News from and on Japan, May 13 – 27, 2017

Japan’s Imperial family, Japan’s assets abroad, is there a “Japanese Corporate Culture?”, your wake-up call by a fisherman and Kiss Day in Japan

Bitcoin in Japan: not (yet) very well known but it is starting to be a real phenomenon. 1 bitcoin is 252544.44 Japanese yen and its value is rising rapidly. Why? The Japanese government has legalised the virtual currency earlier this year as an official currency in order to regulate transactions. Also in The Netherlands, like in many more countries, it is legal to use bitcoins in transactions, but regulation varies per country. In Japan some local municipalities promote the use of bitcoins as a way to attract foreign visitors and in the coming months 300,000 stores are expected to accept bitcoins. Also Japanese banks are more and more involved but as one former official of the Bank of Japan claims: “in the near term, there is little chance of bitcoin overtaking the yen in popularity in Japan. “Confidence in the yen is strong, despite the government’s massive debt load. And the yen’s shifts in value are slow and slight compared with those among volatile virtual currencies, making it a superior form of payment.” Fine, let’s follow this.

And there was more to report:

  • Politics:
    • Emperor Akihito is allowed to abdicate now that the Japanese cabinet has approved a one-time only bill to make this possible. The Japanese public supports the Emperor’s wish, but there is reason for worry as well: the imperial family will only count 18 members when Princess Mako will step-out of the family to marry her boyfriend Kei Komuro, a commoner who studied law and starred who once starred in a tourism campaign as “Prince of the Sea.” Female succession is not possible in Japan, although (quoting the Financial Times) a large majority of the Japanese public already backs the idea of female succession. “But Sota Kimura, a professor at Tokyo Metropolitan University, says support is passive and there is no real pressure on Mr Abe to act. That is partly down to the low profile of Princess Aiko (the Crown Prince’s only child), who has mostly stayed out of public view, amid concerns about her own health and that of her mother Crown Princess Masako, who has suffered from chronic depression.”
    • PM Shinzo Abe has his eyes set on 2020 as the year for a new Japan’s Constitution. The Diplomat, a Tokyo-based on-line magazine, pictures the time frame and intentions by PM Abe, incl. elections and the referendum that is needed by law to approve constitutional changes. “Certainly, the process is difficult. Any amendment must achieve two-thirds votes in both Houses of the Diet before earning a simple majority vote in a public referendum. It is a process that has to carried out carefully: “if a revised constitution is to come into effect by 2020, one can safely assume that the amendment would have to pass the Diet and reach public referendum by December 2018, since it would likely require a year between passage and promulgation, as is standard with most substantive legal revision regarding security in Japan. That leaves the Abe administration about 18 months to succeed in changing a constitution that has remained unaltered since 1947 — no small feat.”
    • Meanwhile, North-Korea’s rocket launchings and its boasting to be able to equip its rockets with a nuclear war head, is reason enough for the Japanese government to advise its population to be prepared. “The Japanese government has responded by issuing guidelines for what to do in the event of a missile strike. Suggestions include sheltering in an underground shopping arcade, basement, concrete building or, if all else fails, under a table or in a cupboard in the centre of the house, for at least two days, presumably to let any fallout from an attack settle down”, writes Gillian Tett in the Financial Times. “Nobody has a clue whether Pyongyang could or would ever dare fire a missile, or whether the Americans possess the ability to intercept it. Foreign policy observers still think an attack is very unlikely. But what is striking about all these preparations in Japan is not that they are occurring but that so few people in the US or Europe know about them. That is partly because the North Korean threat has largely stayed below the surface, at least in the public consciousness.”
  • Economy:
    • Bitcoin is booming in Japan – and one of the drivers behind its steep rise in valuation is to be found in Japan (and in South Korea). Customers of Nippon Gas can pay in bitcoins, tickets for Peach, a subsidiary airline of ANA can be paid in this virtual currency and “the number of stores accepting it “is expected to rise to 300,000 or so in 2017,” according to Midori Kanemitsu, chief financial officer at bitcoin exchange operator bitFlyer”, reports the Nikkei. “Bitcoin going mainstream as Japanese business signs on” and it estimates that by the end of this year 300,000 will accept this form of payment. Japan has taken its first steps to grant virtual currency legal recognition. Legislation that took effect April 1 labels it a method of payment akin to prepaid cash cards and gift certificates. Exchanges must now be licensed by the government. Such entities as online securities firms are expected to get into the game. Blockchain, enabling other virtual currencies than bitcoin, is getting very popular as well. Based upon the blockchain technology, all kind of new virtual currencies have and are being launched, incl. by municipalities and pop-groups.
    • Interesting article in FT’s Alphaville about the productivity of the Japanese construction industry compared to that in the USA. “It’s worth noting the average Japanese construction worker currently produces about 37 per cent more new housing than the average American construction worker. Another way of putting all of this is that America built about the same number of housing units in 2016 as in 1992, but somehow required about 46 per cent more people to do it. Japan built 31 per cent fewer houses in 2016 than in 1992, but its construction workforce had fallen by 19 per cent. Productivity deteriorated in both countries, but productivity fell much further in America than in Japan. The data imply there is a glut of American construction labour, not a shortage. There are plenty of people, but they’re too inefficient. Perhaps President Trump’s complaining about the import of German cars in the USA, boils down to a similar conclusion: the Americans should build better cars in less time…
    • A short article in the Nikkei on the revision of Japan’s Civil Code to clarify contract rules. It looks like legislation is now more in tune with developments in online shopping and life insurance so as to avoid disputes over interpretation between businesses and consumers.
  • Corporate:
    • Is there something like a Japanese corporate culture? No!, claims Steven Bleistein, CEO of Tokyo­ based consulting firm Relansa in the Nikkei. “There is no such thing as a single Japanese corporate culture. It is not a supposedly different culture that is the problem, but the culture of the company itself. When someone blames Japanese corporate culture for problems, often he or she is referring to behaviors and character traits like over-sensitivity to reasonable business risk, opaque communication, time-consuming decision-making processes, resistance to change, and passivity in a sales force. For example, the decline of such Japanese industrial giants as Sharp and Panasonic – before current leader Kazuhiro Tsuga took the helm – is often blamed on problems with Japanese corporate culture, as if by virtue of being Japanese, the culture of these companies were given. Yet successful companies like Rakuten, SoftBank Group, Fast Retailing, Cyberdyne, Fujifilm Holdings and Seven & i Holdings are just as Japanese, and their corporate cultures can hardly be said to be the same as those of Sharp and Panasonic.” interesting point, although it defies phenomena such as the decision making process through “ringi” (personal seals), a topic for a DUJAT seminar some years ago.
    • One of PM Abe’s goals to revitalise Japan’s corporate sector was to install two years ago a new corporate governance code that would increase the inflow of global funds into the Japanese economy. What happened with the corporate pension funds so fas has been disappointing: “at least 600 other defined benefit corporate pension funds – belonging to Japan’s biggest and best-known companies – have decided against adopting a code that would oblige them both to publicly disclose their annual meeting voting patterns and to demand higher corporate governance standards from the managements of companies they invest in. After decades trumpeting a commitment to employees, Japan Inc has been disappointingly squeamish about a code to improve management of post-retirement assets,” writes the Financial Times. And that with Japanese post-retirement assets being one of the largest world wide.
    • With a Danish royal visit planned for October 2017 I noticed that one way or the other Japanese investments in Denmark have been increasing over the last years. See this chart with Denmark #10, Myanmar, Cambodia and Turkey # 1, 2 and 3. (Toyo Keizai). 
      The net balance of external assets held by the Japanese government, companies and individual investors totaled JPY 349.11 trillion (USD 3.12 trillion) at the end of 2016, the second-highest amount on record, the Japanese Finance Ministry said last Friday May 26. The figure, up 2.9% from a year earlier, reflects increased investment abroad by corporations and in overseas bonds. Japan was the world’s largest holder of overseas net assets for the 26th straight year, according to the ministry. A main driver for the increase of foreign assets is overseas M&A by Japanese companies (Mainichi). 

  • Society:
    • When a population decreases like in Japan, companies will go out to look for M&A opportunities abroad. But what to do when crime is decreasing to the level that the police is looking to prove its very existence? Crime is low in Japan, but the number of cops is growing, writes the Economist. Japan is at the bottom of rankings when it comes to crimes and robberies, so “as crime dries up, police is looking for things to do”. But, as a lawyer in this article states, “Japan is almost crime-free, but not because of the police but because people police themselves”.
    • You may have missed it, but May 23 was Kiss Day in Japan. Don’t worry, most Japanese do not know this either, but…. on 23 May 1946, the first ­ever kissing scene in a movie was screened in Japan, and in commemoration of the event, the day is now referred to as “Kiss Day” in Japan. The movie was Yasushi Sasaki’s Hatachi no Seishun, “A 20-year old youth”. As we know, Japan is the country of surveys and NTT SOLMARE Corporation, whose main business is in e-books and dating sim game services, recently conducted a survey amongst 4,384 of their digital comic book members to find out more about their views on kissing and romance (Sorenews 24). By the way, international Kissing Day is this year on July 6, so the Japanese are lucky to celebrate this for two days per year …
    • Is it a challenge for you waking up early? Try this service Fisherman Call Japan. Since fishermen by occupation begin work in the wee hours of the morning, they figured it would be interesting to have them give wake-up calls to those who need to get up early. Through phone conversations, recipients could get to know the fishermen and get a better understanding of their profession (and attract people to become fisherman). The group has a slick, user-friendly website catering to its target audience. Interested applicants have until May 31 to access the site and choose from the five fishermen profiled there. Fisherman Japan’s goal is to increase by 1,000 the number of fishermen in the Sanriku coast of northeastern Japan by 2024 (Nikkei).

  • 2 long-reads: 
    • The story “Harvest” by Kyoko Hayashi about the aftermath of a criticality accident that occurred at the Tokaimura nuclear fuel processing plant in Ibaraki Prefecture on September 30, 1999. All of Japan’s (and other countries’) nuclear power pants are located in rural area’s, far away from the cities where most of the power is consummated. “Harvest” is about a farmer who simply like to stick to farming.
    • A review of an exhibition in London about the the woodblock master Hokusai, one of Japan’s greatest artists and known by his most famous print The Great Wave. At the British Museum ‘Hokusai: beyond the Great Wave’ is at show until August 13. Sponsored by DUJAT member Mitsubishi Corporation.
Have a great Sunday and ditto working week.
Radboud Molijn