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rffrydr
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 Posted: Fri Mar 03, 2006 12:25 am Post subject: JAPAN |
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Core rate up .5%; 3 in a row:
"Mitsubishi UFJ Securities senior strategist Naomi Hasegawa said remarks this morning by Prime Minister Junichi Koizumi fueled conjecture that the central bank will soon end its present policy.
'[Changes in] consumer prices are coming in above zero and we are seeing signs of getting out of deflation,' Koizumi told a parliamentary committee.
His comments were his most positive yet on recent indications that the economy is winning its battle with falling consumer prices. Previously, Koizumi had insisted that it was too soon to say that the economy was coming out of deflation."
Bonds and stocks were short going in. End-of-day showed resiliency, (complaceny?)
Hey Henry, Devil's advocate: with Japanese debt at a Godzilla-sized 160% GDP on the worlds fastest aging population (and most afraid of foreign workers) do they have any choice BUT to reflate their way out? And politicians want a decade for "reforms."
An end to quantiative easing may be announced at the end of Japanese Fiscal Year--but this could take a long, long time to play out. Markets 1st "verdict."
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HenryTo
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| Posted: Sun Nov 18, 2007 1:35 am Post subject: |
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Barron's getting bullish on Japan. Interesting that they mentioned Nomura - the company now has a market cap of around US$31 billion, compared to $76 billion 20 years ago (when it was 18 times the size of Merrill), just prior to the October 1987 crash:
http://online.barrons.com/article/SB119526244805596512.html?mod=b_hps_9_0001_b_this_weeks_magazine_home_left
| Quote: | NO STOCK MARKET HAS DISAPPOINTED global investors as often as Japan's, but that sorry record may soon end.
There's no question Japan has doddered in 2007, even as investors rushed for stocks in China, India and the rest of Asia. Japan is down 12% so far this year, compared with gains of 3% and 4% for the U.S. and Europe, respectively.
Most global investors have slashed exposure to Japan to about 16% of their portfolios, versus the 21% allocation in Morgan Stanley Capital International's benchmark Europe Australasia Far East index. Indeed, the funds most bullish on Japan are those whose mandates force them to mirror this index. Japanese stocks remain vastly below their highs, set in 1989 -- as if still mired in the long, deflationary aftermath of an economic bubble that burst almost 20 years ago.
In fact, sentiment is so dismal that the stage is set for a rally.
Gone is the three-digit multiple: Japanese stocks trade today at a price-earnings ratio of 15.4, about the same as U.S. shares, with earnings growing somewhat faster, but with interest rates sharply lower than America's. Japan's stock-market value as a percentage of its economy is among the lowest of the G-7 nations -- the developed world's top economies. It is certainly the cheapest on a price-to-book-value basis.
The single measure with "an unblemished track record of spotting times to buy" is about to start flashing green, according to Japan strategist Jonathan Allum of KBC Financial Products in London. That signal comes whenever the dividend yield on Japanese issues exceeds the yield on Japanese government bonds. Stocks now yield 1.46% -- just under 1.48% on the relevant government bond. (In contrast, the yield on U.S. shares is less than half that of the equivalent Treasury.)
...
Indeed, earnings have been so good that investors worry they've topped out. Returns on equity have hit a ceiling of 11.6%, partly because Japanese companies are wary of boosting leverage.
What could help? Consolidation. And mergers are already on the rise, changing the landscape in banking, pharmaceuticals and retailing. When Citigroup bought Nikko Cordial this year, Japan at last saw a major takeover by a foreign company. It also saw its first hostile takeover attempt by one domestic company for another, although Oji Paper failed to buy Hokuetsu Paper Mills.
Shigenobu Nagamori, CEO of the Kyoto-based components firm Nidec, has expanded his company rapidly through acquisitions. "Good or bad, all Japanese stocks are being sold off," says Nagamori. "People are disappointed to see takeover defenses and political instability. But more and more, Japanese companies are becoming globalized -- growing more efficient through competition. About one-third of the Nikkei's sales come from abroad, more than in the S&P 500. "Foreign investors are too pessimistic about Japanese stocks," Nagamori adds. "This is the bottom of the market."
Certainly, Japanese companies could use capital more effectively. UBS points out that a third of TSE First-Section companies are debt-free, making those like Takeda Pharmaceutical (ticker: 4502.Japan), Sony (SNE), Nintendo (7974.Japan) and Canon (CAJ) big holders of net cash. If Corporate Japan boosted leverage, increasing total assets to, say, 3.5 times shareholders' equity, and produced a net margin of 4.5% (from 2.8 times and 3.8%, now), return on equity could hit 15.8%, near U.S. and European levels, Goldman reckons.
Japanese companies now pay just a fifth of earnings as dividends, yet the dividend pool is growing at a 20% annual clip. John Vail, a strategist at Nikko Asset Management in Tokyo, believes the payout ratio will hit 30% by 2011, making it comparable to the U.S. level. That would go a long way to lure Japanese investors, hit by negative rates, to return to domestic stocks.
At the moment, a tiny fraction of the assets in postal-insurance contracts -- a popular form of savings in Japan -- are invested in equities. "There's no domestic bid: Mrs. Watanabe is going after anything with a yield outside Japan," says Goldman Sachs strategist Kathy Matsui. As a result, foreigners now account for two-thirds of the Japanese stock market's turnover.
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IF YOU BELIEVE JAPAN IS poised to rally, brokers like Nomura Holdings (NMR) or asset managers like Abe's Sparx (8739.Japan) look attractive, particularly if domestic investors come back home.
Also worth considering: exchange-traded funds that focus on Japan, such as iShares MSCI Japan (EWJ), as well as mutual funds that do the same.
Some investors are taking a flyer on Japanese small-caps, which collapsed last year but have started to revive. Warren Yeh of Adapa Partners in New York is a fan of DeNA (2432.Japan). The company operates the nation's largest social-network site for mobile phones, was founded by an ex-McKinsey consultant and, he says, has "provided two consecutive quarters of earnings surprise."
Larry Jeddeloh, who pens the Institutional Strategist newsletter, has been recommending Japan Small Cap Fund (JOF). "The over-the-counter market is just on sale," says Jeddeloh. "I'm a simple guy. I look at Japan -- they have record profits, record dividend payouts, more M&A than ever done this year, and they have a record amount of stock buybacks. And the market is down! This market is just too big and too important to ignore." |
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rffrydr
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HenryTo
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HenryTo
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| Posted: Tue Oct 30, 2007 11:16 pm Post subject: |
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Japan still struggling with deflation:
http://www.bloomberg.com/apps/news?pid=20601087&sid=arA5optiNh1c&refer=home
| Quote: | | Monthly wages, including overtime pay, fell 0.5 percent from a year earlier, a ninth decline in 10 months, the Labor Ministry said today in Tokyo. Summer bonuses, which typically amount to about 10 percent of a worker's annual income, declined 1.1 percent, the first drop in three years. |
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HenryTo
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HenryTo
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| Posted: Fri Oct 26, 2007 12:51 am Post subject: |
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Just when you think it can't get any worse:
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Japan Food Safety Comes Under Scrutiny
Friday October 26, 1:00 am ET
By Hiroko Tabuchi, Associated Press Writer
Scandals Over False Labeling Shatter Japan's Reputation for Food Safety, Quality
TOKYO (AP) -- Ocean fresh sushi? Quality marbled beef? Exquisite confections? Think again. Japan has been hit by a slew of food safety and false labeling scandals that threaten to wreck its image as a country of culinary wonders, squeaky-clean factories and impeccable sanitation.
In the most recent scandal, a venerable maker of traditional Japanese sweets was found to have recycled the red bean filling in its rice cakes, collecting old filling from leftover boxes and shipping them out as new.
Investigators also found that Akafuku Co., based in western Japan, had long misguided consumers by shipping out old sweets it stored in freezers after they were stamped with a production date that was actually the date old cakes were thawed.
"I knew what we were doing was wrong," a grave-looking Akafuku President Noriyasu Hamada told reporters Tuesday. "The responsibility lies with me."
Those revelations came on the heels of a raid by health authorities of meat processor Meat Hope Co. in northern Japan on suspicions it falsely labeled pork, chicken and beef mixture as pure ground beef -- a practice media reports said had gone on at least two decades. Its president was arrested Wednesday for violating Japan's competition laws, which ban the false labeling of products.
A separate meat processor was accused last week of taking meat from retired roosting chickens -- which the company had bought at rock-bottom prices -- and shipping them out as top-quality free-range chicken.
While there have been no reports of illness or food-poisoning related to any of the scandals, they have dominated local media and alarmed Japanese shoppers.
The incidents also come as Japanese consumers -- appalled over rampant product safety problems in neighboring China, a major trading partner -- had been turning to domestic produce as a sure sign of quality.
"I've always tried to buy domestic because I thought that was safer, but now I can't trust anybody," said Toshie Kano, 72, a retiree grocery shopping at a supermarket in central Tokyo.
"These companies can't cut corners with things we eat. Just imagine what we've been feeding our children," she said.
The scandals have not been confined to regional companies. Fujiya Co., one of Japan's top confectioners, admitted in February to having used out-of-date milk, cream and eggs in cream puffs distributed nationwide. Cookie maker Ishiya Trading Co. followed suit, recalling its sweets after it admitted falsifying expiration dates to get rid of excess stock.
Analysts say that a persistent price war in Japan's food industry has squeezed profits, especially at smaller companies, and spurred them to cut corners.
They also worry that the scandals have hurt the image of Japanese food overseas at a time when companies here are looking to expand internationally to augment sluggish profits at home.
"This is a big blow for food companies who want to start international operations or boost overseas sales," said Hiroshi Saji, an industry analyst at Mizuho Securities. "These scandals have tainted the Japan brand."
Authorities, meanwhile, have struggled to police violators.
"The recent violations are so flagrant, we're looking at a moral problem and that's hard to regulate," said Health Ministry official Takashi Tagami. "Perhaps we need to increase penalties for offenders."
The latest scandals have even raised suspicion over the authenticity and safety of some of the nation's favorite dishes, including sushi, marbled beef and shark's fin.
Discount sushi stores frequently use cheap substitutes for delicacies like eel and sea bream, local media allege. For example, a freshwater species called the Nile tilapia, caught in Egypt, is reportedly served as sea bream in many outlets.
Other fake foods "exposed" by local media include fatty tuna mixed from tuna bits and pork lard, shark's fin made from gelatin, and a bizarre reconstituted egg-in-a-tube that is often used in packed lunches and salads.
Japan has not been immune to food scares. In 2000, Snow Brand Milk Products Co. shipped old milk and sickened more than 14,000 people, the country's worst-ever outbreak of food poisoning. |
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rffrydr
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rffrydr
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| Posted: Sun Sep 30, 2007 8:17 am Post subject: |
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The story behind the story of much of this rebound rally..yet, the yen has mysteriously followed, 82 to 86 or so. One should not underestimate the conservativeness of japanese money--housewives aside.
http://www.alertnet.org/thenews/newsdesk/T285984.htm
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HenryTo
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| Posted: Sat Sep 29, 2007 1:34 pm Post subject: |
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Japan Post set to privatize this Monday - becoming the largest commercial bank in the world, ahead of Citigroup. The immediate changes are minimal, however. Over the longer-run, there could be profound changes (such as a rise in Japanese yields given that this pool of savings may be diversified into other assets, including foreign securities) - but when it comes to the Japanese, the cultural barriers to change can be enormous:
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Japan Set to Privatize Postal System
Saturday September 29, 5:19 am ET
By Hiroko Tabuchi, Associated Press Writer
Japan to Privatize Postal System, a Move Intended to Inject Competition Into Banking Sector
TOKYO (AP) -- Tiny Shirogane post office in a quiet Tokyo neighborhood, with just three clerks and one ATM, might seem far removed from the world of global finance.
But when Japan Post is privatized on Monday, the Shirogane office will become part of the world's biggest commercial bank -- with assets of $3.03 trillion -- in a move intended to inject competition into Japan's banking sector.
"Our customers will soon experience the merits of privatization," Yoshifumi Nishikawa, president of Japan Post, said Friday. "They will see a better quality of services, or new products -- in short, more convenience."
The massive changeover is the result of 2005 reforms instituted by then-Prime Minister Junichiro Koizumi, a former post and telecommunications minister who championed the issue in his landslide victory in parliamentary elections that year.
Much more is at stake than just stamps and letter deliveries: Japan Post operates a bank with over 400 million accounts. Its 24,500 offices nationwide act as sales agents for insurance and investment products.
For millions of rural Japanese, the post office is their only bank, and the system's ubiquitousness has made it a symbol of a benevolent government ready to cater to every citizen's needs.
"The post office is such a basic necessity," said Kazuko Nishina, 36, an accounting clerk, who was withdrawing cash from her savings account at the Shirogane post office.
"I'm still not sure what's going to happen with privatization, but I hope there aren't any surprises for ordinary customers," she said.
Changing such an entrenched system has been tough. When Koizumi pushed through the reforms, critics warned privatization would reduce services, especially to the countryside.
Even lawmakers within his own ruling party vilified the reforms as another attack by modern times on an orderly, secure society.
But Koizumi argued that the government guarantee on postal savings had encouraged generations of Japanese to park their money in the low-interest accounts, creating a stagnant pool of savings and diverting funds away from more productive investments like stocks and mutual funds.
Experts have also said that postal funds have been used to finance pointless government-backed public works -- bridges to nowhere, redundant roads -- and to purchase government bonds, contributing to a public debt now over 160 percent of Japan's gross domestic product.
"These reforms were necessary in terms of making more efficient use of funds," formerly being diverted to useless public works projects, said Kentaro Kogi, banking analyst at Macquarie Securities.
Privatization could also help foreign banks and investment companies scoop up new clients, with the huge savings pool up for grabs at a time when more Japanese turning to stocks and mutual funds.
That means big money for both domestic and foreign banks, as well as insurance companies.
"We can expect the changes to be a plus for stock markets, against the general backdrop of a trend toward more diverse investments," Kogi said.
The entity privatized on Monday will eclipse Citigroup, with assets of $2.22 trillion, as the world's largest commercial bank. Third will be Japan's Mitsubishi UFJ Financial Group, with $1.67 trillion.
Under the 10-year privatization plan, Japan Post will on Monday be broken into four separate businesses, initially held under a government-controlled holding company: An insurance company, savings bank, mail courier and post office management company.
The companies are set to be made independent by 2017, and aim to list on stock markets. The new bank has said it hopes to improve returns on its savings by starting mortgage and credit card businesses, and lending to small companies.
Still, uncertainties remain.
Some say that far from encouraging open competition, Japan Post will be allowed to encroach on rivals by introducing new investment services and new insurance products before a more level playing field is created.
Another issue is whether foreign firms will have equal footing to sell investment products through the newly privatized bank. So far, they have been granted only a minor role, with Goldman Sachs Asset Management the only foreign firm chosen from a dozen that applied to sell their funds.
Meanwhile, some analysts say the mammoth organization -- largely lacking expertise in more sophisticated investments -- could struggle to stay profitable. That raises the risk the bank could start selling off its huge government bond holdings, causing a hike in yield and ultimately adding to the government's debt payments.
"The concept of postal privatization is good. It will inject competition into the banking sector and raise the overall quality of financial institutions, and would encourage more risk-taking behavior and revitalize the economy," said Junsuke Senoguchi, a banking analyst at Lehman Brothers Japan.
"But, depending on how privatization plays out, the move could ultimately damage public finances," Senoguchi said. "That's probably not what the government intended." |
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HenryTo
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| Posted: Fri Sep 21, 2007 12:16 pm Post subject: |
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Japanese banks only now disclosing their subprime exposure. Still not sure on the extent of the exposure, however:
http://www.bloomberg.com/apps/news?pid=20601087&sid=a5gASwmgFR8I&refer=home
| Quote: | Mitsubishi UFJ Financial Group Inc., Japan's largest bank, may have to revalue its securities holdings at a ``significantly lower price'' because of credit-market turmoil triggered by subprime-mortgage defaults in the U.S.
Prices for some securities have declined, while others may not have been ``properly quoted,'' the Tokyo-based bank said in a regulatory filing today. Mitsubishi's American depositary receipts fell 50 cents, or 5.6 percent, to $8.42 at 12:32 p.m. in New York Stock Exchange trading. |
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rffrydr
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| Posted: Mon Sep 17, 2007 10:30 pm Post subject: |
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was going to post; you beat me to it. See marketthoughts for Mrs. Watanabe.
Senzhen next?
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Geoffrey
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rffrydr
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| Posted: Wed Sep 12, 2007 6:46 am Post subject: |
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It held up; and it's also held down. This is more telling on the state of politics in Japan--or lack thereof.
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HenryTo
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| Posted: Wed Sep 12, 2007 12:27 am Post subject: |
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Yen appreciated against both the US Dollar and the Euro on this piece of news.
Interestingly, Yen has also held up against both the Dollar and the Euro in recent days despite horrible economic data. |
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HenryTo
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| Posted: Wed Sep 12, 2007 12:22 am Post subject: |
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Japanese Prime Minister just resigned:
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Japanese Prime Minister Abe will resign By CHISAKI WATANABE, Associated Press Writer
21 minutes ago
TOKYO - Japanese Prime Minister Shinzo Abe announced Wednesday he will resign, ending a year-old government that has suffered a string of damaging scandals and a humiliating electoral defeat.
Abe, whose support rating has fallen to 30 percent, cited the ruling party's defeat in July 29 elections for the upper house of parliament, and said he had instructed party leaders to immediately search for a new premier.
"In the present situation it is difficult to push ahead with effective policies that win the support and trust of the public," Abe said in a nationally televised news conference. "I have decided that we need a change in this situation."
Abe, 52, a nationalist who entered office as Japan's youngest postwar premier, did not announce a date for his departure from office.
Word of Abe's resignation comes after his scandal-scarred government lost control of the upper house of parliament to the resurgent opposition. The LDP still controls the more powerful lower house, which chooses the prime minister.
Abe's resignation marks a rapid fall from power for a prime minister who came into office a year ago with ambitious plans to repair frayed relations with Asian neighbors, revise the 1947 pacifist constitution, and bolster Japan's role in international diplomatic and military affairs.
The prime minister, whose grandfather was premier and whose father was a foreign minister, initially met with success in fence-mending trips last autumn to China and South Korea.
But a string of scandals starting late last year quickly eroded support for Abe. Four Cabinet minister were forced to resign over the past nine months, and one — his first agriculture minister — committed suicide over a money scandal.
Abe also was facing a battle in parliament over extension of the country's refueling mission in support of the U.S.-led operation in Afghanistan.
Abe had said he would quit if he failed to win parliamentary passage of legislation extending the Afghan mission, in which Japanese ships refuel coalition vessels in the Indian Ocean.
"I have pondered how Japan should continue its fight against terrorism," Abe said Wednesday. "I now believe we need change. So Japan must continue its fight against terrorism under a new prime minister."
The plenary session of the lower house was to be delayed, media reports said, but an official of the lower house said she could not confirm that.
Opposition lawmakers said it was about time Abe resigned.
"It is irresponsible for him (to quit) after he gave a policy speech and was to face parliament questioning. He should have quit right after the upper house elections," Mizuho Fukushima, head of the opposition Social Democratic Party, told NHK. |
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