TT-710 -- Will Abenomics Work? Ebiz news from Japan

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.
(http://www.terrie.com)

General Edition Sunday, May 19, 2013, Issue No. 710

+++ INDEX

- What's New -- Will Abenomics Work?
- News -- Send Teddy on a guided tour of Japan
- Upcoming Events
- Corrections/Feedback
- Travel Picks -- Cenotaph in Hiroshima, History in Nagasaki
- News Credits

SUBSCRIBE to, UNSUBSCRIBE from Terrie's Take at:
http://mailman.japaninc.com/mailman/listinfo/terrie

BACK ISSUES
http://www.japaninc.com/terries_take, or,
http://mailman.japaninc.com/pipermail/terrie/

-------------------- DELTA AIR LINE -----------------------

STAYING AT SKYMILES PARTNER HOTELS IS NOW EVEN MORE REWARDING.

Delta is offering bonus miles to its SkyMiles® members who stay at
partner hotels between now and May 31,2013. Members who accumulate
2,000 miles by staying at any of the participating SkyMiles partner
hotels will receive 1,000 bonus miles.

The participating hotels include the Hotel New Otani, Hotel Okura, JAL
hotels, Langham Hospitality Group, Mandarin Oriental Hotels Group, Pan
Pacific Hotels, Shangri-la Hotels and Resorts and The Plaza Seoul.

An attractive feature of the offer is that members can earn the 2,000
miles by staying in a combination of hotels. For example, a member
could earn 500 miles in one hotel, 1,000 in another and 500 in a third
to accumulate their 2,000 miles.

Find out more about the offer at:
http://www.delta.com/content/www/en_US/offers-and-redirects/ltos/earn-ex...

More details on how to earn and accumulate miles at each of these
hotels are available at:
http://www.delta.com/content/www/en_US/skymiles/earn-miles/earn-miles-wi...
-----------------------------------------------------------

+++ WHAT'S NEW

In light of the daily onslaught of "feel good" news about Abenomics,
those of us in business are starting to wonder when all the positive
commentary will translate into actual improved sales and earnings in
our own teams. Almost daily we're reading of record earnings at one
Japanese exporter or another, and 10%-30% jumps in consumer purchases
of high-priced cars, apartments, and apparel. But despite all these
apparent customers for luxury goods, somehow our own customers haven't
caught the swinging mood yet, and are still holding back on
long-delayed projects, still beating us up over prices, and still
delaying hiring new staff. So if there is going to be a trickle-down
effect, we're wondering how long will it take.

We think the current economic upsurge is mainly due to: i) exporters
enjoying a temporary respite until either China and Korea react with
devaluations of their own or there is a repeat of the Eurozone
meltdown, and ii) the spending habits of exporters wealthier
shareholders and suppliers. But since exporters only account for 16%
of the economy, and just 15% of Japan's households hold any shares at
all, these very visible players should not be mistaken as representing
the Japanese economy as a whole. Rather, we think that while the top
1% might indeed be feeling wealthier, and 1m people can certainly buy
a noticeable amount of high-end goods, but there's another 126m who
are not seeing anything other than rising prices and instead are
wondering just when things will get better.

Our guess is that it could take longer than Abe actually has to pull
it off. For his government to produce a sustained bull run he needs
more than smoke and mirrors before April next year, when consumption
tax goes up and puts a damper on everything. This means not just
devaluing the currency, forcing the banks to keep offering easy loans,
and ploughing into the TPP talks. Instead, he needs to find a way to
give the core domestic market confidence in the future and in
particular to put more money into the pockets of workers. Japanese
companies are sitting on a pile of spare cash -- as much as JPY270trn
(yup, that's a lot of cash!), but they're not spending this pile on
employees, or for that matter, on the Japanese market. Our guess is
because they don't believe the good times will last.

[Continued below...]

----------------- Upgrade Your Website ---------------------

These days your website is your most visible asset, and one that helps
clients decide whether to do business with you and job seekers whether
to apply. Japan Inc's Web Development Team is proud to announce its
"WEB PARTNERS" program, whereby we create fully bilingual corporate or
B2C websites with as much functionality as you need, plus year-round
support.

Our customers to date include major international airlines,
prestigious sports organizations, property projects, and online stores
for consumer products.

Our program includes:
- Japanese/English website development
- Professional, patient project management
- Creative, eye-catching designs
- Installation, configuration, and modification of core software
(Wordpress, etc.)
- Software development (PHP, mySQL, etc.)
- User training
- Daily changes to the site as an option
- Hosting, security, and backup

WEB PARTNERS is backed by a solid fully-bilingual team with strong
credentials and a desire to please.

Contact: dai.tanaka@japaninc.com for details.
-----------------------------------------------------------

[...Article continues]

And you can't blame them. In the last 20 years, the average Japanese
business owner and their employees have lived in a depressed state.
They're faced with a shrinking market, shrinking savings (a remarkable
26% of households now have NO financial assets), and shrinking job
opportunities (only 30% of Japanese have a traditional full-time
"seishain" job). So it's no wonder that pessimism and caution are
their watchwords. Despite confidence rising for the fourth straight
month to April, a recent government consumer confidence survey
nonetheless found that still 55% of the population are pessimistic
about the future. In particular, 58% are pessimistic about income
growth, which has been oft quoted as the missing "third leg" of Abe's
expansion program. Previous experience such as the short-lived baby
boom of 2006-2007, tells us that the Japanese only start spending, and
reproducing, when they know that they can plan for the future, and to
do that they need more income.

So what we have in our opinion is a classic Catch-22. Business owners
are unlikely to offer pay raises when they can see that there is no
serious infrastructural change going on (Ok, farms consolidation and
TPP may have some effects later). When the government runs out of
steam and money, they don't want to be stuck with higher salaries and
have excess full-time staff that become hard to fire, like they did to
disastrous effect back after the Lehman Shock. Confirming our opinion,
a recent Teikoku Databank survey found that more than 60% of companies
have NO plans to increase wages.

What about those high-profile Keidanren companies that Abe has been
arm-twisting into giving higher base wages and bonuses? Rather than
being first movers in an altruistic pay-forward movement, we have
heard that in fact many of them are instead arm-twisting their
downstream vendors to reduce costs to make up the difference -- thus
pushing wages deflation further down the pipeline. This is Abe's real
challenge -- how to break the bullying and other entrenched bad
behavior in the nation's interdependent groups. In the end, it may be
that only a war or external energy threat that will change the
nation's systemic business "sclerosis".

Nonetheless, Abe has shown that it is possible to jolt a moribund
market into life again by more superficial means, if you offer a
radical enough local medical procedure. Since we already know that
Japan is unlikely to be able to devalue its way below the
manufacturing costs of China, Korea, and other countries in Asia,
rather than simply earning respite for its top-rank producers (who can
still compete at almost any price), Abe needs to choose business
sectors that can provide the nation with a future, then do much the
same thing for those sectors as he has done for the stock market --
pump in loads of cash and offer incentives that cause capable business
owners to start co-investing. As a small taster, we're already seeing
this with the solar cell market thanks to the feed-in tariff
legislation introduced last year. Simple legislative change -- major
investments and economic benefits.

What would these favored sectors be? Anything that would take
advantage of Japan's current negative demographics, geography, and
population and thus where a shakeup would be politically acceptable.
In particular, Japan needs to move on from focusing and supporting
manufacturing behemoths alone to instead emphasizing intellectual
property and expertise. Here are some possible game changers -- this
is by no means an exhaustive list:

1. Radically increasing the population of Asian students in Japan, one
million by 2015 would be a good number, and having them learn from
world-class faculty (yes, this implies foreign staff alongside
Japanese colleagues). Those students should then be allowed to work
for 2-3 years after they graduate, so long as they learned Japanese
while studying. Japan is safe, relatively cheap, and has an abundance
of under utilized schools and universities. Put JPY100bn into this
sector and just watch the frenzy of economic activity that would
follow. A secondary strategic benefit would be lots of bilingual,
connected trading partners as these students return home.

2. Core changes to how universities get funding for research and
compulsory commercialization of that research. Specific sectors should
be chosen and favored -- regenerative and geriatric medicine are
obvious ones -- and like the bond market, the government should seek
out and flood 1,000 qualifying research groups with JPY1bn 10-year
minimum funding projects. There would be a compulsory 20% of positions
allocated to foreign experts so as to ensure best of class
input/output, and funding would be tied to commercialization
milestones.

3. Cool Japan is a good concept but lousy in how it is being
haphazardly executed. The government needs to wrap all of its organs
and efforts into a single coordinated plan, and apply a JPY100bn
outlay to mostly small players, not the big boys looking to feed at
the trough. More than 80% of Japanese work at small companies and they
need to be part of any major grassroots push, otherwise innovation
will continue being stifled.

4. Full privatization of aged care except for those who are
means-tested. Yes, this is a bit radical, but we suggest it because
old people own most of Japan's wealth and because they are either
unable or unwilling to part with it, even as they draw heavily on the
nation's health and aged-care resources. Through marketing and
incentives, the government needs to change retirees' sense of
entitlement and at the same time open up the sector. Regulatory
exemptions on facilities ownership, construction, health care rules,
research, and long-term insurance products could make this a huge
business that could be exported later.

The question is, does Abe have the stomach to make really meaningful
changes to unleash a domestic investment spree that will have
long-term benefits for the economy? He's done a good job of ramming
through the TPP negotiations in the face of protest by the JA/farmer's
lobby, but farming isn't Japan's future, and besides he can placate
them with cash. Rather, he needs to go after even more intransigent
self-interested sectors in order to make a real difference -- such as
education and health. We think he has a 9-month window of opportunity
between the Upper House elections in July, which the LDP is likely to
win, and March 2014. We hope he won't squander this opportunity and
instead go deep in making changes. Unfortunately, based on past LDP
and Abe performances and the intransigence of the established players,
we'd have to cast our ballot with the 55% in the consumer confidence
survey mentioned earlier, and say that we're still pessimistic.

...The information janitors/

***------------------------****-------------------------***

----------------- Partial Office for Sub-let --------------

Modern open-plan office used for incubating small
international/start-up companies has a recently vacated space for a
group of 3-5 people. Located just 200m from Roppongi Hills. JPY275,000
including furniture (desks and chairs), or JPY250,000 if you bring
your own. Internet included on common (unsecure) connection. Separate
charges for utilities, phones. Minimum 6-month contract. Deposit
required. We can also supply bilingual (English-Japanese) back office
services, such as HR and accounting, business mentoring, technology
outsourcing, and other assistance as required.

For inquiries, contact terrie@lincmedia.co.jp
-----------------------------------------------------------

+++ NEWS

- New 26.5MW solar plant in Oita
- Tokyo hotel rooms almost full
- Huge data leak at Yahoo Japan
- Send Teddy on a guided tour of Japan
- Japanese IBs raking it in (shame about the foreigners)

=> New 26.5MW solar plant in Oita

Solar energy company JGC has officially opened its new 26.5 MegaWatt
solar power plant in Oita City, Oita-ken, this week. The facility is
sited on an unused factory lot owned by Nissan Motor and produces
enough electricity annually to power 9,000 households. The project
cost JPY8bn, JPY6bn of which came from local financing. Presumably due
to the financing option, Oita has several other major solar plants
under construction in the same area, in the waterfront industrial
zone, and is expected to become a major player for solar power in
Japan. (Source: TT commentary from e.nikkei.com, May 16, 2013)

http://e.nikkei.com/e/ac/tnks/Nni20130516D15HH033.htm

=> Tokyo hotel rooms almost full

Average occupancy rates at Tokyo's hotels rose a significant 4.4% in
March, to 87.1%, the highest level in 6 years. Apparently the biggest
factor is a sudden surge of foreign tourists being attracted to the
city by the much lower yen, as well as significantly more business
travellers. As a result, in hotels such as the Royal Park, the ratio
of foreign guests to Japanese rose from 30% in January to 40% in
February. Spending per room is also up an average 10% at some hotels.
(Source: TT commentary from e.nikkei.com, May 16, 2013)

http://e.nikkei.com/e/ac/tnks/Nni20130515D1505A01.htm

=> Huge data leak at Yahoo Japan

There were rumors of a large customer data leak at Yahoo Japan several
weeks ago, but the company is now fessing up that as many as 22m user
IDs may have been stolen by hackers. The company is still not saying
whether the user database was actually compromised, but are admitting
that it is a possibility (meaning, it's probable). Apparently there
were no passwords in the compromised file. ***Ed: But knowing a
definite User ID means that hackers have an easier job trying to crack
their associated passwords. Making 2 attempts a day x 22m accounts
means at least some accounts will be compromised.** (Source: TT
commentary from japantimes.co.jp, May 18, 2013)

http://bit.ly/Z3ecuD

=> Send Teddy on a guided tour of Japan

Think you've heard it all? How about a travel agency that specializes
in taking your stuffed animals on guided tours of Japan? Well, there
is such a company. It's called The Unagi Travel Company, and for
JPY2,000 plus postage (for shipping Big Ted and Little Ted to Japan),
your stuffed animals will be posed and photographed enjoying
themselves at Asakusa Kannon temple, a Japanese restaurant, and other
favorite tourist spots in Tokyo. For JPY5,000 they will get their own
mini-futon and chilled beer at an onsen...! The company is offering
4-5 tours a month, and is accepting stuffed toy travellers from all
over the world. ***Ed: Of course the toys are mailed back after
they're done, along with all the photos to prove their travels were
authentic.** (Source: TT commentary from cbsnews.com, May 17, 2013)

http://cbsn.ws/13Czpv4

=> Japanese IBs raking it in (shame about the foreigners)

This Businessweek article gushes over how Japanese investment banks
have been pulling in record amounts of income thanks to the recent
stock market surge. Apparently most companies have tripled sales of
equities, hitting JPY1.7trn in the first 5 1/2 months of this year,
compared with the same period in 2012. Corporate bond issuances are
also well up, with JPY3.3trn raised this calendar year to date, the
best showing since 2009. Higher volumes of trades mean higher
commission fees, and Nomura Holdings posted its best Q1 profit in
seven years. ***Ed: In the meantime, all those foreign banks who
radically cut their equities teams two years ago must be regretting
having taken such huge haircuts. The question they must all be facing
now is whether this bull market still has long enough to run that it
makes sense to hire back in some equities staff?** (Source: TT
commentary from businessweek.com, May 16, 2013)

http://buswk.co/113iblf

NOTE: Broken links
Some online news sources remove their articles after just a few days
of posting them, thus breaking our links -- we apologize for the
inconvenience.

***------------------------****-------------------------***

+++ CANDIDATE ROUND UP/VACANCIES

=> BiOS, a leading bilingual IT services and resourcing company, is
actively marketing the following positions for customers setting up or
expanding in Japan, as well as other employers of bilinguals.

** HIGHLIGHTED POSITION

BiOS is urgently looking for an IT Service Delivery Manager with
experience delivering IT infrastructure support services to global
clients, at the client’s office in Ota-ku. The candidate will be
responsible for client-facing tasks including project management,
service management, pre-sales/sales, of IT services including service
desk, data center, server/network system support, etc. to a global
clients, as well as managing internal team members, project budgets,
etc. You will also be responsible for transitions of multinational
projects.

Due to the technical nature and demanding work environment, this
position is suitable for someone with solid experience in IT project
management/service delivery management, preferably in multinational
and large-scaled IT projects. In addition, since this role requires
direct communication with bilingual staffs and clients in English and
Japanese, fluent English and Japanese will be required.

Remuneration is JPY6m - JPY8m plus commission, depending on your
experience and skill level.

** POSITIONS VACANT

- Office Infrastructure Support Engineer, global IT services provider,
JPY4M - JPY6M
- Inside Sales Representative, global licensing services provider, JPY
3.5M - JPY4.5M
- HR/Office Manager, global licensing services provider, JPY 5M - JPY7M
- Desktop Support Engineer, global IT services provider, JPY3.5M - JPY4.5M
- Cabling Engineer, BiOS, JPY3.5M - JPY4M

Interested individuals may e-mail resumes to:
tomohiro.kimura@biosjp.com. Check out the BiOS web page for other
jobs: www.biosjp.com/careers.php.

** BiOS Job Mail

Every 2 weeks BiOS sends out a regular communication to its job
seeking candidates, called BiOS Job Mail. Every edition carries a list
of BiOS’s current and most up-to-date vacancies, with featured entries
containing a short job description and every job being linked to the
main entry on the BiOS home page. Regardless of whether you are
unemployed and searching, thinking about a career change, or just
curious to know if there is something out there that might suit you
better, the BiOS Job Mail newsletter is an easy and convenient way for
you to stay informed. If you would like to register for the BiOS Job
Mail, or to find out more, please email tomohiro.kimura@biosjp.com.
-----------------------------------------------------------

***------------------------****-------------------------***

+++ UPCOMING EVENTS/ANNOUNCEMENTS

-------- Inaugural VCLP conference - VC Investment --------

The inaugural VCLP event is for at foreign and local institutional and
private investors who are interested in networking with leaders in the
Japanese VC industry. Guests already signed up include the senior
management of some of Japan's largest VC funds.

You don't need to be an investor to attend -- government observers,
technology experts, start-up financial personnel, and others
interested in the VC space are also welcome. The program will showcase
how recent developments in incubation and VC in Japan are changing the
way investments are being made and subsequently affecting the flow of
companies able to do future IPOs and trade sales. This will be useful
if you are looking for alternative investments outside of ordinary
public equities.

The speakers include:
* Ikuo Hiraishi, a leading seed stage venture capitalist in Japan.
Having done multiple startups, his Sunbridge Global Venture entity
invests and incubates companies with global ambition.
* Alon Lifshitz, a leading early stage venture capitalist in Israel.
He is also the CEO of SalesGate International, a global business
development consultancy that helps major firms in Europe and Japan.
* Tom Sato, an international Business Development expert, serial
entrepreneur, and currently the Japan Representative for Credorax Inc.

For more information on the program, the speakers, and to reserve a
place at VCLP, please go to http://vclp.peatix.com (scroll down for
English).
-----------------------------------------------------------

---------------- Start a Company in Japan -----------------

Entrepreneur's Handbook Seminar 25th of May, 2013

If you have been considering setting up your own company, find out
what it takes to make it successful. Terrie Lloyd, founder of over 17
start-up companies in Japan, will be giving an English-language
seminar and Q&A on starting up a company in Japan.

This is an ideal opportunity to find out what is involved, and to ask
specific questions that are not normally answered in business books.
All materials are in English and are Japan-focused.

For more details: http://www.japaninc.com/entrepreneur_handbook_seminar
-----------------------------------------------------------

------------------- ICA Event - May 23 --------------------

Title: ICA Spring Networking Party

Details: Complete event details at http://www.icajapan.jp/
Date: Thursday, May 23, 2013
Time: 7.00pm Doors open till 9.30pm,
Cost: 3,700 yen (members), 4,500 yen (non-members), open to all.
Includes open bar (beer, wine, soft drinks) & multitude of food. No
sign ups at the door!!!!!!!
RSVP: RSVP by 5pm on Friday, May 17th

Venue is Bar Del Sole http://www.delsole.st/store/roppongi/access.html
-----------------------------------------------------------

***------------------------****-------------------------***

+++ CORRECTIONS/FEEDBACK

In this section we run comments and corrections submitted by readers.
We encourage you to spot our mistakes and amplify our points, by
email, to editors@terrie.com.

=> No new comments this week.

***------------------------****-------------------------***

+++ TRAVEL DESTINATIONS PICKS

=> Memorial Cenotaph, Hiroshima

Visiting the memorial sites in Hiroshima is an absolute must for any
traveler in Japan. It’s a trying and moving experience that will
certainly change you forever. The monuments and sites are a call for
peace and mourning for the victims lost in the atomic bombing in 1945,
at the end of World War II. It’s a trip that everyone ought to make at
least once in their lives.

Among the many sites in and around the Hiroshima Peace Memorial Park
is the Memorial Cenotaph, a large, saddle-shaped concrete structure
located between the Peace Memorial Museum and the A-Bomb Dome. In case
you're wondering, a cenotaph is a monument in honor of someone whose
remains are in another location. The Memorial Cenotaph’s shape
represents a shelter for the souls of the victims of the bomb.

http://en.japantourist.jp/view/memorial-cenotaph-in-hiroshima

=> Hollander Slope, Nagasaki

Nagasaki was international well before Tokyo, Yokohama or Kobe. The
city's rich foreign heritage is apparent wherever you go. The former
"foreign settlements" in Nagasaki's Higashi-Yamate, Minami-Yamate,
Oura and Dejima districts, established in 1859 when Japan was opened
to the world after centuries of isolation, are places steeped in
history. They tell the stories of those Western settlers, mainly
merchants and diplomats and their families, who lived here and often
became successful in business or influential in politics.

Although this hillside is called "Hollander Slope", it was not just
Dutchmen who lived here but people from a great number of countries.
There is a little museum in one of the buildings and another building
houses a cafe. The cafe's terrace is a nice open-air place to sit down
and have a coffee after a walk up the slopes.

http://en.japantourist.jp/photos/hollander-slope-in-nagasaki

***------------------------****-------------------------***

***********************************************************
END

SUBSCRIBERS: 7,627 members as of May 19, 2013
(We purge our list regularly.)

+++ ABOUT US

STAFF
Written by: Terrie Lloyd (terrie.lloyd@japaninc.com)

HELP: E-mail Terrie-request@mailman.japaninc.com with the word 'help'
in the subject or body (don't include the quotes), and you will get
back a message with instructions.

FEEDBACK
Send letters (Feedback, Inquiries & Information) to the editor to
terrie.lloyd@japaninc.com.

ADVERTISING INFORMATION
For more information on advertising in this newsletter, contact
ads@japaninc.com.

SUBSCRIBE
Get Terrie's Take by giving your name and email address at
http://www.japaninc.com/newsletters/free_sign_up, or go straight to
Mailman at:
http://mailman.japaninc.com/mailman/listinfo/terrie

BACK ISSUES
http://www.japaninc.com/terries_take or,
http://mailman.japaninc.com/pipermail/terrie/

Copyright 2013 Japan Inc. Communications Inc.

----------------- Japan Inc opens up Japan ----------------

J@pan Inc authoritatively chronicles business trends in Japan. Each
posting brings you in-depth analysis of business, people and
technology in the world's third largest economy.

Visit www.japaninc.com for the best business insight on Japan available.
-----------------------------------------------------------

______________________________________________

_______________________________________________
Terrie mailing list
Terrie@mailman.japaninc.com
http://mailman.japaninc.com/mailman/listinfo/terrie

Newsletter:

business