a withering yen?

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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.

The allure of free money

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People say there’s no such thing as a free lunch. But in theory, a government can have one, some economists and Japanese politicians say, if it wishes to save the economy from deflation and recession. It should just print money and then spend it.

In the past few weeks, some members of Japan’s ruling coalition as well as economists have proposed such a move as the spectre of deflation looms in Japan, now amid what is likely to be its longest economic contraction in modern times.

Kimono trader sees no easy money

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Japan’s best known retail currency trader, a housewife who made 800 million yen ($9 million) on the dollar, euro and pound, warns there is no such thing as easy money and investors must work hard and educate themselves not to get caught out in the volatile market we see these days.

Nicknamed the “kimono” trader by foreign and Japanese media, 61-year-old Yukiko Ikebe says many retail traders in FX margin trading lost big money late last year when Lehman Brothers collapsed and the yen soared broadly on safety bids.

Too soon to see Japan intervening on the yen

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The yen’s surge to a 13-year high against the dollar, record highs against sterling and a multi-year peak against the euro are unlikely to push Japanese authorities into trying to halt the currency’s rise.
Japan hasn’t intervened in the foreign exchange market since March 2004, after a 15-month long, 35 trillion yen ($390 billion) selling spree aimed at preventing the currency’s strength from snuffing out an economic recovery.

And even though the plunge in exports is looking painful, it seems unlikely the Ministry of Finance and the Bank of Japan will step in just yet, although rhetoric about watching currency markets closely will continue and may get louder.JAPAN-ECONOMY/FOREX

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