TT-490 -- Ishihara (Nobuteru, not Shintaro) for Prime Minister, ebiz news from Japan

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.

General Edition Sunday, October 19, 2008 Issue No. 490


- What's new
- News
- Candidate roundup/Vacancies
- Upcoming events
- Corrections/Feedback
- News credits

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The pundits are betting that the Prime Minister, Taro Aso,
will dissolve the Lower House of Representatives and call a
general election at the end of November -- while he is
still enjoying his "honeymoon" with the Japanese media and
the public. According to the Nikkei, he is trying to pick a
date in between the gyrations of the financial markets,
where the electioneering can focus on future issues such as
funding pensions and repopulating the country, rather than
having to deal with voter fears of lost jobs and lost
savings. Good luck to him, because we believe that there
are likely to be some more major derivatives-related
upheavals globally before things settle down into a nice
calm recession.

The betting is that Aso will make his decision by the start
of November, latest. If he doesn't go for it then, we
predict that he'll wait until March, when spring is in the
air and everyone is feeling more positive about the world.
At any rate he has until next September to call an

Right now, Aso's personal popularity is fairly high, with a
public approval rating of around 40% according to media
polls. This speaks well of his image and personality, which
stand in stark contrast to the aseptic image of Yasuo
Fukuda, the previous PM. Fukuda's cabinet approval rating
prior to his departure was just 29%.

Because Aso has to move quickly to lock in an early
election, he has been busy over the last 4 weeks building
his maverick time-for-a-change image through constant
media events such as making bold financial predictions and
pump-priming legislative moves. He has also been playing
the media with character-referencing pushes, such as his
youth voter angle, where we've seen his love of manga,
geekdom, and Akihabara. Apparently a "senbei" (rice
cracker) company even made a product bearing his likeness
and attached the phrase "cool old guy" to it.

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But try as hard as he might, most voters know deep down
that Aso is anything but a breath of change. He is too well
pedigreed for a start, having been born into a wealthy
political family, and he was too close to the LDP excesses
of the 1990's to not be identified with them. He is not a
reformist in the vein of Junichiro Koizumi and despite the show
put on for the public by the LDP last month (September) to
make it look as if Aso had been elected as party president
after a fair fight with the other 4 candidates, the man in
the street saw right through the charade.

In fact, it was business as usual, with the LDP faction
heads deciding who would come out on top. Given that Aso
runs a small faction (6th largest) in the LDP, we presume
that much like Koizumi before him, he was seen as the least
difficult candidate to put in temporarily while the search
goes on for a proper populist replacement. Certainly he
would have been seen as expendable by faction bosses such
as Machimura. Just how expendable will become clear in the
upcoming election.

What the LDP really needs is a Koizumi replacement --
someone with charisma and a populist message, but at the
same time someone who is a bit more manageable and not so
radical. It couldn't have pleased the party much when
Koizumi rose to unprecedented popularity on the political
platform that he would destroy his own party if necessary!
The reason they now need someone so capable to grab the
public imagination again -- is that this person is going to
have to lead Japan and its voters through some very
difficult times, enacting extremely unpopular legislative
changes to raise taxes and drop pension benefits, not to
mention wrestle to reduce the nation's king-sized public

While there is no obvious candidate to save the LDP in the
near future, we think that the September LDP party
presidency race may give us some clues as to what the king
makers in the back rooms are thinking. They have realized
that since it is unlikely and perhaps undesirable to have
another Koizumi, they need to manufacture an appropriately
attractive candidate instead.

Our bet is that the LDP is toying with either Yukiko Koike,
to bring an attractive female to front the party, or
Nobuteru Ishihara, who is also popular with both young
people and female voters. Both of these people represent
the next generation for the LDP, and it was no accident
that they were paraded in front of the media in September,
in the race against Aso. The purpose of their running was,
we believe, not to win against Aso, but rather to condition
the public to seeing them over the next 3 years as viable
candidates. By trying for the grand prize and losing the
first time around, they will become identified over time as
being "battlers" -- a required trait for a culture that
believes people should earn their positions the hard way.

Interestingly, like Aso, both politicians are English speakers
and have studied overseas. Koike apparently graduated from
Cairo University in 1976, while Ishihara went to Elmira
College in New York before coming back to graduate from
Keio University. Both candidates are nationalistic and have
said that if elected they will continue to worship at
Yasukuni -- an indication to us at least that they still
have to kowtow to the old guard in the LDP.

Some things don't change.

Of the two, we favor Ishihara. He's not exactly a chip off
the old block and seems to be able to think for himself.
His Dad, Tokyo governor Shintaro Ishihara, should be
retiring soon anyway, letting Nobuteru make his own
name for himself without being overshadowed all the
time by his more famous pater.

Nobuteru was particularly active in the Koizumi
administration, serving as the Minister of State for
Administrative and Regulatory Reform at one point. Ever
since that post, he has maintained his reformist, free
markets stance. He is also intelligent, coming across over
the media as a rational and normal person, unlike some of
his older colleagues who, if they aren't ranting about
the problems caused by gays and foreigners, instead reek of
back-room fixing.

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+++ NEWS

- Benesse hit by market meltdown
- 10-minute drop-by 'n drip service
- Consumers go bananas over new diet
- U.S. to guarantee MUFG investment in Morgan Stanley
- Wisconsin medical devices company wins Hitachi deal

-> Benesse hit by market meltdown

Normally profitable home study and schooling company
Benesse announced that it expects to post a 37% drop in
consolidated net profit, due to stock market losses in a
subsidiary company. Benesse originally planned to announce
a bumper year, with operating profit of JPY30.6bn
(US$306m) on revenues of JPY208.1bn (US$2.08bn). However,
the shares of its subsidiary firm Tokyo Individualized
Educational Institute (TIEI) dived 60% and forced Benesse
to book an extraordinary loss of JPY7.6bn against that
fall. ***Ed: No word on what caused TIEI shares to fall so
far, but it appears to us that Benesse got sold a lemon at
a high price when it bought the firm last year.** (Source:
TT commentary from, Oct 17, 2008)

-> 10-minute drop-by 'n drip service

Just as we were getting used to swigging potions and
puffing oxygen to alleviate that yuppy fatigue syndrome,
apparently a new service has been set up at the Ebisu Garden
Place Clinic in Tokyo, to give tired workers a ten minute
intravenous drip! We don't know what they put in the drip or
how you explain all the jab marks in your inner elbow, but
apparently it works and the clinic is servicing up to 6
people at its bar-style treatment area. The basic
treatment, which isn't for those of you scared of needles,
costs JPY2,000, while a cocktail of ten other fluid mixes
runs an extra JPY2,000~JPY3,000. ***Ed: We'd love to know
what they are really putting in the drip bags! Caffeine
maybe?** (Source: TT commentary from, Oct 17,

-> Consumers go bananas over new diet

You must surely have read by now that Japan is undergoing a
banana diet craze. It is definitely true that it has become
hard to find bananas to chop into your morning cereal. This
started after one-time salaryman Hitoshi Watanabe posted on
Mixi that his girlfriend Sumiko had put him on a banana
diet and he'd lost 13kg as a result. Now his diet has been
endorsed by a number of celebrities and a book written by
him has become a best seller. ***Ed: Nutritionists are
warning that relying on a single food source is not healthy
-- but, hey, when you're trying to lose that many kilos,
you're probably already unhealthy, right?** (Source: TT
commentary from, Oct 18, 2008)

-> U.S. to guarantee MUFG investment in Morgan Stanley

Mitsubishi UFJ Financial Group (MUFG) has decided to go
ahead with its massive JPY900bn (US$9bn) investment for 21%
of Morgan Stanley, after U.S. government officials
apparently promised to protect the investment if/when the
U.S. decides to include Morgan Stanley in the upcoming bank
bail-out. MUFG baulked on the previously announced deal
after Morgan Stanley shares fell to $10, less than half the
price offered by MUFG just the week before. In addition to
the guarantee, MUFG is now getting preferred stock and a
10% annual dividend. ***Ed: So long as Morgan Stanley
survives, which it looks like it will, this should be a
VERY lucrative deal for MUFG -- creating US$1bn of profits
every year.** (Source: TT commentary from, Oct 14, 2008)

-> Wisconsin medical devices company wins Hitachi deal

Madison, Wisconsin-based TomoTherapy Inc. has announced
that it expects to sign a deal shortly with Hitachi to
start selling the U.S. firm's targeted radiation cancer
treatment systems in Japan. Sales of the leading edge
systems are expected to start at the end of this year.
***Ed: This deal shows that Hitachi's interest in
rejuvenating its product line-up and taking risks on
smaller foreign firms, TomoTherapy is a US$232m company,
with strong IP capability is on-going and real. Good news
for other foreign firms seeking to break into Japan.**
(Source: TT commentary from, Oct 17, 2008)

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

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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

*** No corrections or comments this week, although we did
get some nice compliments about the Nomura-Lehman analysis.
Thank you.

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