Biweekly Update: News on Japan & the Netherlands – Week 1 & 2, 2022
This newsletter was shared with Dujat members on 18-1-2022. The next newsletter was sent out today.
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Update on Japan
New coronavirus cases have hit a record high in Japan, spurred by the Omicron variant. The government plans to announce a quasi-state of emergency in Tokyo and 12 other prefectures, giving governors the power to beef up anti-infection measures.
Authorities across Japan confirmed more than 32,000 infections on Tuesday 18 January. The previous record of nearly 26,000 cases was set in August. Three prefectures, Okinawa, Yamaguchi and Hiroshima, are already using intensive measures to combat the surge. Soon, Tokyo, its neighbors and several other prefectures could join them. The central government will consult experts before announcing an official decision on Wednesday.
Tokyo is seeing one of the nation’s worst outbreaks. It surpassed 5,000 new infections on Tuesday. More than 10,000 infected people are now isolating at home. They all have mild symptoms or none at all.Hospitals are also beginning to see an uptick. More than 20% of beds set aside for coronavirus patients are full.
If Tokyo’s request for a quasi-emergency is granted, businesses may be asked to close early or place limits on customers. Osaka has not yet asked to take that step. But it is considering it. The prefecture reported nearly 5,400 cases on Tuesday, a new record.
On Tuesday 11 January Japan’s Prime Minister Kishida Fumio announced an extension of a ban on new foreign arrivals as the government tries to stop the spread of the highly transmissible omicron COVID-19 variant.
“We will maintain the framework of restrictions until the end of February,” Kishida told reporters, after he had signaled the rules would be extended earlier this month. “We will take necessary responses in line with humanitarian and national interests.”
His cabinet met on Monday to exchange information about community infections and hospitalizations. The government will consider lifting a rule that now bars visa holders from reentering Japan from South Africa and some other countries.
But the move to maintain the overall restrictions on travelers entering Japan — reinstated after a short lapse at the end of November — comes amid the makings of a new wave of infections.
Kishida appealed to the nation to stay calm and keep masks on, noting that the omicron variant appears to produce less severe symptoms than previous strains but that “the rate of severe cases could increase if infections spread among elderly.”
The prime minister on Monday also met with infectious disease experts who advised him to speed up booster shots for the elderly, expand the supply of COVID-19 treatment pills and increase testing. He was briefed on the situation in Okinawa, Yamaguchi and Hiroshima prefectures, which on Sunday activated stronger measures to stop the spread of the virus.
Kishida’s government intends to strengthen its response to omicron, taking such steps as allowing patients who present with mild symptoms to recuperate at home to free up hospital beds and expanding free COVID testing capacity.
“The government will assist efforts by local authorities” primarily responsible for vaccinations, “including through the establishment of large-scale vaccination sites run by the Self-Defense Forces,” Kishida said. The SDF also ran vaccination centers for earlier rounds of inoculations.
Kishida said that “the government will move up the booster vaccinations for the elderly by tapping into the stock of 9 million unused vaccines.” After March, 18 million doses of Moderna vaccines are expected to become available for inoculating other people. Kishida said that shots for those under 12 years old “will be started as early as possible.”
A COVID treatment pill from Merck is already available at 14,000 medical institutions and pharmacies across Japan. Another pill from Pfizer is expected to be approved this month for use starting in February.
Kishida cautioned that “there are still many things we don’t know about omicron,” vowing to “adapt the way we respond by actively collecting scientific knowledge.”
Japan looks to develop its first new offshore natural gas field in over three decades, a project billed as bolstering the country’s energy independence.
Japanese energy company Inpex and Japan Oil, Gas and Metals National Corp. will launch the project in March. It was announced Monday. JOGMEC, a state-owned firm, will foot half of the 33 billion yen (€253 million) investment.
The work takes place more than 100 km off the Sea of Japan coast of Shimane and Yamaguchi prefectures. It begins with exploratory wells to determine whether the reserves are commercially feasible. Full-scale production is expected to begin around 2032. This will be Japan’s first offshore gas field since a development off the Niigata Prefecture coast started production in 1990. It is believed to be the first gas project anywhere in Japanese territory in 20 years.
The Iwafune-oki Oil-Gas Field off Niigata is the only current gas development in Japanese waters. Niigata and five other prefectures host onshore gas fields, but Japan imports almost all of its natural gas.
In 2019, natural gas imports totaled 76.5 million tons while Japan produced only 1.73 million tons domestically. The new gas field is expected to produce over 900,000 tons a year, lifting Japan’s self-sufficiency to 3.4% from 2.2%.
The Ministry of Economy, Trade and Industry sees domestic development of resources as key to energy stability in the face of geopolitical risks. The strategic energy plan approved by Japan’s cabinet in October calls for independent development of petroleum and natural gas assets to top 60% in fiscal 2040, compared with 34.7% in fiscal 2019. This would come from domestic projects as well as overseas rights held by Japanese businesses.
Amid the global shift away from carbon emissions, the British government ended direct support for the fossil fuel sector overseas in March 2021. The U.S. looks to cease such assistance as well. But switching to renewable energy will take time, and a stable source of energy is needed during the transition period. In that light, neither the U.S. nor the U.K. has ceased supporting domestic fossil fuel industries. Natural gas will remain a preferred energy source since it has a lower environmental impact than other fossil fuels.
Global financial groups are increasingly divesting from fossil fuel businesses or enacting tougher lending provisions to such operations. Future exploration is expected to wane, setting the stage for tighter balances between supply and demand.
Gas prices in Europe and liquefied natural gas prices in Asia surged last year. The conditions for the price gains are expected to persist. Self-sufficiency is one option for mitigating the impact.
Natural gas typically is used to generate power. If that demand sinks, natural gas also can serve as raw material for producing hydrogen and ammonia — two combustible substances that do not emit carbon dioxide. Such diverse applications encouraged plans for Japan’s new gas field.
Yet plans to continue using fossil fuels could face criticism. In May, the International Energy Agency outlined a path to achieving net-zero greenhouse gas emissions by 2050. The roadmap declares that no investment is needed in new fossil fuel supplies.
Nongovernmental organizations are demanding the termination of fossil fuel developments. Financial markets may regard Japan as making insufficient efforts to move away from carbon, leaving Japanese companies at a disadvantage in raising funds.
The Japanese government is planning to ease regulations for medical artificial intelligence software to boost the domestic market, Nikkei has learned.
The government is considering cutting the need for regulatory approval to update such software as early as by the end of 2022. This will make it easier for companies to improve software performance and to detect diseases more quickly. The medical software market is dominated by foreign companies, and the deregulation is aimed at helping the domestic market recover.
The software, known as software as a medical device or SaMD, uses technologies such as AI to help doctors diagnose diseases. For example, it is used to detect shadows and lesions from X-ray images of a patient’s chest, or predict the presence of tumors from endoscopic images of the colon.
The domestic market for diagnosis and medical treatment support AI is expected to expand from 300 million yen (€2.3 million) in 2019 to 10 billion yen in 2025, according to a report by Yano Research Institute in December 2020.
The number of software approved in Japan is around 20, below one-sixth that of the U.S. and under half that of South Korea. Japan considers and examines every software update as if it were a new product, but the regulatory change will eliminate that process. It is also planning to shorten initial product reviews.
It often takes two to three months in Japan to start the review process after authorities receive an application. The review itself can take several more months. This is in addition to the re-examination for renewal. The Ministry of Health, Labor and Welfare is considering announcing the areas it focuses on during the review process, as well as the evaluation criteria for safety and efficacy.
The health ministry is also reviewing a rule that requires hands-on management of software by a technical supervisor. This rule makes it difficult for such staff to work away from the office.
Update on the Netherlands
As of last weekend, Saturday 15 January, more is possible again in the Netherlands as the Dutch gover. There are relaxations for the sports sector, shops and education, while the culture sector and catering can follow soon.
Prime Minister Mark Rutte and the new Dutch Minister Ernst Kuipers (Public Health) had that message for the Netherlands during their press conference on Friday night. An overview of the announced relaxation and a new, more extensive face mask advice.
MBO and higher education are reopened and all students can go back to school. They must wear a face mask at all times. There is also a maximum group size of 75 students in class or lecture rooms, with the exception of interim and final examinations.
Stores are allowed to receive customers again until 17:00. There is no need to make an appointment for the visit. However, customers must wear a mask inside and there is a maximum capacity that depends on the size of the store.
Almost all sports activities inside and outside are possible again. At indoor sports locations, adults must be able to show the corona pass (QR-code), proving they have been vaccinated, tested or recently recovered from the corona virus.
A visit to a hairdresser, beauty salon, sex worker, massage studio or another so-called contact profession is possible again since Saturday. However, there is a maximum number of customers per square meter and a mask obligation. All contact professions must also close the door again at 17:00.
If you had a booster shot more than a week ago or if you contracted the coronavirus less than eight weeks ago, you no longer have to quarantine if you have been in close contact with a corona patient. A condition for not having to quarantine is that you have no complaints. After five days, a PCR test still needs to be taken.
At the moment, the rule is that someone in this situation must be quarantined for ten days. If the PCR test on day five shows a negative test result, the quarantine may be ended earlier. This rule now only applies to people who have not had a booster.
Against all relaxation, there is an extension of the mask advice. Everywhere – also outside – where it is not possible to keep a distance of 1.5 meters, it is recommended to wear a disposable face mask. For example, think of shopping streets or markets. Homemade mouth caps are not recommended.
The mask advice applies both when you are standing and when you are sitting. There is an exception if you eat or drink something. From now on, all students in higher education and MBO are obliged to wear face masks for full days.
For now, restaurants, theaters, museums are not allowed to open again. The strict advice to work from home also remains unchanged, as well as the ban on events. A next corona press conference is scheduled to take place on Tuesday 25 January.
Not only owner-occupied houses, but also rental properties have seen a bigger price increase than ever. This is apparent from figures for the fourth quarter of 2021 from rental housing platform Pararius. Rents in Rotterdam and Eindhoven in particular have risen sharply in recent months.
The rates per square meter were 5.3% higher in the last quarter of last year than in the same period in 2020. It is the largest increase in more than three years. Due to the increase, prices are now at their highest point since the platform started measuring eleven years ago. On average you pay 17.02 euros per square meter per month in the Netherlands.
According to Pararius director Jasper de Groot, rental houses have become more expensive due to the small supply of rental properties in the private sector, in combination with the problems on the market for owner-occupied homes.
Many households earn too much for social housing, but are unable to buy a house. As a result, they have to rent privately, but there the supply is limited and so prices go up.
Of the five largest cities in the country, the rates in Eindhoven shot up the fastest: a plus of 11.7% compared to the last quarter of 2020. Rotterdam and The Hague also recorded significant increases of 9.7% and 6.7% respectively.
In Amsterdam, the average rent rose by only 1.7%. However, the price there is higher than in the rest of the country. In the capital you pay an average of 22.45 euros per square meter. Eindhoven is the cheapest of the largest cities, with an average rate of 15.76 euros.
Drugstores have switched quickly after it was announced last week that wearing fabrics and homemade masks is not recommended and wearing a disposable mouth mask is desirable in more places. According to the CBD drugstore umbrella, everything is now in stock in most stores and online.
“After the advice of the OMT, we started buying type 2 mouth masks like mad,” says director Jos Jongstra of the Central Bureau of Drugstores, which represents approximately 2,300 drugstores. “At such moments, you also receive a lot from the market, but you do want to do business with reliable partners who you know.”
“We now offer everything,” says José Mes of the Kruidvat and Trekpleister drugstores. “Since Friday we have been offering the type 2 face masks online and from today also in all stores.” This is also the case at Albert Heijn supermarkets, a spokesperson said.
And on bol.com, according to a spokesperson for the platform, there is also sufficient supply of the different types. The ‘normal’ disposable mouth caps are still sold everywhere. These are, in contrast to the fabric copies, not discouraged.
The type 2, or medical mouth cap, is now recommended. In addition to the normal type 2, there is also a type 2R. “Those with the addition R are water-repellent,” says the spokesperson for Kruidvat and Trekpleister. The shelves at Etos are also full of different types of mouth caps, both digitally and physically.
“We are also replenishing the FFP2 face masks.” There has been a lot of demand for this in recent weeks. These are mouth masks that are mandatory in some other countries, such as in winter sports country Austria. Here they are advised for people with fragile health.
“Who would have thought that we would now know everything about mouth caps?”, Jongstra asks rhetorically from the CBD. “What most will be sourced in the coming weeks will depend on how the consumer picks it up.”
The purchase of the types for which there is a high demand will become structural. “In any case, we are now multi-mouth masks.”
The European car market has contracted for the second year in a row due to a shortage of semiconductors, according to new figures from ACEA , the European association of carmakers. In 2021, 9.7 million new cars rolled out of the showrooms. That is 200,000 fewer than in 2020, but more than 3 million fewer than in 2019, the year prior to the pandemic.
The decline was mainly in the last six months of the year, in which sales figures were always lower than a year earlier. In December 2021, sales reached 795,295 new cars, 22.8% less than a year earlier.
In the Netherlands, the number of new cars sold last month fell less sharply than the EU average. 35,708 new models were sold, 15.7% less than a year earlier. On an annual basis, sales of new cars in the Netherlands fell faster than in the entire EU. With a 9.2% decrease, it came to 322,831 pieces.
In Germany, the largest car market in the EU, new car sales fell by 10.1% to 2.6 million cars sold. Italy, Spain and France, the next three markets, showed year-on-year growth.
Car manufacturer Volkswagen, which also includes brands such as SKODA, SEAT and Audi, remained market leader in the EU, although its market share fell slightly last year to more than a quarter. Stellantis, parent company of Peugeot, Fiat, Opel and Citroën, among others, accounted for almost 22% of the market and therefore the number two. Renault, which also sells Dacias, followed in third place with a market share of 12.6%.
Update on Dujat & Members
The worldwide COVID-19 pandemic had huge consequences on various sectors, including the real estate market. There are contradictory messages about the sector, so people are wondering about the influence on the rental prices.
We welcome you to join our Real Estate Webinar, taking place next week on Monday 24 January from 16:30, where experts from Loyens & Loeff, CBRE, Asunaro Holland Interplan B.V., Solved Nederland B.V. and Daiwa House Modular Europe will discuss the latest updates on Dutch Real Estate.
Japan’s Hitachi has decided to sell about half its 51% stake in Hitachi Construction Machinery for 200 billion yen to trading house Itochu and investment fund Japan Industrial Partners. The sale will represent a final tranche of Hitachi’s decadelong business portfolio overhaul.
Hitachi purchased U.S. software developer GlobalLogic in July 2021 for about 1 trillion yen, as part of a business reshuffle to concentrate on the information technology sector. In April last year, the company decided to sell its metals unit, Hitachi Metals, to U.S. investment fund Bain Capital.
Among Hitachi Construction Machinery’s activities is the development of automated construction machinery that uses the group’s Internet of Things platform, Lumada. Hitachi expects synergies from this work, and the conglomerate plans to retain shares in the spinoff. It will maintain a collaborative relationship with the construction machinery maker.
Itochu sells construction equipment in a number of markets, including Japan, the U.S. and Indonesia. The Japanese trading house has a joint venture with Hitachi Construction Machinery in Indonesia to oversee sales and offer financial services. By investing in Hitachi Construction Machinery, Itochu will try to strengthen its sales and financial support, leveraging its overseas sales network.
If your company has any news to share in the next biweekly newsletter, let us know by sending an e-mail to firstname.lastname@example.org.
Jinn van Gastel
Project Manager at Dujat
DUJAT (Dutch and Japanese Trade Federation)
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