TT-656 -- Alcoholism in Japan, 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, April 01, 2012, Issue No. 656


- What's New -- Alcoholism in Japan, ebiz news from Japan
- News -- Pending earthquake could be severe
- Upcoming Events
- Japan Business Q&A -- Employee death expenses
- Corrections/Feedback -- KVH as a major DC player
- News Credits

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Here we are on April 1st and still the cherry blossoms are
not out yet. After a long coldish but not unbearable
winter, we've been hanging out and hoping for a nice spring
day to spread out the groundsheet, relax under the blooms,
and pop a few cans of beer, sake, or shochu. Maybe next

In heading out to the local park, riverside, or cemetery
(you can find excellent blossom viewing spots in Aoyama
Cemetery), we will be joining millions of others across the
country, who look forward to the comradery that comes
from getting tipsy next to a group of unknown neighbors
doing the same thing. After a couple of hours, it's not
unusual to make new friends, enjoy their food, and swap
yarns and name cards, all as white and pink blossoms
float gently to earth on the spring breezes.

Even this Saturday, Yoyogi Park was packed with parties
hoping to catch the first blossoms. They were disappointed,
but not for long, as the alcohol kicked in and turned the
whole 134 acres into a jolly place. It's at times like
these that you can see the dichotomy of Japanese values,
where normally buttoned-down people release the pressures
in occasional public drunkenness. Those who have gone a bit
too far are still tolerated as they mess up the sidewalks
and toilet areas.

Watching some of the partiers in the park, though, we
started thinking about alcoholism and just how bad it is
in Japan.

[Continued below...]

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[...Article continues]

If you read the anti-alcohol stories that come up in the
news media from time-to-time, you might imagine that Japan
is a nation of alcoholics and the business culture of going
out drinking to get to know colleagues and customers better
is ruining the health of yet another generation. And it is
true that there could be as many as 4m alcoholics in Japan.
However, looking at the statistics, while Japan may have
alcohol substance abuse problems, it is not nearly as
severe as some other nations with similar economies.

We turned to the WHO 2005 figures in their 2011 Global
Health Observatory report and compared the drinking habits
of Japanese, North Americans, and South Koreans. The
figures for South Korea are really quite eye opening. In
2007, the per capita consumption of alcohol in Japan was
around 8 liters of pure alcohol per year, versus 9.4 for
the USA, and 14.8 for South Korea. Since the South Koreans
drink far more hard liquor than the Japanese or Americans,
they also have a far higher rate of disease and death
because of alcohol.

WHO says that the rate of alcohol use disorders was 2.25%
of Japanese men, and 0.13% of women, while in the USA it
was double that number, at 5.48% and 1.92% respectively. In
South Korea, an astonishing 13.1% of men but just 0.41% of
women had problems with alcohol. The death rate by liver
cirrhosis is also very telling. In Japan in 2005 it was
11.9 men and 3.6 women per 100,000 people. In the USA it
was 13.5 and 6.1, and for South Korea it was 33.1 and 6.9
respectively. In other words, Korea has almost 3 times more
people dying from alcoholism than Japan does.

We can think of several reasons why Japan has fewer
terminal alcoholics than some other developed countries. One
of these is rather interesting, comprising a mutated
enzyme, aldehyde dehydrogenase, which helps to metabolize
alcohol. For some reason, Chinese and Japanese populations
have a high incidence of the mutated enzyme and therefore
get drunk easily and demonstrate exaggerated aspects of
drunkenness with even a small amount of consumption, such as
increased blood flow to the face, raised heartbeat,
headaches and nausea, and heavy drowsiness. These effects
of course mean that Japanese drinkers tend to stop much
sooner than, say, people from European, Polynesian,
Native American, and surprisingly, Korean ethnic groups,
whose enzyme is still intact.

You can find more about the Chinese-Japanese versus Korean
linkage to mutated aldehyde dehydrogenase genes by looking
up the research of one Dr. Ting-Kai Li, a professor of
medicine and biochemistry at the Indiana University School
of Medicine in Indianapolis.

A second reason for the lower rate of alcoholism is
probably related to the type of alcohol that Japanese drink
compared to other nations. According to WHO, in 2005,
Americans drank 53% beer and 31% spirits as a share of
overall alcohol consumption, and the South Koreans drank
18% beer and a massive 81% spirits. The Japanese on the
other hand drank 22% beer, 42% spirits, and 33% "Other",
where "other" refers to sake and other fermented beverages
that can be considered types of wines or light beers.

Indeed, sake is considered by some to be healthy for you,
similar to partaking in moderation red wine by the French.
Yuji Matsumoto, the first Master Sake Sommelier in the USA
and one-time President of the Sake Institute of America,
reckons that sake inhibits cancer formation, due to the
presence of a lymphocyte created during the lees pressing
process, known as sake kasu. He also describes the
benefits of sake in reducing the incidence of cirrhosis of
the liver, arteriosclerosis, cardiac infarction,
osteoporosis, and senility. You can read more about his
theories here:

Anyway, it's one of Japan's three main drinking seasons,
the other two being harvest time in August-September and
year-end in December, so we encourage you to turn a blind
eye to the excesses and understand that mass drunkenness in
the park is not necessarily an epidemic. We also note, for
anyone recently arrived in Japan that this country has one
of the world's strictest laws on drunk driving, and that
essentially driving with any amount of alcohol in the
blood is illegal. By "driving" we also mean human-powered
vehicles such as bicycles and probably skateboards,
although we don't personally know of anyone who was
arrested for cycling after a Hanami party... :-)

...The information janitors/


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+++ NEWS

- Pending earthquake could be severe
- Japanese corporate taxes lower than in USA
- Ocean-based windmills become an option
- Japan may shoot down N. Korean missile
- Start of a bull market for Japan?

-> Pending earthquake could be severe

A new Science Ministry report says that the next big
earthquake to hit Tokyo could be a lot more severe than
previously thought. The standing assumption has been that
if a 7.3 magnitude earthquake hit Tokyo Bay, the city
would suffer 11,000 casualties and the loss of 850,000
buildings. However, the new study has found that the focal
point of a quake under Tokyo may be much closer to the
surface than predicted, and that shaking at the city
surface could peak at 7 on the Shindo scale of 1-7. ***Ed:
The Shindo scale is like the Mercalli scale, and measures
ground movement. At Shindo 6 you can't stand, and Shindo 7
you're being thrown about and fissures open up in the
ground. See the definitions here:**
(Source: TT commentary from, Mar 31, 2012)

-> Japanese corporate taxes lower than in USA

Although it's not news, the comparison is nonetheless
interesting. After Japan's corporate tax rate drops to
38.01% shortly (you'll remember that it was going to be
several percent lower still, but was increased again for 5
years to help pay for the Tohoku reconstruction), the USA
will have the honor of having the highest corporate tax
rate amongst developed nations. The OECD says that the
average 2012 corporate tax rate amongst its 34 member
countries is 25.4%. In the US, it's still 39.2%. ***Ed:
Obama has been preparing legislation to bring the US tax
rate down to 28%, but when that will happen is anyone's
guess. In the meantime, the Japanese also really need to
bring their corporate tax down below 30%, else it will be
difficult to get Japanese multinationals to repatriate
taxable income back to Japan.** (Source: TT commentary
from, Mar 30, 2012)

-> Ocean-based windmills become an option

Due to a lack of physical space as well as the vociferous
opposition of locals to having huge turbines in their
neighborhoods, especially now that low-frequency noise and
consequent negative health effects is so topical, the
Japanese government and private companies are rolling out
some novel technologies to put wind turbines out at sea.
One such project is a floating platform wind farm being
built by Marubeni, Mitsubishi, and Nippon Steel, to be
sited off the coast of Fukushima. The new wind farm will
generate 16MW and will be a floating implementation rather
than being built on fixed poles, due to the fact that the
water in that area is so deep. (Source: TT commentary from, Mar 29, 2012)

-> Japan may shoot down N. Korean missile

The right wingers are having some excitement recently as
the Defence Minister announced this last week that he has
permission from the Cabinet to order the Self-defence Force
to shoot down a North Korean missile should it threaten
Japanese territory. It's not clear if this means shooting
the missile down for simply passing over Japanese
territory. South Korea has made a similar threat if the
missile passes over their nation. (Source: TT commentary
from, Mar 31, 2012)

-> Start of a bull market for Japan?

Investment funds appear to be bullish on Japan's prospects
for a strong stock market recovery this year, coming hard
on the heels of a market which has already moved up 23%
from 8,165 on November 24th 2011, to 10,083 on Friday, just
4 months later. They point to the Tohoku reconstruction
budget, the BoJ's recent statements on encouraging mild
inflation, a banking sector largely cleansed of debts, and
major companies which have restructured and which have
substantially moved all their low-value work off shore.
Analysts are also noting that Japanese companies' shares
are still relatively cheap compared to elsewhere, being
valued at 1x book value, compared to UK companies valued
at 1.7x and US firms at 2.3x. (Source: TT commentary from, Mar 30, 2012)

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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=> Question: Employee death expenses

One of our employees died recently, of a heart attack outside
work hours. We don't think it was work related and there
doesn't appear to be any claim by the survivors to that effect.
Is the company obligated to pay anything to the surviving
family? If so, what is the legal or customary amount?

*** Answer

* Cause of Death

First of all, it is important to make sure the employee's
death is truly not work-related even if the employer and
the survivors are both convinced it is not.

If an employee worked approximately 100 hours of overtime
in a month or 80 hours of overtime per month for 6 months
prior to his/her death, such death may be considered

* Workers' Accident Compensation Insurance: Survivors'

If an employee dies while at work or commuting to/from work,
a surviving family member will receive a pension or a lump-sum
payment from the government.

* Workers’ Accident Compensation Insurance: Funeral Expenses

...To continue reading, click on the following link. (Answers
courtesy of Nagamine-mishima.)



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 Terrie's Take 655 we discussed the increase in
datacenter usage in Japan following the earthquake and due
to long-term trends in software usage. We had a number of
comments, including this one from Ras Scollay at KVH,
pointing out that there are some successful foreign players
in the market. Thanks Ras.

=> Reader Comment: Thanks for your newsletter - always
interesting and especially so this week. We at KVH have
been closely watching the evolution of the cloud and
datacenter market and noticed the lack of foreign based
firms setting up platforms here. Every large global player
has a cloud service in region, with the great majority in
Singapore, Hong Kong, or as you say in China. Our feeling
is that the Japanese market is simply too complex, and the
capex and operational costs make it unattractive to global
companies. Which certainly puts KVH in a great position -
we are unique as a foreign-focused bilingual company
headquartered in Japan, with fibre optic network,
datacenters, cloud platforms - VDI, IaaS, Storage, Private
Cloud, etc., all here. There are plenty of great home
grown Japanese operations but not so many serving the
foreign community, again as you say, unless they want to
have their data served from abroad. Interesting times and
we are pleased to be a part of this dynamic and unique

Ras Scollay



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