TT-615 -- A Summer of Power-savings and Sweat, e-biz 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, May 29, 2011, Issue No. 615


- What's New -- A summer of power-savings and sweat
- Metropolis Members Club winners
- News -- Joint child custody law passed
- Candidate Roundup/Vacancies
- Upcoming Events -- ICA meeting
- Corrections/Feedback
- News Credits

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This summer is forecast to be a hot one, and if that's the
case then life in the office is going to be miserable --
the threat of power cuts will ensure it is so. Apparently
TEPCO now expects to be able to produce about 53.8GW, about
6GW under the peak power draw experienced last summer
(July 23rd, 2010). As a consequence, things aren't going to
be as bad as we expected six weeks ago, but nonetheless bad
enough that air conditioning usage and work practices are
going to have to alter substantially for the next 3-4

No one really knows just how hard the electricity
conservation measures will hit the nation's GDP. Back on
March 14th, Nomura Securities speculated that if there was
a 10GW shortfall in the TEPCO service area, around a 25%
reduction, then the impact on the Japanese economy would be
around 0.29%. Given that there is going to be a 5-6GW
shortfall, then we can assume the impact will be around
half that. Not huge in the big scheme of things, but given
that human productivity in an office drops dramatically
over 25 degrees, we believe the impact will be larger.
We'll have to wait until Q3 to find out.

What will the power rationing steps mean for you at your
office? The American Chamber of Commerce has demonstrated
some good leadership on this issue (as have other Chambers,
just we have better access to the ACCJ), and the Chamber
executive in conjunction with its Energy & Environment
Committee have put together a powerpoint with various tips
on how to save power and what the government should be
doing. They also arranged a guest appearance by a METI
speaker who explained the actual legal and policy steps
being implemented.

* ACCJ Energy Presentation

* METI Presentation

[Continued below...]

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[...Article continues]

The essence is that big companies are going to be compelled
by law to save at least 15% of last year's power
consumption this year, and smaller companies and homes are
going be given non-compulsory targets. Given that Japanese
communities are very good at supervising public
responsibility activities (think trash separation for
example), we suspect that what is voluntary will only be so
if you're thick-skinned. Otherwise, we'll all be hitting
the targets of at least 15% reduction.

Actually, 15% is a number that keeps coming up in the
media, but the fact is that in our corner of Minato-ku, our
company was told to target a 25% saving and that we have to
show how we intend to do that. Given that we moved into the
office just a couple of months ago, we're not sure how they
intend to measure "savings" but in any case, there doesn't
seem to be a mechanism for punishing us if we don't hit
their targets. But that doesn't remove the pressure that
our staff are feeling in having to devise plans to reduce
energy consumption.

The things we can do, we are doing:
* We have 3-tube overhead fluorescent lights, and will be
removing two of these every second panel and one every
other panel. We haven't scientifically measured how many
lux (lighting brightness) this leaves for employees, but the
general office consensus seems to be that people are
comfortable with this. Luckily we have windows along both
walls, so there is already a generous amount of light in
the office. But if you were underground or tucked in
between two other tall buildings, this may not be an

* We already set our air conditioning thermostats to around
25 degrees in the summer, and it is normal in government
buildings to set the temperature to a sweaty 28 degrees.
This year though, we'll have to set the dial higher, and we
feel sorry for those buildings considering 30 degrees as
the new standard. Will employees work in their underwear?

* We would like to open our windows, but most of them are
fixed, in the style of many modern office buildings, and
the ones that do open only go so far, for safety reasons.
We also have a row of high-set fire windows to release
smoke in case of fire, but although they offer excellent
ventilation the building management won't let us use them
because they are flimsy and likely to break with repeated
use -- harrumph! What's more important, a national
imperative or occasional repairs?

* Seriously, though, probably the biggest heat producer in
our building is computers. We are moving our desktop
inventory down to low consumption laptops since they are
getting so cheap now. Laptops typically consume less power
and of course will allow employees to work partly at home
if we decide to follow suit with some of the big companies
and change our work schedules. Some readers will recall
from Terrie's Take 602 ( that we moved
most of our "heat-pumping" servers to a virtualized set-up
in a data center, and this has very successfully eliminated
the need for a server room and special high-capacity air
conditioning. The effect on our power bill has been
significant, and now we're wondering if we can use that
measure as part of our evidence of power reduction? Either
way, we still have several more servers in-house and these
are being eyed for quick retirement now as well.

Others are going even further:
* Large manufacturing companies are implementing one more
significant power reducing factor, they are going to close
their factories for two week days, typically Thursday and
Friday, and have employees work over the weekend instead.
The idea here is to simply reduce the peak loads on the
electrical grid and thus be more sure there won't be
unplanned power cuts to those factories. This of course
will create an interesting dynamic, in that there will be a
lot more leisure seekers on Thursdays and Fridays, which
may create new business opportunities instead. It will also
mean that public transport needs to be stepped up on
Saturdays and Sundays if the employees are to get to their
places of work on time.

Actually, the idea of working in a hot sweaty office
reminds us of a story told to us years ago about young
Japanese lawyer hopefuls sitting their bar exams. They were
literally locked away in a darkened room in the middle
of summer for three days with no air conditioning. The idea
was that sweating together was a test not only of their
mental skills but also of their stamina and ability to work
under pressure. No wonder the prosecutors win 99% of their

As we've been saying to our overseas friends whenever they
ask how business is in Japan, this is a very resilient
nation. Yes, we'll all be hotter and working in darkened
offices, but apart from the worst days, people will endure
and the nation will get past this summer in reasonable
shape. Ice cream and coke sales will be going through the
roof, super cool biz suits will fly off retailer shelves,
and public swimming pools will do a roaring trade -- so
there will be a silver lining on this particular heat

Just don't be surprised if you see some sweaty office
workers running around virtually in their underwear...! ;-)

...The information janitors/


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+++ NEWS

- Shared child custody legislation on its way
- Australia to Japan for just JPY18,000
- Barclays sees big M&A growth in Japan
- Datacenter business expands rapidly
- Johnson & Johnson looking at big expansion in Japan

-> Shared child custody legislation on its way

The single biggest and nastiest part of the Japanese family
law code is the insistence on a single guardian for a child
in the case of a marriage break up. Sometimes the Moms, but
usually the Dads, never get to see their kids again. Well,
now it looks like Japan will join the 21st century with new
legislation just passed. The main focus of the legislation
is the ability to resume parental rights for a parent
previously banned from contact after being found guilty of
child abuse, however, a side provision is that it will now
allow multiple people or even a company to become a
guardian. ***Ed: Coming hard on the heels of the
announcement that Japan would sign the Hague Convention, we
think this legislation is a "stealth" change designed to
facilitate repatriation and shared visitation rights for
international couples. Just they're not saying that this is
what it's for, because it's too political. All good stuff,
anyway.** (Source: TT commentary from, May
28, 2011)

-> Australia to Japan for just JPY18,000

Did anyone notice the amazingly cheap one-way fares from
Australia to Japan being run by JetStar this last week?
Until last night you could buy a ticket out of Cairns to
Narita for just JPY18,000. That's cheaper than flying to
Okinawa. We don't know what the new prices from today will
be (Guys, you need to update your website), but with prices
like this, the tourists will definitely start returning to
Japan despite any misgivings about the Fukushima power
plant. (Source: Reader tip to TT, May 27, 2011)

-> Barclays sees big M&A growth in Japan

A report from the Nikkei says that Barclays PLC is planning
to expand its investment banking team from 48 to 70 staff
members, riding on what the bank sees as substantial growth
in the M&A of foreign firms by Japanese ones. According to
the firm's head, Bob Diamond, the firm is seeing an
increase in the number of M&A enquiries from Japanese
customers and is sufficiently positive about prospects to
bulk up. (Source: TT commentary from, May 28,

-> Datacenter business expands rapidly

A Nikkei article highlights the sharp increase in corporate
interest in remote data storage, following the Tohoku
earthquake on March 11. According to the article, two major
datacenter players, Sumisho Computer Systems and CSK will
double their facilities in Kansai this year, increasing
between them to 2,000 racks capable of housing up to 60,000
servers. Apparently demand has risen from 40% occupancy
before the quake to an expectation that they will run out
of space before the end of the year. Likewise, NTT West has
12,000 racks in Western Japan. A research report by MIC
Research Institute had estimated that the Japan data center
market would be worth JPY2.16trn in 2015, but that number
is now expected to be significantly higher. ***Ed: Clearly
companies are expecting a big quake to hit Tokyo.**
(Source: TT commentary from, May 28, 2011)

-> Johnson & Johnson looking at big expansion in Japan

Banking, data centers, and pharmaceuticals appear to be the
big plays for expansion in Japan by foreign companies
post-quake, and medical/pharma company J&J is no exception.
The company has announced that it is planning seven product
launches for Japan this year, which after the USA is the
second largest market globally for pharmaceuticals. Given
that the firm has another 11 new products and over 30 line
extensions in the pipeline internationally through to 2015,
that would indicate lots of ongoing activity here in Japan.
(Source: TT commentary from, May 27, 2011)

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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------------ Earthquake Kids Charity Dinner ---------------

The Support Our Kids Charity Dinner & Auction
Date & Time: Friday June 24th, 2011
Doors open at 7:00 p.m.
Program from 7:30 - 10:30 p.m.

Venue: ANA Intercontinental Hotel Tokyo, Prominence Ballroom
Format: Four course seated dinner, beer, great wine and
soft drinks.

Corporate Table-250,000 yen /table plus tax ( 262,500 yen).
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Individual Tickets-15,000 yen plus tax (15,750 yen).

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Tax inclusive price 15,750 yen.

Dress: Business / Business Casual.

Proceeds from the event will go to support orphanages in
New Zealand and Japan and to provide 'Time-Out' home stays
in New Zealand for young Japanese affected by the Tohoku

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Title: Prevent/Detect Workplace Fraud

Details: Complete event details at
(RSVP Required)

Date: Thursday, June 16, 2011
Time: 6:30 Doors open, Buffet Dinner included and cash bar
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Open to all.

Venue is The Foreign Correspondents' Club of Japan



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

*** In TT614 we mentioned that 470,000 foreigners left the
country at least temporarily between March 12th and April
1st, and wondered if they would ever return.

=> Reader Comment:
I was interested in the comments about the outpouring of
foreigners after the earthquake, tsunami, and especially
the continuing Fukushima incident. As an historian I need
to point out that this happening is not at all new. After
the Great Kanto Earthquake of 1923 foreigners streamed out
of Yokohama, where the vast majority of foreigners were
living in those days, taking ship for Kobe and Hong Kong.
It should be noted that it was not until after 1945 the
Tokyo became a major center of foreign population. Until
that time, Yokohama, Kobe and Hakodate were where they
lived and worked. It was the Occupation that opened Tokyo
to foreigners in greater numbers. For those who enjoy
history, a wander through downtown Yokohama, a hike up the
bluff to the remains of one of the destroyed foreign homes,
and a rapid descent on the very road taken by the fleeing
foreign residents (just south of the Yokohama International
School), ought to be enlightening. As someone who now lives
within 10 kilometers of a nuclear power plant located on a
barrier island in Florida, I can feel the pain of what you
are enduring... and live with a certain amount of


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