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.
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.
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.
Japan’s salaried workers may have an image as corporate drudges, but some are turning economic angst and political ire into poetry for a competition.
“My motivation, falling in tandem with steps to cut corporate costs” is one entry in the contest for “Best 10 Senryu”, a type of humorous verse similar to 17-syllable “haiku” but without references to nature or the seasons.
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.
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.
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.