JIN-355 -- Three Cheers for Speculation!

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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, Technology and Cultural News
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Issue No. 355
Wednesday February 8, 2006 TOKYO

+++ VIEWPOINT: Three Cheers for Speculation!

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Yen Mortgages for Women

The Yen mortgage seminar is back with a twist
offering a Japanese-speaking lifestyle seminar
by Resona Bank to Japanese women or foreign
female PR holders.

Date: Tuesday, Feb 28, 2006
Time: 6:30pm (Doors open at 5:30pm)
Venue: The FCC, Yurakucho Denki Bldg., 20F
Cost: FREE! (RSVP required by Feb 24)
For complete details(Japanese only), please go to:
www.japaninc.com/kukan/kukan.htm
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+++ VIEWPOINT: Three Cheers for Speculation!

Konosuke Matsushita, the founder of Matsushita Electric
Industrial Co., Ltd., whose products are world famous under
the Panasonic brand, used to say, "Don't speculate. It's all
right to purchase land on which to build your own house, and
if you think you would like to support a company by
purchasing its stock, then go ahead. Life and management
are not a gamble." It's the sort of admonition you'd expect
from a man who achieved great success through blood,
sweat and tears.

Criticism of the "money game," the popular Japanese term
for speculative investment of funds to achieve high dividends
and high interest rates, has been mounting in the wake of the
"Livedoor shock." Everyone seems to be advising against
get-rich-quick schemes and to be beating the drum for
sweat-of-the-brow hard work, or to be warning amateur investors
they will be burnt if they dabble in stocks. Prime Minister
Koizumi was even asked during a press conference if the
Livedoor scandal was not a result of capitalistic forces
unleashed by his reforms.

The influential "Nihon Keizai Shimbun," Japan's "Wall Street
Journal," offers a corrective to what it views as overemphasis
on the Horatio Alger ethic of pulling oneself up by one's boot
straps, noting in an unattributed piece on February 6 that
"speculation is important for the economy."

Stockholders must be able to sell or buy whenever at their
discretion in order to minimize the risk of price movement,
says the anonymous writer. The existence of many speculators
looking to profit by fluctuations in stock prices spreads the risk.
This is also true of other products. For every person who loses
playing the market, there is someone who avoids losing, the writer
notes.

In the Edo Period (1603-1867) rice merchants in Dojima,
Osaka, actively traded futures to protect sellers against
warfare or bad weather. The world's first commodity exchange
was established in 1730 when the Tokugawa Shogunate, the
feudal government, officially authorized trading in futures
at the Dojima market. Next Edo (now Tokyo) established rice
markets in districts of the city and at daimyo storehouses
in the provinces. These markets traded futures in rice
produced in the Kanto region.

Some historians claim that merchants with experience in
advanced transactions including speculation were one
reason Japan was not dominated by foreign merchants after
select Japanese ports were opened for foreign trade and
residence from 1859. In other words, merchants steeped
in speculation preserved for Japan a modicum of economic
sovereignty in contradistinction to the partial loss of
political sovereignty through the "unequal treaties'"
imposition of extraterritoriality at the open ports.

"A one-sided way of looking at things is dangerous," concludes
the writer's counterargument to the wisdom of the times.
It's the sort of thing you'd expect from a "Nihon Keizai"
writer.

--Burritt Sabin

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ICA Event - Feb 16

Speaker: Yosuke I. Itoh III, Director, CSP and Media Industry Services,
Abeam Consulting LLP.
Title: Japan's Mobile Commerce Boom! A Driver for Marketing
Loyalty Program Consolidation

RSVP Complete event details at http://www.icajapan.jp/
Date: Thursday, February 16, 2005
Time: 6:30 Doors open, buffet dinner included
Cost: 3,000 yen (members), 5,500 yen (non-members),
Open to all - Location is Foreign Correspondents'
Club http://www.fccj.or.jp/static/aboutus/map.php
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SUBSCRIBERS: 31,054 as of February 6, 2006

EDITOR
Written and edited by Burritt Sabin (editors2@japaninc.com)

(C) Copyright 2006 Japan Inc Communications KK. All Rights Reserved.

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