Greig McAllan, former head of Tourism Australia in Asia, acknowledges that he is one of a handful of foreigners working in a uniquely Japanese industry.
But for McAllan, who spent many years in Japan during his 20-year stint with Tourism Australia and the Australian Tourism Commission, getting a foothold among the country's 25,000 love hotels was too good an opportunity to pass up.
And it's a niche that he says has allowed him and business partner, fellow Australian Miro Mijatovic, to carve out strong returns in a country that's being increasingly forsaken as an investment destination because of its stagnant economy.
Love hotels -- rooms for rent for amorous couples who lack privacy at home -- are something quintessentially Japanese, which visitors to the country tend to titter about. But it's serious business for McAllan and Mijatovic's company, Alchemy Japan, and for ordinary Japanese citizens.
Alchemy Japan has grown from one hotel in 2006 to the fifth-largest operator in the country. Reaching that milestone with just 15 hotels shows how fragmented the industry is.
McAllan, 53, says most are owned and operated by individual Japanese, and standards and practices can vary widely.
"Ninety per cent of them are owned by people who have one to three hotels. (The industry) has never really had any foreign investment before. If you are a foreigner you seem to look at it in amazement and say: 'What is this? Is it legal? Is it yakuza? Is it prostitution?" he says.
"(But) most of our customers are people in their 20s or 30s who live at home. Say a daughter (who) lives at home with parents -- there's nowhere to go for personal space. Or guys living in a dormitory or at home, or are married and live with their mother-in-law. Japanese apartments are small and have screens and you can hear through these things."
McAllan says the minority of hotels at the raunchy -- or just plain whacky -- end of the market (there are ones with Batman and Robin, Disneyland and Winnie the Pooh themes, as well as mirrored ceilings, outlandish beds and spas, and darker sadomasochistic themes) attract the most interest.
But he says most, including Alchemy's, are more far more utilitarian versions designed to fulfil the needs of average Japanese couples.
"There are 25,000 of these things in Japan," McAllan says. "And like anything, when you have got that much volume, you have got the good, the bad and the ugly. Unfortunately the extremes of the industry are what the media and people focus their attention on."
McAllan likens Alchemy's approach to that of Starbucks in Japan: introducing common standards and products and branding in a fragmented industry.
The sector is facing a regulatory shake-up.
Hotels that operate an antiquated but discreet system, whereby the reception desk is screened by frosted glass and couples who rent rooms must pay at an in-room console before the door unlocks to let them out, will face tough new hurdles.
For Alchemy, which has already switched the hotels under its Urban Resorts banner to an open reception system, the change represents an opportunity to pick up hotels from owners keen to exit the industry.
Although Alchemy offers institutional investors exposure to the so-called "leisure hotel" market, McAllan says the company is no longer searching high and low for new backers.
"Would we be interested in Australian investors? The answer is yes, but we are not chasing it," he says.
"The days of us running around doing roadshows are gone."
McAllan says the hotels are highly profitable, generating net operating income margins of up to 50 per cent (excluding cost of finance, fees, maintenance and tax), making them an attractive investment.
The rooms rent for between Y2000 ($25) and Y5000 for the minimum time of 90 minutes, and are typically turned over 2.5 times a day during the week and 4.5 times a day on weekends.
"That gives massive turnover compared to a regular hotel," McAllan says.
"In a year we have a million people go through our hotels and we only have 15 hotels out of an inventory of 15,000.
"Room for room, we get more for our rooms than a five-star would get for their rooms, without any of the overheads."
McAllan says Alchemy has introduced cleanliness and food guarantees, and reporting systems to produce the kind of information and monitoring institutional investors need.
"Unless we can show investors our results and our systems, we are just another bunch of gaijin (foreigners) with a good story," McAllan says.
He chuckles about the strange turn his life has taken since leaving Tourism Australia.
But he says he loves the job, enjoys working with a dedicated and motivated Japanese staff and is confident about the company's success in an industry where demand is certainly not about to dry up.
http://www.theaustralian.com.au/business/getting-a-foot-in-the-door-of-japanese-love-hotels/story-e6frg8zx-1225882955250
Wednesday, June 23, 2010
Sunday, June 20, 2010
New lending rules to hurt spending, economy
Smaller businesses and sole proprietorships, whose owners take out personal loans to finance their businesses, could also be badly hurt, further depressing an already weak economy.
The new regulations, which include limiting the amount individuals can borrow to a third of annual income, kicked in on Friday.
Research firm Teikoku Databank warns that the tighter lending environment would make financing difficult for small businesses which are already facing record bankruptcy rates.
Ahead of a full implementation of the regulations on Friday, the bigger consumer lenders -- Acom Co, Promise Co, Takefuji Corp and Aiful Corp -- had tightened lending limits and reduced total loans by 40 percent in the last five years to 3.9 trillion yen by March this year.
The move put many Japanese consumers in a financial bind and helped to raise small companies' bankruptcies to 5,739 cases in 2009, or a record-high 50.7 percent of total corporate failure in the country.
Japan's economy grew 1.2 percent in January-March, outpacing growth in the United States and Europe, thanks to brisk exports to fast-growing Asian economies and government stimulus spending.
But analysts say growth is likely to slow later this year as gains in consumer spending, which accounts for about 60 percent of Japan's GDP, could moderate due to a lacklustre jobs market, while the impact of government stimulus spending is also expected to wear off.
Many shoppers are set to tighten their belts as about 9.6 million, or 42 percent of total borrowers that use consumer lenders, are already at or above their lending limit and unable to seek new loans, according to the Financial Services Agency.
Of those turned down by consumer lenders in the past 12 months, about 45 percent responding to a survey by the Japan Financial Services Association said they had given up loan financing and cut their spending to zero.
"People would likely to stop spending on luxury products. Leisure and service providers such as pachinko business might get hit and some may also stop sending their children to private schools," Promise's president Ken Kubo told Reuters this week.
Negative signs are already seen in Japan's pachinko and other gambling businesses where, according to the FSA report, consumer loan users often spend their money.
An executive from a major pachinko hall operator said the company had an internal meeting in January to brace for a possible negative impact from the new regulations. Their calculations showed that the lending squeeze may weigh on pachinko sales by about 10 percent, he said.
Waseda University professor Tomoaki Sakano expects the regulations, originally aimed to restrict loansharks and multiple borrowings by consumers, could weigh on Japan's GDP by 0.395 percent or 2.29 trillion yen if consumer lenders halve their loans amount.
http://in.reuters.com/article/idINIndia-49426720100618
The new regulations, which include limiting the amount individuals can borrow to a third of annual income, kicked in on Friday.
Research firm Teikoku Databank warns that the tighter lending environment would make financing difficult for small businesses which are already facing record bankruptcy rates.
Ahead of a full implementation of the regulations on Friday, the bigger consumer lenders -- Acom Co, Promise Co, Takefuji Corp and Aiful Corp -- had tightened lending limits and reduced total loans by 40 percent in the last five years to 3.9 trillion yen by March this year.
The move put many Japanese consumers in a financial bind and helped to raise small companies' bankruptcies to 5,739 cases in 2009, or a record-high 50.7 percent of total corporate failure in the country.
Japan's economy grew 1.2 percent in January-March, outpacing growth in the United States and Europe, thanks to brisk exports to fast-growing Asian economies and government stimulus spending.
But analysts say growth is likely to slow later this year as gains in consumer spending, which accounts for about 60 percent of Japan's GDP, could moderate due to a lacklustre jobs market, while the impact of government stimulus spending is also expected to wear off.
Many shoppers are set to tighten their belts as about 9.6 million, or 42 percent of total borrowers that use consumer lenders, are already at or above their lending limit and unable to seek new loans, according to the Financial Services Agency.
Of those turned down by consumer lenders in the past 12 months, about 45 percent responding to a survey by the Japan Financial Services Association said they had given up loan financing and cut their spending to zero.
"People would likely to stop spending on luxury products. Leisure and service providers such as pachinko business might get hit and some may also stop sending their children to private schools," Promise's president Ken Kubo told Reuters this week.
Negative signs are already seen in Japan's pachinko and other gambling businesses where, according to the FSA report, consumer loan users often spend their money.
An executive from a major pachinko hall operator said the company had an internal meeting in January to brace for a possible negative impact from the new regulations. Their calculations showed that the lending squeeze may weigh on pachinko sales by about 10 percent, he said.
Waseda University professor Tomoaki Sakano expects the regulations, originally aimed to restrict loansharks and multiple borrowings by consumers, could weigh on Japan's GDP by 0.395 percent or 2.29 trillion yen if consumer lenders halve their loans amount.
http://in.reuters.com/article/idINIndia-49426720100618
2010 - Average Workers Spending on Lunch and Drinking Going Down
Salaried workers' daily lunch expenses average ¥500, the lowest in the past decade, amid the anemic economy, an annual survey by a Shinsei Bank subsidiary showed.
The figure is down ¥90 from last year, marking the third straight year of decline, Shinsei Financial Co. said Tuesday.
The wage earners' average monthly spending money, including their lunch expenses, stands at ¥40,600, down ¥5,000 from the previous year, reflecting a growing tendency to tighten their purse strings against the backdrop of falling annual incomes and the recession, observers said.
They mostly spend their money on lunch, entertainment and drinking, and the average expense for drinking comes to ¥4,190 for one occasion, down nearly ¥1,000 from last year.
By area, wage earners' monthly spending money in the Kansai region surrounding Osaka averaged ¥36,700, down ¥9,300, while that in the Tokai region centering on Nagoya is at ¥37,300, down ¥2,600. But the corresponding figure in the Tokyo metropolitan area is up ¥1,200 to ¥51,800, according to the nationwide online survey of 1,000 salaried workers in their 20s to 50s, conducted on April 16 and 17.
http://search.japantimes.co.jp/cgi-bin/nn20100611b6.html
The figure is down ¥90 from last year, marking the third straight year of decline, Shinsei Financial Co. said Tuesday.
The wage earners' average monthly spending money, including their lunch expenses, stands at ¥40,600, down ¥5,000 from the previous year, reflecting a growing tendency to tighten their purse strings against the backdrop of falling annual incomes and the recession, observers said.
They mostly spend their money on lunch, entertainment and drinking, and the average expense for drinking comes to ¥4,190 for one occasion, down nearly ¥1,000 from last year.
By area, wage earners' monthly spending money in the Kansai region surrounding Osaka averaged ¥36,700, down ¥9,300, while that in the Tokai region centering on Nagoya is at ¥37,300, down ¥2,600. But the corresponding figure in the Tokyo metropolitan area is up ¥1,200 to ¥51,800, according to the nationwide online survey of 1,000 salaried workers in their 20s to 50s, conducted on April 16 and 17.
http://search.japantimes.co.jp/cgi-bin/nn20100611b6.html
May - wholesale prices mark 1st rise in 17 months
Japan's wholesale prices grew 0.4 percent in May from a year earlier, marking the first rise in 17 months after gradually slowing decline, on the back of price rises for raw materials such as crude oil, the Bank of Japan said Thursday.
The index, whose losing streak began in January 2009 under the weight of the global financial crisis spawned by the demise of Lehman Brothers Holdings Inc. in 2008, hit a record 8.5 percent drop in July and August last year before starting to recoup lost ground.
The prices, gauged by the central bank's corporate goods price index, stood at 103.2 against the 2005 base of 100, the BOJ said in a preliminary report.
The prices marked a 0.1 percent gain from April against the forecast of unchanged growth.
A BOJ official said that overseas production mainly in China is steadily expanding, but some prices of raw materials are falling in light of the Greek debt crisis and China's monetary tightening.
The official also said that it remains "difficult to tell" at this juncture whether the index will continue to post a year-on-year rise, making it uncertain whether Japan will see an end to deflation.
By product, prices for petroleum and coal products surged 30.1 percent and nonferrous metals climbed 18.0 percent, while transportation equipment dropped 2.8 percent.
Import prices jumped 13.3 percent in terms of the yen and gained 18.8 percent in terms of contract currencies.
Export prices fell 1.3 percent in yen terms and rose 3.1 percent on a contract currency basis.
http://www.breitbart.com/article.php?id=D9G86S3O0&show_article=1
The index, whose losing streak began in January 2009 under the weight of the global financial crisis spawned by the demise of Lehman Brothers Holdings Inc. in 2008, hit a record 8.5 percent drop in July and August last year before starting to recoup lost ground.
The prices, gauged by the central bank's corporate goods price index, stood at 103.2 against the 2005 base of 100, the BOJ said in a preliminary report.
The prices marked a 0.1 percent gain from April against the forecast of unchanged growth.
A BOJ official said that overseas production mainly in China is steadily expanding, but some prices of raw materials are falling in light of the Greek debt crisis and China's monetary tightening.
The official also said that it remains "difficult to tell" at this juncture whether the index will continue to post a year-on-year rise, making it uncertain whether Japan will see an end to deflation.
By product, prices for petroleum and coal products surged 30.1 percent and nonferrous metals climbed 18.0 percent, while transportation equipment dropped 2.8 percent.
Import prices jumped 13.3 percent in terms of the yen and gained 18.8 percent in terms of contract currencies.
Export prices fell 1.3 percent in yen terms and rose 3.1 percent on a contract currency basis.
http://www.breitbart.com/article.php?id=D9G86S3O0&show_article=1
May -consumer sentiment improves for 5th straight month
Japan's consumer sentiment improved in May for the fifth straight month as an economic recovery helped ease concern over employment prospects, government data showed Thursday.
The index of confidence among households made up of two or more people rose by 0.8 point from the previous month to 42.8, the highest reading since October 2007 when it matched that figure, the Cabinet Office said in its monthly survey.
Despite the continued improvement, the sentiment index remained below the threshold of 50, indicating that pessimists outnumbered optimists. The office left its assessment of the country's consumer confidence unchanged, saying it "has continued improving."
Three of the four components marked increases. Employment gained 1.8 points to an index reading of 40.1, income growth grew 0.7 point to 41.1, and livelihoods went up 0.6 point to 43.0.
But willingness to buy durable goods fell 0.1 point to 46.9, marking the first drop in six months following a revision made to the government incentive program for the purchase of environment-friendly consumer appliances in April.
The survey also showed that more people expected prices to rise, but Tsumura said this does not immediately change the government's view that the nation is mired in deflation.
The percentage of respondents expecting rises in prices over the coming year surged by 6.8 percentage points from the previous month to 46.0. The percentage of those forecasting falls fell by 3.2 points to 13.1.
http://www.breitbart.com/article.php?id=D9G89M480&show_article=1
The index of confidence among households made up of two or more people rose by 0.8 point from the previous month to 42.8, the highest reading since October 2007 when it matched that figure, the Cabinet Office said in its monthly survey.
Despite the continued improvement, the sentiment index remained below the threshold of 50, indicating that pessimists outnumbered optimists. The office left its assessment of the country's consumer confidence unchanged, saying it "has continued improving."
Three of the four components marked increases. Employment gained 1.8 points to an index reading of 40.1, income growth grew 0.7 point to 41.1, and livelihoods went up 0.6 point to 43.0.
But willingness to buy durable goods fell 0.1 point to 46.9, marking the first drop in six months following a revision made to the government incentive program for the purchase of environment-friendly consumer appliances in April.
The survey also showed that more people expected prices to rise, but Tsumura said this does not immediately change the government's view that the nation is mired in deflation.
The percentage of respondents expecting rises in prices over the coming year surged by 6.8 percentage points from the previous month to 46.0. The percentage of those forecasting falls fell by 3.2 points to 13.1.
http://www.breitbart.com/article.php?id=D9G89M480&show_article=1
Secured Capital Shareholder looks to increase Japanese Real Estate Investments
Pacific Alliance Group, an Asia-focused fund investment manager, said it expects to at least double its investments in Japan over the next year or so as financial institutions speed up sales of distressed assets.
Pacific Alliance Group planned to raise investments in Japan to as much as $500 million over the next 1- years from about $200 million now, Anthony Miller, chief executive of Pacific Alliance Japan, said at the Reuters Global Real Estate and Infrastructure Summit.
"The Asian fund has approximately $200 million invested in Japan, which we've invested in the last 18 months," Miller said via telephone from Tokyo. "It is our intention to grow our business here significantly."
Miller said Pacific Alliance Group planned to increase investments in Japan, the world's second-largest economy and Asia's biggest property market, by $200-300 million over the next 12-18 months.
Sales of distressed property assets had been slow as owners were unwilling to get rid of them at rock-bottom prices.
"That seems to be changing. In the last 2- months since the end of March, we have seen a dramatic increase in the number of distressed assets that are seriously for sale," said Miller, a Harvard graduate who joined Pacific Alliance Japan in June 2009.
He said Pacific Alliance would be looking for opportunities in Japan as tens of billions of dollars worth of debt, including securitized debt, met maturity dates in the coming year or so.
Sales of distressed assets would likely speed up in the meantime as some financial institutions are not expected to roll over their debt, Miller said.
Morgan Stanley won an agreement with lenders for a 60-day extension on about $2.4 billion in loans used in a troubled hotel investment in Japan, sources said in April, with the market watching closely what would happen once that extension expired.
Miller said Pacific Alliance Group would be looking at hard assets, such as office and residential property, although resorts in Japan would be its least favorite as they were hit the hardest during a downturn.
Miller noted that he was mindful of external risks that could affect Japan's economy and real estate sector.
"If China falls off the cliff, Japan will certainly suffer. The biggest risk to Japan is China and the second is America. The third is Europe," he said.
Pacific Alliance Group had about $5 billion in total assets under management, which included $2.35 billion AUM by Secured Capital, in which it held a 46 percent stake, he said.
http://www.reuters.com/article/idUSTRE65D3XY20100614
Wednesday, June 9, 2010
Japan to exempt foreigners from corporate bond tax
May 31 (Reuters) - Japan hopes to lure overseas investors to corporate bonds by temporarily abolishing taxes on interest income starting next month, but analysts say it may face an uphill battle due to low domestic interest rates.
Out of some 68.1 trillion yen ($748 billion) in Japanese corporate bonds outstanding as of March 2009, foreigners held a mere 0.6 percent.
One reason, Japanese Financial Services Agency (FSA) officials say, is that overseas investors have until now been charged a 15 percent withholding tax on interest income they gain from Japanese corporate bonds.
In contrast, overseas investors are in principle exempt from paying such taxes in the United States, Britain, Germany and France.
Japanese FSA officials say they hope the decision to abolish the tax charged to overseas holders of corporate bonds starting on June 1 will help change the picture.
"We do not have a numerical target for measuring success," Hironori Kawauchi, director of the FSA's tax office, told Reuters on Monday.
"But we are optimistically hoping that it will be possible to achieve a situation where their performance, in the sense of attractiveness to investors, will not be worse than other financial products, such as stocks, government bonds or municipal debt," Kawauchi said, referring to Japanese corporate bonds.
The new tax exemption will cover corporate bonds that are issued on or before March 31, 2013, even those that were issued before June. The FSA will aim to eventually make the scheme
LOW INTEREST RATES
The new scheme will also cover debt such as convertible bonds, commercial paper, so-called "zaito" agency bonds issued by government-affiliated agencies, and Samurai bonds -- yen-denominated bonds issued in Japan by non-Japanese entities.
Japan adopted similar tax exemptions for Japanese government bonds in 1999, and for municipal bonds in 2007.
Analysts said a sudden influx of foreign money into Japanese corporate bonds was unlikely, despite the new scheme.
Toshihiro Uomoto, executive director of credit investment strategy and analysis for Nomura Securities, said the tax exemption may help increase demand for Japanese corporate debt among passive-strategy investors overseas.
"Some overseas investors conduct index-based investment in a manner similar to the passive-strategy investment conducted by Japanese pension funds," Uomoto said.
Some benchmark bond indexes that such overseas passive-strategy investors follow include Japanese corporate bonds. But because of the taxation scheme, such foreign players have avoided buying Japanese corporate bonds until now, choosing to take exposure in JGBs instead, Uomoto said.
That may change, but the impact is likely to be limited to corporate bonds with relatively large issuance lots, he said.
Uomoto and other analysts agree that the biggest hindrance to overseas investment in Japanese corporate bonds is Japan's low interest rates, and the bonds' low yield spreads over JGBs.
"I think this measure can be viewed very positively from the standpoint of making it easier for
overseas investors to enter the market if interest rates were to rise in the future," said Hidenori Suezawa, chief strategist for Nikko Cordial Securities.
"But if you ask whether their (market) share will immediately rise because of this, you have to wonder whether that will be the case," Suezawa said.
Indeed, overseas holdings of JGBs and municipal bonds remain small even though foreigners are already exempt from taxes on interest income earned on such bonds.
As of end-March 2009, in addition to holding only 0.6 percent of Japanese corporate bonds, overseas investors held just 0.2 percent of the 66.7 trillion yen in Japanese municipal bonds outstanding, and 7.1 percent of some 797.7 trillion yen in JGBs.
Such figures pale in comparison with the 25.2 percent overseas players held in U.S. bonds including government and corporate debt and 60.1 percent in British bonds, according to data compiled by Japan's FSA. ($1=91.05 Yen)
http://www.reuters.com/article/idUSTOE64U05M20100531?type=marketsNews
Out of some 68.1 trillion yen ($748 billion) in Japanese corporate bonds outstanding as of March 2009, foreigners held a mere 0.6 percent.
One reason, Japanese Financial Services Agency (FSA) officials say, is that overseas investors have until now been charged a 15 percent withholding tax on interest income they gain from Japanese corporate bonds.
In contrast, overseas investors are in principle exempt from paying such taxes in the United States, Britain, Germany and France.
Japanese FSA officials say they hope the decision to abolish the tax charged to overseas holders of corporate bonds starting on June 1 will help change the picture.
"We do not have a numerical target for measuring success," Hironori Kawauchi, director of the FSA's tax office, told Reuters on Monday.
"But we are optimistically hoping that it will be possible to achieve a situation where their performance, in the sense of attractiveness to investors, will not be worse than other financial products, such as stocks, government bonds or municipal debt," Kawauchi said, referring to Japanese corporate bonds.
The new tax exemption will cover corporate bonds that are issued on or before March 31, 2013, even those that were issued before June. The FSA will aim to eventually make the scheme
LOW INTEREST RATES
The new scheme will also cover debt such as convertible bonds, commercial paper, so-called "zaito" agency bonds issued by government-affiliated agencies, and Samurai bonds -- yen-denominated bonds issued in Japan by non-Japanese entities.
Japan adopted similar tax exemptions for Japanese government bonds in 1999, and for municipal bonds in 2007.
Analysts said a sudden influx of foreign money into Japanese corporate bonds was unlikely, despite the new scheme.
Toshihiro Uomoto, executive director of credit investment strategy and analysis for Nomura Securities, said the tax exemption may help increase demand for Japanese corporate debt among passive-strategy investors overseas.
"Some overseas investors conduct index-based investment in a manner similar to the passive-strategy investment conducted by Japanese pension funds," Uomoto said.
Some benchmark bond indexes that such overseas passive-strategy investors follow include Japanese corporate bonds. But because of the taxation scheme, such foreign players have avoided buying Japanese corporate bonds until now, choosing to take exposure in JGBs instead, Uomoto said.
That may change, but the impact is likely to be limited to corporate bonds with relatively large issuance lots, he said.
Uomoto and other analysts agree that the biggest hindrance to overseas investment in Japanese corporate bonds is Japan's low interest rates, and the bonds' low yield spreads over JGBs.
"I think this measure can be viewed very positively from the standpoint of making it easier for
overseas investors to enter the market if interest rates were to rise in the future," said Hidenori Suezawa, chief strategist for Nikko Cordial Securities.
"But if you ask whether their (market) share will immediately rise because of this, you have to wonder whether that will be the case," Suezawa said.
Indeed, overseas holdings of JGBs and municipal bonds remain small even though foreigners are already exempt from taxes on interest income earned on such bonds.
As of end-March 2009, in addition to holding only 0.6 percent of Japanese corporate bonds, overseas investors held just 0.2 percent of the 66.7 trillion yen in Japanese municipal bonds outstanding, and 7.1 percent of some 797.7 trillion yen in JGBs.
Such figures pale in comparison with the 25.2 percent overseas players held in U.S. bonds including government and corporate debt and 60.1 percent in British bonds, according to data compiled by Japan's FSA. ($1=91.05 Yen)
http://www.reuters.com/article/idUSTOE64U05M20100531?type=marketsNews
April - Izakaya sales down 6.6% YOY - Cutting Prices
With consumer spending in a slump, many izakaya operators are slashing labor to cut prices.
Watami Co. is planning to open a chain of 10 budget izakaya pubs by the end of the year, with 70-80 percent of the menu priced at 250 yen.
"Since last summer, customers have been quickly tightening their purse strings," said Yutaka Kuwahara, the company's president. "The market is going to continue shrinking, slowly but surely."
At the budget Watami, customers use a digital menu to place orders at their table before picking up the orders at the kitchen themselves.
By adopting this system, Watami will cut labor costs, thereby making the cheaper menu a reality. At the regularly priced Watami izakaya, the average patron spends 2,600 yen. The company predicts that figure will be as little as 1,800 yen for customers at the budget izakaya.
In May, Colowide Co., which operates the Amataro izakaya chain, cut prices on 40 percent of its menu to under 400 yen, with many dishes costing as little as 299 yen. The company reduced its prices by preparing its food at its factory to lessen the burden on each kitchen.
"We also want to attract customers who don't spend much," said Shinichiro Hayakawa, head of operations.
Sanko Marketing Foods Co. has been leading this low-price competition since May 2009 by pricing all items at its izakaya pubs--such as Toho-kenbun-roku and Tsuki-no-Shizuku--at 270 yen.
Izakaya sales dropped 6.6 percent in April from the same month last year, marking the 16th straight month of decline.
With fewer people visiting izakaya after work and many people opting to eat-in--plus to the fact that fewer younger people drink--this price battle seems to have just begun.
http://www.yomiuri.co.jp/dy/business/T100603004657.htm
Watami Co. is planning to open a chain of 10 budget izakaya pubs by the end of the year, with 70-80 percent of the menu priced at 250 yen.
"Since last summer, customers have been quickly tightening their purse strings," said Yutaka Kuwahara, the company's president. "The market is going to continue shrinking, slowly but surely."
At the budget Watami, customers use a digital menu to place orders at their table before picking up the orders at the kitchen themselves.
By adopting this system, Watami will cut labor costs, thereby making the cheaper menu a reality. At the regularly priced Watami izakaya, the average patron spends 2,600 yen. The company predicts that figure will be as little as 1,800 yen for customers at the budget izakaya.
In May, Colowide Co., which operates the Amataro izakaya chain, cut prices on 40 percent of its menu to under 400 yen, with many dishes costing as little as 299 yen. The company reduced its prices by preparing its food at its factory to lessen the burden on each kitchen.
"We also want to attract customers who don't spend much," said Shinichiro Hayakawa, head of operations.
Sanko Marketing Foods Co. has been leading this low-price competition since May 2009 by pricing all items at its izakaya pubs--such as Toho-kenbun-roku and Tsuki-no-Shizuku--at 270 yen.
Izakaya sales dropped 6.6 percent in April from the same month last year, marking the 16th straight month of decline.
With fewer people visiting izakaya after work and many people opting to eat-in--plus to the fact that fewer younger people drink--this price battle seems to have just begun.
http://www.yomiuri.co.jp/dy/business/T100603004657.htm
May - Bankruptcies fell 15%, off for 10th month
Corporate bankruptcies fell in May for the 10th straight month, extending the longest streak of declines in five years as the economic recovery helped more firms stay afloat.
Business failures slid 15.1 percent from a year earlier to 1,021 cases, Tokyo Shoko Research Ltd. said Tuesday.
A resurgence in overseas demand helped the economy sustain its rebound in the first quarter. While government lending programs have been helping, the decline in bankruptcies is increasingly reflecting better business prospects for Japanese companies, economist Yoshimasa Maruyama said.
"The economy itself is improving," Maruyama, a senior economist at Itochu Corp., said before the report was released. "It's been a year since the rebound began. It's typical for the number of bankruptcies to fall by now."
Even so, three listed companies collapsed in May
http://search.japantimes.co.jp/cgi-bin/nb20100609n3.html
Business failures slid 15.1 percent from a year earlier to 1,021 cases, Tokyo Shoko Research Ltd. said Tuesday.
A resurgence in overseas demand helped the economy sustain its rebound in the first quarter. While government lending programs have been helping, the decline in bankruptcies is increasingly reflecting better business prospects for Japanese companies, economist Yoshimasa Maruyama said.
"The economy itself is improving," Maruyama, a senior economist at Itochu Corp., said before the report was released. "It's been a year since the rebound began. It's typical for the number of bankruptcies to fall by now."
Even so, three listed companies collapsed in May
http://search.japantimes.co.jp/cgi-bin/nb20100609n3.html
Economy began recovery after hitting bottom in March 2009
The economy began to recover after bottoming out in March 2009, ending an economic contraction that lasted for about 17 months since November 2007, the Cabinet Office said Monday.
A panel of economists and experts for the Cabinet Office determined that the period of the latest recession is almost an average for the past 13 economic cycles, which comes in at 16 months.
The recession deepened due to a financial crisis stemming from the failure in 2008 of Lehman Brothers Holdings Inc.
The previous recession continued 14 months from December 2000 to January 2002.
The economy then started expanding in February 2002 and hit the peak in October 2007, which means the expansion lasted for the longest 69 months in the postwar period.
http://www.breitbart.com/article.php?id=D9G69A100&show_article=1
A panel of economists and experts for the Cabinet Office determined that the period of the latest recession is almost an average for the past 13 economic cycles, which comes in at 16 months.
The recession deepened due to a financial crisis stemming from the failure in 2008 of Lehman Brothers Holdings Inc.
The previous recession continued 14 months from December 2000 to January 2002.
The economy then started expanding in February 2002 and hit the peak in October 2007, which means the expansion lasted for the longest 69 months in the postwar period.
http://www.breitbart.com/article.php?id=D9G69A100&show_article=1
2010 Q1 - Economy Grows by 4.9%
Japan's real GDP grew 1.2 percent in Q1 2010, or an annualized 4.9 percent, from the previous quarter, marking the fourth consecutive quarter of growth. Nominal GDP also grew 1.2 percent (annualized 4.9 percent), the second straight quarterly rise.
External demand pushed up real GDP 0.7 percent and domestic demand 0.6 percent. Exports increased 6.9 percent, more than the 5.8 percent posted the previous quarter, driven by exports to Asian markets including China. Consumer spending, which accounts for about 60 percent of GDP, rose 0.3 percent — for the fourth straight quarterly rise.
Public works investment slipped 1.7 percent, the third straight quarterly decline. But capital investment grew 1 percent, up for the second consecutive quarter. Housing investment rose 0.3 percent, the first rise in 15 months.
Growth in consumer spending has been helped by government measures to subsidize consumers who purchase eco-friendly products. Since the measures are due to expire by the end of fiscal 2010, consumer spending might tumble. Unemployment is still relatively high (5.1 percent in April) and basic salaries of workers have been decreasing. There is also the risk that exports will stall as the governments of emerging economies try to slow down overheated economies.
http://search.japantimes.co.jp/cgi-bin/ed20100605a2.html
External demand pushed up real GDP 0.7 percent and domestic demand 0.6 percent. Exports increased 6.9 percent, more than the 5.8 percent posted the previous quarter, driven by exports to Asian markets including China. Consumer spending, which accounts for about 60 percent of GDP, rose 0.3 percent — for the fourth straight quarterly rise.
Public works investment slipped 1.7 percent, the third straight quarterly decline. But capital investment grew 1 percent, up for the second consecutive quarter. Housing investment rose 0.3 percent, the first rise in 15 months.
Growth in consumer spending has been helped by government measures to subsidize consumers who purchase eco-friendly products. Since the measures are due to expire by the end of fiscal 2010, consumer spending might tumble. Unemployment is still relatively high (5.1 percent in April) and basic salaries of workers have been decreasing. There is also the risk that exports will stall as the governments of emerging economies try to slow down overheated economies.
http://search.japantimes.co.jp/cgi-bin/ed20100605a2.html
Tuesday, June 1, 2010
Usury Laws into Full Effect
From June 18, a revised law controlling moneylenders, which has been applied incrementally up to now, goes into full force.
A salient feature of the law, reports Nikkan Gendai (May 19), will be a limit on the loan amount to less than one-third of the borrower’s annual income. At the same time, nearly all consumer loan companies are ceasing to extend loans to housewives.
According to the national census of 2005, Japan had 16.4 million full-time housewives, of whom an estimated 4.75 million, or 29 percent, had taken out consumer loans.
A salient feature of the law, reports Nikkan Gendai (May 19), will be a limit on the loan amount to less than one-third of the borrower’s annual income. At the same time, nearly all consumer loan companies are ceasing to extend loans to housewives.
According to the national census of 2005, Japan had 16.4 million full-time housewives, of whom an estimated 4.75 million, or 29 percent, had taken out consumer loans.
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