Raw Japan

Japan’s bulging debt

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.

But with the economy fragile and an election for parliament’s less powerful upper house less than a year away, many wonder if he will.

Support for Hatoyama’s cabinet slipped eight points to 63 percent in a Yomiuri newspaper poll this week, while 85 percent said they’d rather see some campaign pledges broken than a rise in a public debt, already headed for more than 200 percent of GDP this year.

Taking voters at their word, however, could backfire.

“In terms of spending prioritites, it might be possible to prepare public opinion for changes in details in the run-up to the upper house election,” said Sophia University’s Koichi  Nakano. “But it would be risky.

Cheap treat keeps Japan sweet

What is sticky, shaped like a fish and helps Japanese people shrug off the lingering effects of the country’s worst recession since World War Two?

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.

Taiyaki, which means baked sea bream, is a pancake stuffed with a sweet bean jam and served hot and cheap in stalls all over the country.

The name helps. “Tai”, Japanese for sea bream, sounds similar to the word for happiness.

With a price tag of as little as 130 yen ($1.45), the snack, which celebrates its 100th anniversary this year, is making a lot of people happy — including those needing a job as the stalls are easy to get going. 

“Taiyaki has been around from ancient days but I still want to eat one once in a while,” Masako Kano, a 69 year-old housewife queuing outside a new store, told me. “Compared to other cakes, which normally cost around 200 yen to 300 yen, its price is attractive.”

Fancy Corporation recently opened its 45th taiyaki outlet in Kawasaki, just south of Tokyo, saying the cheap snack is as popular as ever in tough times. 

Clubs defy credit crunch

If Japan is struggling to shake off a recession, then clearly nobody has told Tokyo’s party people as dance floors heave and thud to techno-house raves at the city’s clubs.

With summer gone and the nights drawing in, DJ events continue to pack in club-goers, like those of events organiser Phonika, which hosts outdoor parties around a rooftop pool in Tokyo.

Tokyo models, fashion designers, cash-flashing expats and well-connected OLs (office ladies) sip champagne and cocktails overlooking the city, blissfully unaffected by the credit crunch, or simply intoxicated by the brief sense of escapism.

The events have taken off over the past year despite the economic gloom. Restaurants are closing, but queues outside club events snake around corners.

“We haven’t felt the economic pinch,” said Phonika Tokyo’s co-organiser Mark Oxley. “In fact, over the past 12 months numbers through doors have steadily increased.

“In a downturn it’s about catering to demographics. The events are solid, and promotional and VIP offers have proved a good draw, bringing in repeat customers.”

Pet love, vanity help firms survive recession

Japanese consumers are getting more penny-pinching by the day, and they’re probably not going to be splashing out more freely anytime soon after wage earners’ take-home pay logged the biggest drop on record in the year to June and people’s summer bonuses took a hefty cut.

But no matter how bleak things get, there will always be some companies that shoppers — however closely they’re guarding their wallets — don’t hesitate to throw precious money at. 

One such is Unicharm Petcare, a Japanese maker of pet food and animal care products. Its dog and cat food products are selling so well that its operating profit leaped 42 percent in the April-June period, and it raised its forecast for the year to next March.

“Pets are part of the family, so pet owners are unlikely to cut back spending on them just because of a recession,” a company official told me. They certainly are family, and it could be a case of “two legs good, four legs better” because while some family members have to put up with cheap beer-like drinks and outdated clothes, their furry relatives get fed “gourmet” food and other products specially tailored for obese or aged pets.

Meanwhile, young men worried about their oily skin and sweaty armpits are driving up profits at Mandom Corp. The men’s cosmetics maker known for “Gatsby” hair wax and gel raised its six-month profit forecast after it saw sales of both facial paper and antiperspirant jump 30 percent.

“A growing number of young men pay more attention to their appearance and skin care,” said a Mandom official. He added that the market is expected to grow further as “only” a quarter of men in their teens and 20s are using facial paper now.

It’s tempting to be cynical, but the bottom line seems to be that pet-love and vanity can help ride out any recession.

Japan’s long, hot political summer

A campaign that began with apologies and tears by the prime minister may end the same way if, as surveys suggest, Japan’s conservative ruling party suffers a historic defeat in 40 days.

Prime Minister Taro Aso dissolved parliament’s powerful lower house Tuesday for an Aug. 30 election that could well see his Liberal Democratic Party ousted for only the second time since its founding more than half a century ago.  

Aso, the proud grandson of a premier, apologised to LDP lawmakers, and later to the public, for a string of gaffes and policy flip-flops that have eroded support rates for his government and his party since taking office last September.

“Before I speak of my determination and resolve ahead of the dissolution, I first want to apologise,” Aso said.

“I have only one wish: I hope that all of the candidates for the lower house election present today will be back together,” Aso added, tears welling up in his eyes and his chin quivering as he addressed the assembled LDP members of parliament.

“To do this, there is nothing else to do but unite and fight together.”

OT beats date QT

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.

Spring blossoms or just a break from winter?

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.

Real men make lunch

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.

Government stock rescue?

Japanese stocks are sinking towards levels unseen since 1982, sending alarmed government officials scurrying to come up with some way of propping them up.

 Officials are looking at steps to support stocks after the plunge, which has taken the benchmark Nikkei to within sight of a 26-year low hit last October.

That slices into the value of huge share portfolios held by Japanese banks and erodes their capital just when the economy needs them to boost lending.

Among proposals being considered is setting up a stock-buying agency as Japan did in the mid-1960s, which follows another plan for the government to buy up to 20 trillion yen in shares from banks — a plan currently stalled in parliament.

The latest suggestion, in a newspaper on Thursday, is for the Bank of Japan to be pushed into buying stock exchange-traded funds.

Though market players say stock buying by government agencies might help a little, most remain wary with the Japanese market slide part of a global criiss.

“These stock plans may buy a bit of time, but without enacting a decisive economic stimulus package simultaneously they won’t be really effective,” Takahiko Murai, general manager of equities at Nozomi Securities, told me.

Plum blossoms herald spring in chilly Japan

For many, the cherry blossom is the quintessential Japanese flower, its fragile pink petals symbolising the transience of life and its advent in spring an excuse for “hanami” picnics beneath the boughs, where sake and song flow in equal measure.

But some, myself included, confess to a deeper affection for the more modest plum, whose five-petalled white and pink flowers bloom in February, heralding spring despite a winter chill.

This coincides with the first month of the lunar calendar, and the flowers are included as a symbol of new beginnings in New Year decorations, along with the pine for longevity and bamboo for strength and flexibility.

Imported from China more than 1,000 years ago, the fragrant “ume”, also known as Japanese apricot, was a favourite in the poetry of royal courtiers in the Eighth Century.

Unseasonably warm weather last weekend meant plum trees burst into bloom, wafting sweet scent through Tokyo parks and residential streets.

For those willing to venture further afield, one newspaper listed the best spots for viewing the blossoms in all their variety, from palest white to nearly crimson.