TT-505 -- Expats Flee Tokyo, e-biz news from Japan

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A weekly roundup of news & information from Terrie Lloyd.

General Edition Sunday, February 15, 2009 Issue No. 505


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

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Three expat-related topics today:


The Japan Times carried an article this Sunday morning
pointing out that yesterday's freak hot weather did indeed
set records in many parts of the country. On Saturday it
was hard to remember that we are in the middle of winter,
when the mercury hit 23.9 degrees in Tokyo, and 26.8
degrees just south of here, in Shizuoka. These are
temperatures normally experienced in late May, early June.
For comparison, the average high in Tokyo in February is
supposed to be 10 degrees and the average low is 2
degrees. The trees in our garden are clearly confused, and
some have started budding weeks early.

The "heat wave" makes us wonder what nature has in store
for Japan during the real summer. Perhaps the terrible
problems being experienced in Australia will be replicated
here in the Northern hemisphere in the coming months --
with droughts and heat for one band of the country while
there is flooding and heavy rains for the other half.
Although today, Sunday, is cooler, the Meteorological
Agency has issued avalanche warnings throughout the
country where it has snowed. Hopefully we'll be back to
winter tomorrow...!


Next, talking of meltdowns, the problems in the international
banking sector is obviously hitting the Tokyo expat
community hard. Although there are no statistics, it is not
difficult to see evidence of the escalating departure of
foreigners as the recession (or is it already a depression?)
gathers pace. Restaurants serving expats are more than
half empty on Friday nights, Roppongi streets are less
crowded, and bars and entertainment establishments are
offering generous incentives to get people in.

Other evidence of the emptying of Tokyo's expats can be found
at the various foreign business and social clubs. Most
clubs have had unprecedented decreases in membership and
one particular major foreign social club is said to have
lost hundreds of members, about 2.5% of its membership, in
a single month at the end of 2008 alone.

[Continued below...]

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[...Article continues]

Of all the vendors supplying the foreign market, perhaps
none is taking the drop in expats harder than the real
estate business. Looking at expat real estate websites,
there is a much larger inventory of listings than normal,
and prices for older apartments and houses have dropped 30%
or more over the last 6 months. See the Ken Corporation
website ( for examples of bargains now
available -- and this is before negotiation.

Of course, if the recession continues much longer, today's
bargains may be tomorrow's over-priced non-negotiable
contracts -- such is the nature of deflation. In any case,
the number of listings show both that people are leaving
the country in droves and also that there is an active
opportunity for those people remaining to at very least
"upshift" for better conditions as their contracts come up
for renewal.

A sector of the community that is conversely making hay out
of the current turmoil is that of relocation firms who
handle the movement of expats back to their home countries.
An article in the Straits Times in Singapore at the end of
November last year highlights the increased volume of
business being experienced by these firms. Since the
Singapore expat scene reflects the trends here in Tokyo as
well, we found it interesting that the article reports
relocation companies there are experiencing double their
normal level of business.

Crown Relocations, which is here in Tokyo as well, had a
25% increase in business through to November and was
experiencing one of its best years ever. Sante Fe, also
here in Tokyo, reported a big increase in moves, with a
further increase expected for Q1 this year (2009).


The biggest reason why the expat population is declining
is because foreign companies are reassessing their cost
structures here. It's hard to justify keeping an expat in
Tokyo when you are cutting senior staff back at
headquarters -- and now that the U.S. government is going
to impose wage caps for the heads of major banks, we can
imagine that expat banker salaries and those of employees
downstream of them will be equally affected. Perhaps we'll
see foreign companies follow the lead of Japanese ones by
offering across-the-board pay cuts rather than simple
slashing of staff.

However, slashing staff is a lot easier conceptually and
in execution -- to hell with the fall-out, and some head
offices are going after the entire operation, not just a
few expats. This seems to have been the case with
Bloomberg, which last week for the first time in its
28-year history laid off a large number of staff. The
layoffs were in the foreign-language (non-English) TV
service around the world. Here in Tokyo, that means that
up to 30 people involved in the Japanese-language TV
service probably got their pink slips.

Rumors in London newspapers are that Bloomberg will cut
about 300 people around its global operations. Bloomberg
tried to put a good face on the action by saying that it
is "shifting focus" and that it is likely start hiring
again at the end of the year. We think this is more a
case of positive thinking than reality. Bloomberg
terminals are expensive, up to US$50,000/year, and we're
sure that there have been plenty of cancellations of late.
Indeed, Bloomberg reportedly lost 4,000 terminal accounts
overnight when Lehman Brothers went under, wiping out at
least 1% of the company's user base.

This "operations pruning" is not just restricted to foreign
companies of course. Readers may recall that Japan Inc.
magazine covered a leading edge Search Engine Optimization
(SEO) company called Sozon some years ago
is important for websites wanting to rank highly on Yahoo
Japan and Google Japan when people search for particular
services and products. Sozon was acquired by ValueCommerce
in 2005 so as to help ValueCommerce provide SEO services to
its massive customer base. Unfortunately Sozon has just
become the latest casualty of the business downturn, and
ValueCommerce has announced that it will be shutting the
company down. The good news is that this and other cost
cutting efforts have pushed ValueCommerce's stock up
around 50% in the last 4 weeks.

The bad news is that Sozon staff will be looking for jobs.


Our Entrepreneur Handbook Seminar is obviously filling a
need in the community right now, as many people look at
their employers and see the writing on the wall. We had a
sell-out audience of 35, and still more people wanting to
attend. So, we have decided to re-run the seminar next
month for those people unable to make it this month. The
new date will be Saturday March 14. Details will be posted
on the website shortly, at:

Lastly, Terrie's Take is proud to be a supporter of The
Japan Helpline. To get help 24 hours assistance with any
problem, whether personal, legal, or financial, any time,
go to and click `help`.

To donate:
Your support keeps The Japan Helpline going.

...The information janitors/


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+++ NEWS

- Fusion buys out Ingenium
- Economy undergoes dramatic shrinkage
- Rakuten operating profits up
- Potential stem-cell treatment for heart disease
- Nikko Cordial retail business for sale

-> Fusion buys out Ingenium

It's great to see strategic moves by local (foreign)
entrepreneurs. Acknowledged M&A maestro Mike Alfant has
made a move to expand from IT alone to general services by
acquiring leading recruitment firm Ingenium. Mark Saft, one
of the two founders of Ingenium, will stay with the company
to manage its operations. Ingenium has clients across Asia,
and with its China operations, Fusion now has coverage of
the whole geographic area. ***Ed: Although we are in the
midst of a terrible environment for recruiters, and no
doubt Ingenium like other HR firms must be feeling the
effects, this acquisition makes a lot of sense for Fusion.
IT is very manpower intensive, so the recruiter will be a
valuable in-house asset. At the same time, Ingenium does a
lot of executive recruiting, meaning that Fusion will hear
about deals during the earliest stages of client
expansion.** (Source: Ingenium website, Feb 9, 2009)

-> Economy undergoes dramatic shrinkage

A Cabinet Office report on the economy due out this week is
likely to show that Japan's economy shrank by a dramatic
10% or more annualized, according to a survey of 24
economists done by Bloomberg News. In fact, if the results
of the last quarter of last year were to be annualized,
the collapse in the economy was probably 11.7%, the worst
figure since the 1974 oil crisis. Exports were down 23.1%
in Q4 last year and the Nikkei 225 fell 32% during the same
period. ***Ed: And now that we have mass firings by major
manufacturers, consumer sentiment can only get worse and
consumption will fall further.** (Source: TT commentary
from, Feb 12, 2009)

-> Rakuten operating profits up

Although Rakuten posted a net loss for the last quarter of
2008 on stock losses steming from its ill-fated takeover
attempt of TV broadcaster TBS, the core business is
booming. The Internet shopping mall company announced
record operating profits for the last quarter of JPY16.3bn
(US$179m), compared to a loss of JPY19.6bn (US$176m) the
year before. ***Ed: In a down economy, value leaders win,
and given that the cost of operating an online store costs
almost nothing and you can have your operations out in the
countryside, low costs = low prices = internet shopping =
no-brainer.** (Source: TT commentary from, Feb
13, 2009)

-> Potential stem-cell treatment for heart disease

Researchers at Osaka University have been able to take iPS
stem cells and use them to improve heart health in mice.
The team grew the stem cells on a sheet of specially
nurtured medium, then layered the sheet on a weakened
mouse heart. The cells grew into cardiac muscle cells and
improved the blood pumping capacity of the heart. ***Ed:
Maybe we'll see heart healing bandages for heart attack
victims in the not too distant future.** (Source: TT
commentary from, Feb 13, 2009)

-> Nikko Cordial retail business for sale

Citigroup has started accepting bids from interested
parties for the sale of its Nikko Cordial retail brokerage
operations. Citi is reportedly looking for a sale price of
JPY300bn. Apparently the offer to sell has been extended to
ten prospective firms, but analysts expect that most of the
bidding action will come from MUFG, Mizuho, and Sumitomo
Mitsui. The Nikkei reports that Nikko Cordial's earnings
are in the black (on an operating basis) and the company
has 2.4m mainly wealthy customer accounts -- making it the
3rd largest broker in Japan.
(Source: TT commentary from, Feb 13, 2009)

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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Interesting piece. Myself and a few colleagues were moved out of Tokyo last month.
But by the way, does the author have a financial interest in Value Commerce?