J@pan Inc Magazine Presents:
T H E J @ P A N I N C N E W S L E T T E R
Commentary on the Week's Business and Technology News
Issue No. 205
Wednesday, November 20, 2002
++ Viewpoint: Foreign Firms Still Bullish on Japan
++ Noteworthy News
- Japanese Stock Exchanges Cautioned by Flight of Foreigners
- Feeding Pets From Your Keitai; NTT-ME To Start Service
- Chiba To Offer Offices at Half Price to Foreign Firms
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++ Viewpoint: Foreign Firms Still Bullish on Japan
Remaining bullish on Japan is hard to do nowadays. Japanese share
prices continue to slip to new post-bubble lows, with private
consumption still remaining weak. Yet foreign firms here are still
keeping their hopes up for future growth, according to the Business
Confidence Survey Autumn 2002 conducted by the Foreign Chambers
Information Group (FCIG).
The FCIG -- made up of foreign chambers of commerce and business
groups in Japan -- in October asked 2,300 foreign firms in Japan about
their business sentiment. The FCIG obtained 386 valid responses (155
American firms, 48 German, 39 Swiss, 38 French, 30 Finnish and 17
Danish). As for Japan's economic situation for the next six months, 43
percent said they expect no change; another 40 percent said they
expect some decline. Only 10 percent expected strong improvement,
while companies that expect strong improvement accounted for less than
1 percent (two firms out of 386).
When these answers were indexed by giving two points for strong
improvement, minus two points for strong decline, and so forth, the
overall sentiment came to -0.42 point, lower than the -0.18 point in
the last survey six months ago.
The negative sentiment was the severest in the financial sector
(-0.75). The sales and trading sector, in which the number was the
highest, was still -0.32.
Yet, don't despair. Despite the fact that foreign firms have a
negative sentiment toward the overall Japanese economy, they are still
positive on their own business growth. Over half of the respondents
said they expect improvement in their profitability over the next six
months. Forty-four percent said they expect "some improvement," while
another 13 percent expected "strong improvement." The overall
profitability index for the next six months came out to 0.5 point. The
sales index for the next six months was 0.61 point.
Forty-one percent said their profitability has actually improved over
the last six months. The profitability index over the past six months
was 0.17 -- a better figure than six months earlier. As for future
plans to withdraw or downsize, only one company out 368 said it was
planning to withdraw; another 19 (5 percent) said they may downsize.
The size of the survey cannot be compared with the Tankan survey by
the Bank of Japan. But, in case you were wondering, the last Tankan
survey in September showed that overall business sentiment among
Japanese companies remained negative.
-- Sumie Kawakami
Business Confidence Survey by FCIG
Tankan 2002 September Outlook by BOJ
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++ NOTEWORTHY NEWS
(Long URLs may break across two lines, so copy to your browser.)
** Japanese Stock Exchanges Cautioned by Flight of Foreigners
In Brief: A working group of the Financial System Council (FSC), an
advisory body to the prime minister, has begun deliberations on the
growing exodus of foreign companies from the Japanese market, the
Asahi newspaper said Tuesday. If the delisting of the Credit Suisse
Group takes place as scheduled this month, the TSE's foreign section
will have shrunk to 34 listings -- a quarter of its peak.
Commentary: Because of the rapid growth in Asian stock markets --
especially in China -- over the past few years, the Japanese stock
market is no longer the center of Asia, if it ever was. The working
group of the FSC is chaired by Keio University professor Kazuhito
Ikeo, an advocate of deregulation. It will be interesting to see what
ideas he comes up with.
The Nikkei Shimbun newspaper (November 9, 2002)
"Firms May Look for New Home away from Nasdaq Japan" from Oct. issue
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**Feeding Pets From Your Keitai; NTT-ME To Start Service
In Brief: NTT-ME announced last Friday that it will start pet-feeding
services in November, using an automated feeding machine with a camera
Commentary: The machine, iSeePet, stores pet food inside. You can
access the machine through your keitai or PC to control feeding
time. You can also monitor how your pet is doing through a camera
inside. This may sound good to pet lovers, but it's expensive. The
initial installation fee is 174,800 yen, plus a monthly fee of
From NTT-ME Press Release (in Japanese)
** Chiba To Offer Offices at Half Price to Foreign Firms
In Brief: In order to promote foreign investment, Chiba Prefecture and
Chiba City will offer office space for foreign firms in December, the
Nikkei newspaper reported on Tuesday. According to the report,
they will offer 9 offices (21 to 53 square meters each) at an office
building near JR Makuhari Station. And the good news is that the rent
will be about half the market price.
From Nikkei Net (in Japanese)
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