JIN-149 -- Japan Aghast

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. 149
Wednesday, September 19, 2001


+++ Viewpoint: Japan Aghast
+++ Noteworthy news
- Tokyo Exchange to Investigate bin Laden
- Boosting Bluetooth Test
- Korean Electronic Mall Enters Japan
- M-Commerce to Boost Japan's Web
+++ Events


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+++ VIEWPOINT: Japan Aghast

As a foreigner living in Japan -- and a tall, bearded, highly visible
one at that -- it is perhaps no surprise that I am sometimes stopped
on the street by ordinary Japanese folks. Usually, the interaction is
nothing more than a friendly way to pass the time of day with a
neighbor or local shopkeeper, a few brief words with a taxi cab
driver, or someone wondering if I am lost and whether they can help.
This latter example usually happens when I'm staggering about in some
unknown district of Tokyo clutching a faxed copy of a map or staring
intently at the route sign in a train station.

But since September 11, the several encounters I've had have taken on
a new poignancy, and in every case, the Japanese people I spoke to
made it a definite point to express their deep sympathy with America
and their utter horror and revulsion at the scope and extent of last
week's terrorist attacks.

Japanese media coverage of the events in New York, Washington, and
Pennsylvania throughout the week was, in a word, intense. TV stations
in particular provided an amazing amount of coverage, and were quick
to switch programming to cover not only the breaking events but also
provide interviews with local experts, including pilots, architects,
engineers, and others who could explain some of what was going on and
offer some sort of context.

Japan, it should be remembered, has had its own bouts with mass
casualties in the past few years. Some, like the Kobe earthquake in
1995, were caused by factors under the control of no person. Others,
in particular the Aum subway gas attack, also in 1995, appear to have
sprung from an evil similar to that animating last Tuesday's madness.

Further, it has become clear that Japan is not materially unaffected
by the attacks on the US.

On Monday this week, the central bank intervened in the markets to
support the value of the dollar, the second time since the attack that
Japan's public purse strings were loosened to help maintain

Today, Japan's central bank lowered the official discount rate to 0.10
percent to "show solidarity with the United States and Europe in an
international effort to squelch a possible economic freefall following
the terrorist attacks on America." Of course, buying dollars is not a
move entirely without self-interest, since a weak dollar and strong
yen hurts Japanese exports, regardless of the cause of the drop.
Nonetheless, the motivation is laudatory.

But whether it was remembrance of the intense pain and loss stemming
from Japan's domestic disasters or merely a deep empathy generated by
viewing last week's loss of thousands of innocent lives in real-time,
there is no doubt that the comments I heard from people on the street
here were genuine and heartfelt.

The woman who runs the health food shop in Yamato gathered her son and
husband so all could state how terrible they felt for the US.
Neighbors stopped me in the street to express their sorrow and
concern. One TV station showed a home where someone had restyled their
kamidana (home shrine) to honor New York city victims -- and New York
itself -- by placing post cards and other pictures of the Manhattan
skyline in the center of the shrine.

In short, civilized people everywhere (like the Japanese -- who are
particularly civilized) felt directly targeted, even if they weren't
in New York or Washington. The people of Japan -- the common, everyday
folk who work, go to school, raise their kids, and pay their taxes --
share America's sadness, and its desire to rebuild, overcome, and

-- Daniel Scuka


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** Tokyo Exchange to Investigate bin Laden

Extract: The Tokyo Stock Exchange announced Tuesday it's investigating
whether Osama bin Laden, the suspected mastermind of recent terrorist
attacks in the US, profited from stock trading during the chaos of
last week's events. Bin Laden and his organization could have made a
fortune by selling short shares, as Japanese stock prices fell
drastically following the event. Meanwhile, Kyodo News reported that
19 suspected followers of Laden may have entered Japan shortly before
last week's terrorist attacks in the US.

Commentary: We've heard a lot of rhetoric accusing Osama bin Laden of
masterminding the September 11 terror attacks on the US. While much of
the talk has been, we think, premature, it is at least highly
plausible that bin Laden is involved in some fashion. What has been
missing so far are hard facts. Perhaps the Tokyo Stock Exchange
authorities will be able to supply some.

Source: "TSE Investigates bin Laden Stock Deal," Sep. 18

** Boosting Bluetooth Test

Extract: In November, Nihon Ericsson KK plans to start distributing
town information that links to position information services for
cellular phones, through the short-distance Bluetooth wireless
technology. The company is sponsoring a Bluetooth trial service
jointly with Marubeni Corp. and Handspring Inc.

Commentary: The Bluetooth Launch Trial Web site (see link below)
explains that "BLT" refers to the service, and not the famous
sandwich. The trial will see four service areas, including the
Marunouchi Cafe (see "Urban Refuge," February 2001), Mediage in
Odaiba, a Sofmap shop in Akihabara, and the Hikari bullet train,
equipped with a Bluetooth local access point. In addition to selected
trial participants, passers-by who happen to have a Bluetooth-equipped
computer or PDA at hand can access the service. The trial aims to
confirm what sort of business model works best using Bluetooth, as
well as how well the technology works.

Short-range, fixed wireless networks? We think it's a great idea, and
Japan is a perfect test bed. How so? There's already a similar system
here. The base stations have a range of about 100 meters (around 3x
Bluetooth's 30 meters), the portable access terminals can handle data
and voice, and the networks are hugely popular. We're referring, of
course, to PHS, Japan's other mobile service (i-mode, in contrast,
operates on a far more robust PDC-standard cellular network with base
stations having ranges of several kilometers). There's no reason why
Bluetooth and 802.11b can't evolve into similar success stories.

Source: "Nihon Ericsson, Others to Add Position Info Services to Bluetooth Trial," Sep. 18
Nikkei AsiaBizTech

BLT (Bluetooth Launch Trial Office)

"Urban Refuge: A cafe in the blue chip Marunouchi district that feels
more like J@pan Inc than Japan Inc."

** Korean Electronic Mall Enters Japan

Extract: Interpark Corporation, the operating company of Korea's
largest electronic mall, plans to advance into Japan by year's end. It
will create its own e-commerce site to sell Korean grocery and apparel
items. Interpark's president and CEO Ki Hyung Lee said: "We plan to
invest about JPY120 million per year into the Japanese market. We
intend to challenge Rakuten and other existing EC companies." Rakuten
is the operator of Japan's biggest online shopping mall.

Commentary: Rakuten may be in for a rough time. The pioneer of the
online mall model in Japan has done well during the Internet's initial
growth period, but now others are starting to copy its success. Shares
of Rakuten have hovered slightly above its start-of-year price thanks
to improvement in the performance of group companies. Infoseek Japan,
which was acquired last year, posted its first monthly operating
profit of around JPY5 million in July by cutting costs, and Rakuten TV
has been contributing around JPY12 million in monthly operating profit
from satellite TV ads. But the number of tenants in Rakuten's
principal online mall business also fell for the first time in the
April-June quarter. Perhaps the Koreans will steal away some more?

Source: "Korean Electronic-Mall to Launch Business in Japan; Challenge Rakuten," Sep. 17
Nikkei AsiaBizTech

Note: J@pan Inc magazine will run a major feature on Korean Net
companies coming to Japan in the October issue, due out on Sep. 25

** M-Commerce to Boost Japan's Web

Extract: Cahners In-Stat Group, a US-based research firm, predicts
that Europe is likely to become the largest market for mobile commerce
services, due to its large number of users as well as the advantages
brought forth by 3G wireless technology. Based on its research on
m-commerce using wireless phones, the company expects Japan to become
the second-largest market by a slim margin, although its usage of
mobile commerce services per person will be greater than that in

Commentary: In the May 2001 J@pan Inc, Japan money manager Veryan
Allen wrote: "There is no e-business, there is just business, and
business will continue to be conducted face to face, by smoke signals,
by homing pigeon, by phone, by fax, and -- yes -- by the Internet." We
agree, and can't get terribly excited by researchers' reports of
m-commerce gold to come. Nonetheless, wireless is really huge here
(and, obviously, in Europe) and while all business may, indeed, be
just business, it's important to note that an awful lot of that
business is going to be conducted via mobile in this country.

One recent example of the significance of mobile is Tsutaya Online
(TOL), the electronic arm of nationwide video rental chain Tsutaya.
TOL's revenues (both wired and wireless) for the April-June quarter
were JPY725 million, generating a profit of JPY22 million. TOL never
said that its electronic efforts were intended to be profitable (the
online channels were meant to serve only as marketing, promotion, and
advertising tools), so the black ink must be a pleasant surprise. A
Tokyo-based analyst at Credit Suisse First Boston says that TOL's
model works because they have a "famous, youthful brand that blends
well with the wireless medium."

Source: "M-Commerce to Grow Sharply Through 2005; Europe to Lead," Sep. 11
Nikkei AsiaBizTech

"Veryan Allen's Market Outlook"
J@pan Inc May 2001
An executive summary of where the markets have been, where they're
heading, and how to invest in them.

+++ EVENTS (Advertisement)

** Bluetooth Seminar at WORLD PC EXPO 2001
September 20, 2001, Tokyo

With cooperation from the Bluetooth SIG, Nikkei Electronics will hold
a technical seminar focusing on Bluetooth, the short-distance
wireless data communications technology, for development engineers.
Mr. Thomas Baker, the leading figure at the SIG, will provide the
keynote speech, and persons in charge of drawing up specifications
will give lectures on the details of the high-speed spec for "Radio
Enhancements" and on the specifications for 3G cellular phones drawn
up by NTT DoCoMo and others.

In addition, Sony will provide its perspective on Bluetooth
applications in the near future as a company keen on commercializing
Bluetooth products, and a panel discussion on Bluetooth logo
certification -- indispensable for commercialization of Bluetooth
products -- will be conducted by four panelists from Japan's leading
Bluetooth qualification test facilities (BQTF). Simultaneous
translation (Japanese <--> English) will be provided.

For further information please visit:


** 8th Int'l Web Site Globalization Conference
September 23-25, 2001, New Orleans

Attend the 8th International Web Site Globalization conference on
September 23-25 in New Orleans and hear from European-based
corporations, including Adidas (Germany), as well as from
international country managers, such as Yahoo! Brazil, to learn the
latest strategies in multinational, multilingual content management.

For more information:


** FCC Marketing & Communications Symposium 2001
October 19, 2001, the Tokyo American Club, Tokyo

The Forum for Corporate Communications is proud to announce the FCC
Marketing & Communications Symposium 2001, a one-day event focusing
on targeting different sectors of the Japanese market, with specific
discussions on marketing to women, the Internet/i-mode generation,
youth, teens, the silver market, and the foreign market in Japan.

For more information:
Susy Harrison, Z-CARD Japan, Tel: +813-3560-5387

Exclusive Sponsor: Starcom Worldwide Japan

Official Publication: J@pan Inc magazine http://www.japaninc.com


** Economist Conferences: 6th Roundtable with the Government of Japan
November 29, 2001, Imperial Hotel, Tokyo

"Policy vision & industry action towards a transformed Japan"

Never before has the state of Japan's economy been as critical or as
interesting. You need to attend this highly informative event which
will include the release of an in-depth study of 100 dynamic, newly
listed Japanese companies.

For information, registration, and an EARLY BIRD DISCOUNT visit:


SUBSCRIBERS: 4,403 as of September 19, 2001

Written by Daniel Scuka (daniel@japaninc.net)

Assistance with news compilation:
Richard Ochero (richard@japaninc.com)

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