Bloomberg: Abenomics has chance to reshape Japan

[freedom]

Think have to agree to disagree. So far the only real thing of Abenomics is printing money. The rest are pure myths.

[CityFarmer]

Think have to agree to disagree. So far the only real thing of Abenomics is printing money. The rest are pure myths.

Myths?

Mr. Haruhiko Kuroda, the governor of Bank of Japan, will disagree. It is the first time I heard it is all about myths...

OK, I respect your view. As you said, we agree on our disagreement.

[CityFarmer]

The success of Abenomics, can not rely ONLY on big names, but a majority of the companies in Japan... PM Abe has more to be done...

Japan firms resist govt pressure to lift base wages: Reuters survey

21 Feb 2014 06:22
[TOKYO] Fewer than one in five Japanese companies plan to raise base wages in the coming business year, a Reuters survey shows, a stark sign that Prime Minister Shinzo Abe's stimulus policies are still struggling to gain traction.

Some big names, like Toyota Motor Corp, are expected to raise base pay, but the bulk of companies in the Reuters Corporate Survey say they will at most raise bonuses, which can easily be reversed if the economic recovery lapses.

While bonuses account for an average 17 per cent of a Japanese worker's total compensation, the survey points to diminished purchasing power for many workers.

Only 11 per cent of firms said they plan to lift overall remuneration - bonuses plus any rise in base pay - by enough to cover a 3 percentage point rise in the national sales tax that takes effect April 1.

Abenomics has spurred economic growth and sharp climbs in corporate profits with bold monetary easing and government spending, but economists argue that base pay hikes, along with more capital spending, are key to transitioning to a self-sustaining recovery.

Since taking office in December 2012, Abe has publicly pressured big business to raise wages. Workers at major companies like Toyota, Hitachi Ltd, Nippon Steel & Sumitomo Metal Corp are demanding higher base pay for the year from April.

Toyota is likely to raise base pay for the first time in six years, according to suppliers for the carmaker. Toyota officials told reporters on Wednesday that nothing was decided as negotiations are still underway.
...
Ref: Business Times Breaking News

[CityFarmer]

It need a strong and steady hand to steer a ship as big as the Japan economic. So far as good, and it is moving in right direction...

Japan’s wages rise for first time in nearly two years

TOKYO — Japan’s salaries increased for the first time in nearly two years in January as companies boosted pay for part-timers, aiding Prime Minister Shinzo Abe’s effort to end 15 years of deflation.

Base pay, excluding bonuses and overtime, rose 0.1 per cent from a year earlier, the first gain in 22 months, the Labour Ministry said yesterday. But overall pay fell 0.2 per cent, the first drop in three months.

Consumer spending and industrial output are surging ahead of a sales tax increase next month, fuelling demand for part-time workers. The question for Mr Abe is how quickly tightening in the labour market spreads to full-time workers, helping to generate sustained wage gains that help households cope with higher taxes and rising inflation.
...
http://www.todayonline.com/business/japa...-two-years

[CityFarmer]

Latest update on Abenomics. So far so good, and one step at one time...

BoJ to decide on further stimulus by mid-May, says Abe aide

TOKYO — The Bank of Japan (BoJ) could decide as soon as the middle of May whether further stimulus is needed to keep inflation on track for its 2 per cent target, with the decision weighing heavily on the impact of a sales tax bump next month, an adviser to Prime Minister Shinzo Abe said.

“If the BoJ judges that the economy has fallen off its projected path, it will act appropriately and flexibly, and further easing is possible,” Mr Etsuro Honda said in an interview at the Prime Minister’s Office here on Tuesday. “I believe the BoJ will act if it sees changes in price expectations.”

While Mr Honda said he had become more confident that the economy would withstand the higher levy as inflation expectations take root and price gains accelerate, the first indications of the extent of the blow would appear in May. He said he saw “considerable” room for the BoJ to boost the pace that it buys exchange-traded funds should it deem more stimulus is needed.

If leading economic indicators that reflect outlooks for sales, profits and inflation do not show a big dent as a result of the sales tax increase, further easing would not be needed, Mr Honda said.

The economy is forecast to contract by an annualised 3.5 per cent in the three months from April, when the sales levy will rise to 8 per cent from 5 per cent. Consumer prices excluding fresh food — the BoJ’s main inflation gauge — rose 1.3 per cent in January from a year earlier, the fastest pace since 2008. Bloomberg

http://www.todayonline.com/business/boj-...s-abe-aide

[greengiraffe]

Part of Abenomics?

PUBLISHED APRIL 12, 2014

Tax-free programme in Japan draws individuals to stocks

Equity slump is not putting investors off
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Tokyo
A SPRING downpour last week wasn't enough to stop Norito Nagahama heading to a central-Tokyo brokerage to study up on Japanese stocks.
"I'm here because I need to learn about investment," said Mr Nagahama, 39. "You get little out of bank savings."
The biggest equity slump in the developed world isn't putting Mr Nagahama off either. When he gets his next bonus, Mr Nagahama is signing up for a Nippon Individual Savings Account (NISA) as one of 8.65 million people in Japan projected to do so by year-end.
The programme, which began on Jan 1 and gives tax breaks on share gains, will draw as much as 5.5 trillion yen (S$67 billion) into riskier assets this year, according to Nomura Research Institute Ltd.
The Topix index sank 7.6 per cent last quarter, buffeted by a stronger yen, concern about an April sales tax increase and waning euphoria about Prime Minister Shinzo Abe's policy programme.
With individual investors accounting for less than a quarter of trading on Japanese stocks in March, brokerages say they're optimistic that the NISA accounts will drive a change in attitudes to investment.
The gauge fell 1.2 per cent to a seven-month low at the trading break in Tokyo yesterday, heading for the biggest weekly slump since June.
The government is trying to get Japanese households to move some of their 874 trillion yen of cash and bank deposits into stocks to boost retirement savings and provide companies with capital to revive growth. That's part of Mr Abe's strategy to beat deflation with a combination of stimulus and structural reform.
About 36 per cent of NISA account holders began investing by March 19 at SBI Securities, Japan's biggest online brokerage, which saw accounts jump 66 per cent to 416,000 last quarter.
"It's going really well," said Hiroyuki Ogawa, Tokyo-based general manager at SBI. "While stocks are more popular, more clients are accumulating money in investment trusts. More people are going for long-term, diversified investment."
An average of 1.3 trillion yen is likely to flow into the Japanese share market via NISA each year over the next five years, said Hiromichi Tamura, Japan chief strategist at Nomura's equity research department. That would lift the market by 5 per cent a year, without taking other factors that influence stock prices into account, he added.Bloomberg

[greengiraffe]

PUBLISHED MAY 03, 2014

Japanese household spending at 40-year high
Consumers rushed to beat sales tax hike on April 1; higher wages key to outlook

ON A SPREE
Spending on refrigerators and vacuum cleaners quadrupled, while Japanese consumers also rushed to buy daily necessities like clothes, toilet paper and shampoo, the data showed - a sign that the pent-up demand ahead of the tax hike was broad-based. - PHOTO: REUTERS
Tokyo
JAPANESE household spending soared at the fastest annual pace in four decades in March as consumers rushed to beat a sales tax hike, with early signs backing the central bank's conviction that the economy will weather an expected fall in consumption over coming months.
The Bank of Japan (BOJ) has repeatedly said in recent weeks that the world's third-biggest economy is not in need of fresh near-term stimulus to overcome the pain of the April 1 tax increase.
That view gained further currency with separate data yesterday showing the jobless rate held steady at a nearly seven-year low and the availability of jobs continued to improve.
"Household spending was stronger than expected in March, pointing to considerably high growth in private consumption in the first quarter on pent-up demand ahead of the sales tax hike," said Takeshi Minami, chief economist at Norinchukin Research Institute. "The pullback in demand after the tax hike may be within expectation so far, as the BOJ and the government argue. But we need to wait to see how consumption fares in May and June before making any judgment."
Household spending rose 7.2 per cent in March from a year earlier, data showed yesterday - far exceeding a median market forecast for a one per cent increase, as demand boomed ahead of the sales tax hike to 8 per cent from 5 per cent in April.
It was the biggest annual increase since 1975 and exceeded a 5.8 per cent rise in March 1997, when Japan previously raised the sales tax to 5 per cent from 3 per cent. The rise in 1997 was followed by a one per cent drop in April.
Spending on refrigerators and vacuum cleaners quadrupled, while consumers also rushed to buy daily necessities like clothes, toilet paper and shampoo, the data showed - a sign that the pent-up demand ahead of the tax hike was broad-based.
Household spending is likely to have fallen in reaction to the surge in March, though policymakers hope expectations of improving job markets and higher wages will take the sting out of the tax hike.
Indeed, the jobless rate stood at 3.6 per cent in March, matching a median market forecast and steady from the seven-year low hit in February.
Job availability also continued to improve with separate data showing the jobs-to-applicants ratio rose to 1.07 from 1.05 in February, above a median estimate for 1.06 and matching a high last seen in 2007. "Job conditions are improving steadily," top government spokesman Yoshihide Suga told a news conference, adding that the decline in spending after the tax hike has been within the government's expectations so far.
The increase in the sales tax has sparked worries that consumers will tighten their wallets, threatening the economic recovery that Prime Minister Shinzo Abe has engineered with aggressive monetary and fiscal stimulus.
But anecdotal evidence has shown the slump in spending in April has been moderate, underscoring the BOJ's view that the economy can withstand the pain from the tax hike without additional monetary stimulus.
The key is whether the low jobless rate, which BOJ governor Haruhiko Kuroda has described as nearing full employment, will translate into higher wages to spur a positive cycle of spending, business investment and prices, analysts say.
Total wages rose 0.7 per cent in March from a year earlier, the first increase in three months, though regular pay continued to fall as companies made up for labour shortages with overtime pay or temporary workers.
If wage growth remains slow, big-ticket items may bear the brunt of any downturn in consumption. Automobile sales in April dropped 5.5 per cent from a year earlier to hit the lowest level since December 2012, as the sales tax increased sapped demand, data showed on Thursday. But the drop was smaller than a 15 per cent fall in sales when Japan last raised the tax in 1997.
Overall, yesterday's data supports the BOJ's view that it can hold off on expanding monetary stimulus for now and take more time to scrutinise the tax-hike impact. Reuters

[orangetea]

Dan Loeb’s Latest Bet On Japan Is IHI

http://blogs.wsj.com/japanrealtime/2014/...an-is-ihi/

After Sony6758.TO -0.55% and Softbank9984.TO +1.32%, U.S. hedge fund investor Daniel Loeb’s latest bet on the Japanese market is heavy machinery maker IHI.

While the size of the stake held by Mr. Loeb’s Third Point is unknown, the disclosure of his position was enough to lift IHI’s stock by more than 5% during Tokyo trading on Friday.

In a letter to investors, Loeb said he expects IHI’s key businesses ranging from jet engines to turbochargers to grow significantly on the back of increasing air travel and rising demand for automotive fuel efficiency.

His bullishness on the stock also stems from the potential value of IHI’s real estate assets. The company owns a large land bank and other office buildings and retail facilities in Toyosu, a popular area of reclaimed land in Tokyo where the 2020 Tokyo Olympic village is expected to be built.

Third Point estimates the value of IHI’s real estate holdings in the area to be closer to Y350 billion ($3.4 billion), or more than half of IHI’s current market capitalization at $6.5 billion.

“We see the intrinsic value of IHI at more than Y1,000 per share,” he writes. IHI shares were trading at Y429 on the Tokyo Stock Exchange as of Friday mid-afternoon.

While Loeb’s tone in the letter was largely favorable on IHI, he raised one point that he might bring up again more emphatically in the future: “Should management decide to spin off the property into a separate company that could achieve substantial financial leverage for redevelopment purposes … the company would realize enormous value for shareholders.”

He also urged IHI’s management to focus more on its high-return segments. IHI could not immediately be reached for comment with the office closed during the spring holiday period in Japan.

Last year, Mr. Loeb called on Sony to sell off a part of its entertainment arm.

The Japanese electronics giant later rejected Mr. Loeb’s spin-off proposal although the company promised more disclosure of information on its movie and music businesses.

While Mr. Loeb didn’t comment further on Sony in his latest letter, the stock was among his best performing holdings in the first quarter. Meanwhile, Softbank was one of the top five losers for the period although Mr. Loeb notes the sell-off in Softbank shares was overdone.

[greengiraffe]

http://www.todayonline.com/business/bojs...ing-needed

business
BOJ's Kuroda says options remain if further easing needed

Bank of Japan (BOJ) Governor Haruhiko Kuroda speaks during a news conference at the BOJ headquarters in Tokyo. Photo: Reuters
PUBLISHED: MAY 24, 8:33 AM

TOKYO - Bank of Japan Governor Haruhiko Kuroda said the central bank still has policy options left if it were to ease monetary policy further to fend off risks that may threaten the achievement of its price target.

Kuroda repeated his view that the world's third-largest economy is making steady progress toward meeting the BOJ's 2 percent price target, with core consumer inflation having reached 1.3 percent for four straight months in March.

"But we are ready to adjust policy, be it further monetary easing or something else, if changes in economic and financial developments derail the path toward meeting the price target," he said in an interview with the Nikkei business daily published on Saturday.

Kuroda said the BOJ will not ease incrementally in response to temporary fluctuations in the economy, suggesting that the bank will consider acting again only if it sees enough evidence that doing so is necessary to meet the price target.

He did not elaborate on what steps the BOJ could take if it were to expand stimulus, only saying that this would depend on the type of risks the bank is responding to at the time.

"We will take the most effective and efficient measure to deal with economic and financial developments at the time," he said, adding that there are "no limits" to the kind of options remaining for the central bank.

The BOJ deployed an intense burst of stimulus in April last year, pledging to pump money via aggressive asset purchases to accelerate inflation to 2 percent in roughly two years in a country that has been mired in deflation for 15 years.

It has kept policy steady since then. Some market players have said the BOJ's tool kit has been exhausted after last year's massive monetary stimulus, under which it already gobbles up 70 percent of newly issued government bonds each month. REUTERS

[greengiraffe]

PUBLISHED MAY 26, 2014

Adopt structural reforms swiftly, Kuroda tells Abe

[TOKYO] Japan's central bank chief has forecast victory in his battle against stubborn deflation that has sapped growth for years, but expressed impatience over the pace of Premier Shinzo Abe's policy blitz aimed at jump-starting the long-laggard economy.
Bank of Japan governor Haruhiko Kuroda said stimulus measures had boosted economic activity and produced durable inflation.
But he warned Mr Abe's government needed to step up its campaign for deeper, structural reforms that go beyond monetary policy to achieve more sustainable longer-term success.
Unless Mr Abe acts swiftly, "the real growth rate may be disappointing", Mr Kuroda said in an interview in The Wall Street Journal on Saturday. "That is not good for the economy, not good for the society.
"Implementation is key, and implementation should be swift," Mr Kuroda said.
Mr Kuroda projected confidence that Japan was on track to hit his target of 2 per cent inflation by next year, putting an end to years of deflation.
The bank's stimulus, similar to the US Federal Reserve's asset buying plan known as quantitative easing, aims to inject massive sums of money into the financial system to spur growth and reach a 2.0 per cent inflation target by next year.
This easing is a cornerstone of Mr Abe's policy blitz dubbed Abenomics which called for big government spending, looser monetary policy and deregulation as the prescription for jump-starting growth.
Critics, however, say Mr Abe has yet to follow through on structural reforms, including shaking up labour markets, signing free-trade deals and bringing more women into the workforce. - AFP