Japanese Economy Recovering - GDP and Inflation Up

Japan’s Q2 GDP was revised sharply upwards to 0.9% (3.8% at an annualised rate) from an initial estimate of 0.6%. Increased estimates of companies' capital spending and public investment drove the upward revision. GDP for Q1 was also raised to an annualised rate of 4.1%, from 3.8%. The pick-up in business investment was particularly welcome as evidence that the economy was gaining fundamental strength.

The Bank of Japan said that Japan's economy was "recovering moderately", boosted by a pick-up in exports and in companies' investment in fixed assets. Public investment is also rising while the housing sector is looking stronger.

A gentle housing recovery in Japan may be underway as potential buyers respond to low borrowing costs and a sense that prices have bottomed after years of declines. Ten year fixed rate bank mortgage rates have fallen to 1.5%. Housing starts have been on an upward trend for some time and new construction in the 2013 fiscal year could top the one million mark for the first time in five years.
Prime Minister Shinzo Abe is to decide by early October whether to allow the sales tax to rise from 5% to 8% next April. He has tied his decision to the economy’s growth rate and the Tankan survey of business investment, among other data. If the sales tax increase is to go ahead as planned then there may be a supplementary fiscal stimulus package and/or further monetary easing by the BOJ to offset any perceived slowdown in consumer spending. The governor of the BOJ does not think the fiscal squeeze will "break" the Japanese economy.

Inflation in Japan rose to 0.7% in July, its highest level in almost five years, as the effects of a weaker yen pushed up the cost of fuel and electricity. Excluding the cost of energy, consumer prices fell 0.1% over the year. Nonetheless, some observers detect a demand driven pick- up in prices and a possible pick-up in wages; both of which are necessary if deflationary pressures are easing and the BOJ is to attain its target of a sustainable 2% inflation rate. Workers’ bonus payments have risen but base salaries are generally flat.

Japan's Real Cost of Borrowing turns Negative on "Abenomics" for 1st time since Summer 2008

Japan's real cost of long term borrowing has dropped below zero, bringing an end to years of high real rates and marking a milestone for "Abenomics".
Negative real interest rates are a key feature of Shinzo Abe's war on deflation, which aims to encourage bond heavy investors to seek higher returns through stocks, loans or property, or buying assets overseas.
Such portfolio rebalancing is expected to feed into higher prices, as banks begin to chase growth at home and as institutions such as life assurance companies swap JGBs for foreign bonds, undermining the Yen. Inflation also erodes gross government debt, which now stands at 240% of GDP.
Data on Friday showed that Japan's core consumer price inflation index rose from 0.7% in July to 0/8% in August pushed up mostly by higher costs for imported fuel. Meanwhile the benchmark 10 year government bond yield sank from just over 0.8% to 0.72%.
That means that investors long bonds during August were losing money in inflation adjusted terms. That is the first time that this has happened in Japan since summer 2008, when fuel prices pushed core CPI as high as 2% while 10 year bonds were yielding about 1.5%.

As portfolio rebalancing plays out, the Bank of Japan has promised to take up the slack, ramping up bond purchases to keep nominal interest rates as low as possible.
Since April, when new governor Haruhito Kuroda announced a shift to a new phase of "quantitive and qualitative monetary easing", the BOJ has been mopping up about JPY7.5tn of bonds a month, equivalent to about 3/4 of coupon bearing debt issued.

Source - FT 1 October 2013

Japanese Anti Yakuza Laws Not working all that well

The discovery of 230 transactions with organized crime syndicates totaling about Y200 million ($2 million) at Mizuho Bank Co. – one of Japan’s largest banks — shows how easily finance-savvy yakuza can secure funds in the world’s third-biggest economy, despite repeated crackdowns.
Over the past two decades, lawmakers and regulators have passed a series of laws and ordinances aimed at curtailing organized crime. Starting with laws in 1991 making typical yakuza activity and money laundering illegal, Japan has been stepping up penalties and stiffening up “know your client” rules. Banks were obliged to check customers’ IDs and report information on money laundering, while regulators were given more authority to monitor suspected money-laundering behavior.
But those rules look tame by international standards. Under 2011 yakuza-exclusion ordinances, companies are merely required to “try” to confirm they are not engaged in transactions with a gang member. Failure to make adequate efforts to ID a client could lead to a prison term of up to one year or a fine of up to Y1 million.
The weak penalties, coupled with wiggle room in implementation, have invited international criticism. In fact, the number of queries to police about run-ins with mobsters has risen by 33% over the four years through 2012, according to the National Police Agency. The criticism has forced Japan to launch its first comprehensive assessment of the state of money laundering here.
Financial Services Agency officials argue that awareness among banks of the gravity of laundering money for the yakuza has risen exponentially. They point to Japan’s housing loan corporations, which received Y685 billion in public funds in 1996 after they were unable to recover loans, including many that were knowingly made to yakuza organizations. Mizuho’s problem was more a failure by bankers to report to their superiors when they found out they were lending to the mob, FSA officials said.
Until the Mizuho case, no major bank had been found guilty of dealing with “anti-social forces” – Japanese official-speak to describe gangsters — since 2007, and the situation is improving, they said.
You be the judge. Here are some of the most recent and/or high-profile cases Japanese financial regulators have found over the past six years, according to the FSA or the Kanto Local Finance Bureau:
2010: Korea Exchange Bank’s Japan branches suspend new business operations for three months after an Osaka branch manager accepts a deposit into a customer’s account from someone with ties to yakuza. The money — Y400 million — was to help the customer buy a golf course. The bank apologized for the trouble caused and submitted a business improvement plan.
2010: Regional lender Miura Fujisawa Shinkin Bank, based in Tokyo bed town Yokosuka, says it knowingly made loans totaling more than Y450 million to a criminal syndicate and related individuals and organizations for over 17 years, and created savings accounts for the organization. The bank apologized and then-Chairman Yoshihisa Ogawa resigned.
2009: Citibank’s Japan branches suspend promotional sales activities in its retail banking division for one month after regulators say it had not set up an adequate system to detect and monitor suspicious transactions and failed to set up procedures to control any dealings with possible “anti-social forces.” This was Citibank Japan’s second of three suspensions for what regulators said were lax controls. Citibank issued an apology and a business improvement plan.

2007: Mitsubishi UFJ Financial Group Inc.’s core banking unit, Bank of Tokyo-Mitsubishi UFJ, suspends lending to new corporate customers for seven days for knowingly making loans in the 1970s to organized crime member Kunihiko Konishi. Top management of the bank’s precursor Sanwa Bank went so far as to permanently station staff in the mob member’s office, regulators said. The bank apologized and said it was taking the matter seriously.

http://blogs.wsj.com/japanrealtime/2013/09/27/in-japan-real-gangstas-go-to-the-bank/?mod=WSJBlog

Japan Business Commentary: 加藤友康社長が出演予定カンブリア宮殿放送中止！（カトープレジャーグループ）

Japan Business Commentary: 加藤友康社長が出演予定カンブリア宮殿放送中止！（カトープレジャーグループ）


カトープレジャーグループ（ＫＰＧ」加藤友康  http://tokumei10.blogspot.com.au/2008/04/blog-post_15.html


ビデオ-  http://www.youtube.com/user/katotomoyasuorix/videos?view=0
ビデオ- http://i.youku.com/u/id_UNTMwNTc3NDgw




http://n-seikei.jp/2012/11/post-12151.html

Weak Yen Helps Push Real Estate Sales

While a lot of excitement over a weakening yen has been focused on the boost it may give to Japan’s exports, in Tokyo, the depreciating currency may be acting as a tailwind for a quiet boom in high-end private real estate.


According to Tokyu Land Corp. 8815.TO +4.34%, Japan’s fourth-largest real estate group, investors from other countries in Asia have been increasing their purchases of high-end real estate in Japan’s capital since the start of the year.

“We’ve especially seen a rise in investors from Singapore,” Takumi Mochizuki, a Tokyu Land spokesman, told JRT last week.

High-end properties in districts such as Roppongi – where many foreign financial corporations are headquartered – are especially popular, Mr. Mochizuki said.

“For outside investors, these properties have essentially become 30% cheaper,” said Mr. Mochizuki, referring to the 27% drop of the yen versus the dollar since November last year. That drop has been precipitated by the aggressive anti-deflation policies of Prime Minister Shinzo Abe — and in particular his push for a dramatic increase in the amount of cash the central bank pumps into the economy, a measure that generally has the added effect of decreasing the value of the currency.

The dollar has been appreciating strongly against the yen since the middle of November last year, and last week rose to 100 yen for the first time in 4 years and one month.

The Japan branch of Jones Lang LaSalle JLL -0.13%, a global realty corporation, also said that high-end domestic property aimed at affluent individuals from abroad is selling well.

“We’ve been holding four or five corporate events aimed at affluent individuals in Singapore since November last year,” spokesman Tomoyuki Suzuki told JRT. Sales at those talks have been largely successful, with “roughly 40% of customers” deciding to buy, said Mr. Suzuki. Properties average ¥50-¥70 million in worth, he said. Jones Lang LaSalle plans to hold similar events with potential customers in Hong Kong as well this summer, he said.

There are a variety of reasons for the investor interest in high-end property, Mr. Suzuki said, starting with a two-decade slump in land prices that have pushed them close to 80% below their peak in 1991. “Property prices have stagnated for the past 20 years. I think there are many investors who think prices will begin to rise from now on,” said Mr. Suzuki. “Many have also been considering widening their portfolio (to include Japan), in addition to places like London and Australia.”

“The weak yen has been a good reason to follow through on these needs,” he said.


http://blogs.wsj.com/japanrealtime/2013/05/13/weak-yen-helps-push-high-end-real-estate-sales/

Central Bank Cash Printing leads to Asian Property Investment Boom

As central banks print cash to boost moribund economies, investors in Asia wanting to hedge against rising prices are dumping gold and doubling down on property.

They are driven by the search for yield as surprisingly benign inflation dims the appeal of bullion, but it's a risky play given lofty valuations for real estate.

The trend is most visible in the frenzy around real estate investment trusts (REITs) in Asia, where issuance ex-Japan more than quadrupled to $4.33 billion through early May from the same period last year and valuations are at their highest since before the 2008 financial crisis.

"I have been saying for the last two years that REITs are a good inflation hedge," said Charlie Chan, one of the best-known hedge fund managers in Asia, who made a killing by betting on them in 2012.

"They are easier to value, you get what you see and you own the building and if there is inflation, the building price will just go up," added Chan.

His $200 million hedge fund returned 63 percent last year and is up a further 35 percent in 2013. Asia hedge funds, by comparison, returned 10 percent last year and are up about 9 percent this year, according to Eurekahedge figures.

REITs such as Cambridge Industrial Trust made up more than half his portfolio at one point last year, Chan said.

Since REITs hold various kinds of properties, from factories to shopping malls and hotels, they benefit from higher rents when economies boom and prices rise.

Unlike gold, which doesn't pay any dividend, REITs also provide a steady flow of income. Yields for REITs in Asia stand at 4.4 percent on average, according to data from StarMine.

Spot gold fell 13 percent this year to May 7. By comparison, the MSCI Asia Pacific REITs index rose 14 percent, according to data from Thomson Reuters Datastream.

"Yield-hungry investors are increasingly being squeezed out of the sovereign bond markets by central bankers everywhere," said David Baran, co-founder of hedge fund Symphony Financial Partners in Tokyo. "REITs are an increasingly compelling asset class."

NEW OFFER FLOOD

REIT indices in Singapore and Hong Kong rose 13 percent and 17 percent respectively year-to-date, with both reaching all-time highs in the past two weeks.

In response to the red-hot demand, companies are flooding the market with new offerings.

Mapletree Greater China Commercial Trust is a prime example, raising $2.06 billion in Singapore's largest ever REIT IPO in February. The 5.6 percent yield offered saw institutional investors bid nearly 30 times the units on offer.

Issuance of REITs in Asia ex-Japan has more than quadrupled so far in 2013 from the same period last year to $4.33 billion, according to Thomson Reuters data, and there is no sign of a slowdown given a $4 billion pipeline in the coming two to three months from IPOs alone.

Assets under management at real estate funds investing in Asia and Japan rose to a record $55 billion and $20 billion respectively at the end of March, data from Lipper showed.

With billions more expected from follow-on deals, 2013 looks to be the biggest year for REIT issuance since at least 2007.

"Suddenly, you see a lot of REITs coming on to the market and we are seeing a lot of companies that are in the radar because they are paying better yields," said Jalil Rasheed, a Singapore-based investment director at Invesco Asset Management.


COSTLY PROPERTY

Investors are stretching valuations, with the Bank of Japan adding fuel to the fire, with the purchase of 133.8 billion yen ($1.35 billion) of REITs since its asset buying scheme began in December 2010.

As much as 92 percent of the REITs listed in Asia have gained over the last year, with Japan Hotel Reit Investment Corp and Industrial & Infrastructure Fund more than doubling, buoyed by Prime Minister Shinzo Abe's aggressive fiscal and monetary expansion policies.

The IBES MSCI AC Asia Pacific REITs index now trades at 1.3 times book value, its highest since February 2008 and meaning investors are paying 30 percent more than the value of the underlying property.

The biggest REIT in the region by market value and trading volume, Westfield Group, trades at a record 1.6 times forward 12-month book value, 71 percent above the five-year median, according to data from StarMine. The second-most liquid, Nippon Building Fund, trades at 1.8 times or nearly 80 percent above its five-year median value.

Investors hope to tap into hotel room rates and rental rates on buildings and shopping malls that continue to soar.

Hong Kong's Swire Properties said it increased rents by up to 82 percent in the three months to March on properties such as One Island East and Cityplaza as supply remains tight.

"Regulatory measures have largely targeted the residential market. The commercial space - office buildings, shopping malls and hotels - remains buoyant," said Michael Smith, head of real estate investment banking in Asia ex-Japan at Goldman Sachs in Singapore.

"The beauty of these REIT structures is that it's a very pure exposure to commercial real estate."

http://www.chicagotribune.com/business/sns-rt-us-asia-realestate-inflationbre9490bc-20130510,0,813885.story

BOJ's Easing Floods Tokyo Real Estate With Cash

Tokyo is an important investment area. We are actively acquiring luxury condominium complexes," said Managing Director Koshiro Hiroi at Grosvenor Group Ltd. of the U.K., which in March acquired the Park Habio Azabu Tower, a high-rise condominium complex near Tokyo Tower.


Grosvenor is a prestigious realty firm, privately held by a British ducal house, that owns many properties in London's Mayfair district. It has been investing in and developing real estate mainly in Europe and North America, but is shifting toward Asia, where it can anticipate future growth. Working to increase Asian assets from 8% now to 15% of total assets, the firm has established a joint investment program with an Asian partner. Its direct investment is Y25 billion ($252 million), but total investment is projected to be Y100 billion eventually, including additional funds procured through loans and other financing.

Real-estate investment funds

Grosvenor is not alone in the growing trend to invest in Asian properties. A number of companies have set up investment funds targeting Japanese properties. Fortress Investment Group LLC of the U.S. announced in December 2012 that it had gathered enough investors to close its yen-denominated fund at its cap of Y130 billion. Over the next two years, the fund will invest in real estate and real estate-related debt.


Also worth watching is what individual Asian investors have been doing lately. In January, a Hong Kong investor purchased a commercial building in Tokyo's Omotesando district, a commercial area popular among young people, for Y1.4 billion. Richwood Capital Partners Asia Ltd. plans to put Y20-30 billion gathered from well-to-do individuals in Asia into properties in Japan. It has reportedly already invested Y3 billion in an office building and condominium complex in central Tokyo.

The most prominent and data-driven indication of the bullishness of the real-estate market in Japan is the flood of funds coming back into Japanese real-estate investment trusts (J-REITs). On March 27 the Tokyo Stock Exchange REIT index, which tracks trends in J-REIT investment, reached 1,700 for the first time since January 2008. This six-year high is all the more remarkable considering that the index was at 1,100-1,200 at the end of 2012.


Taking advantage of the phenomenal improvement in financing over the past three months, J-REITs are taking over one large property after another. For example, Nippon Building Fund Inc. and a partner recently bought the Sony Corp. office building for Y111.1 billion and the Panasonic Corp. office building for Y57 billion.

Unleashing change

Behind the recent bullishness of the Japanese real-estate market is change at the top. Beginning last December, the Shinzo Abe administration has introduced a series of economic measures, collectively known as "Abenomics," based on bold monetary policy, agile financial policy and growth strategies to stimulate private-sector investment.

Bank of Japan Gov. Haruhiko Kuroda, inaugurated on March 20, announced further monetary easing both quantitatively and qualitatively toward a price-stability target of 2%, and historically low interest rates will likely remain in place. This offers an ideal environment for real-estate investment, which generally seeks to increase profits by expanding funding through loans.

Abenomics has brought a steep depreciation of the yen and now sustains the earnings recoveries of Japanese exporters. Another notable effect of a weaker yen is that it makes dollar-denominated investments more attractive. "Investors with a specific country allocation will have more room to invest in Japan as the yen becomes weaker," said one global investor. Funds that become available with easing in Europe and the U.S. are seeking investment targets furnishing higher yields than bonds and the like. This also favors the real-estate market.

The growing understanding that the rental market has bottomed out is also a positive factor for the future profitability of real estate. Since last fall, when the supply rush ended in Tokyo's rental market, more property owners have been raising rents, mostly in high-performance, well-equipped grade-A buildings.

In a recent survey of leading securities analysts and real-estate brokers by the Nikkei Real Estate Market Report, the majority of those polled see "rents starting to rise in the latter half of 2013 and continuing to increase in 2014."

New stores, new vigor

Tokyo land prices had fallen 0.3% on the year as of Jan. 1, down for the fifth straight year. But more importantly, the pace of decline slowed by 1.0 percentage point from the previous year.

Prices rose at 84 of 2,606 locations in Tokyo covered by the Land Ministry survey, up by more than 10 times from just eight locations last year. Meanwhile, land prices in 1,014 locations remained unchanged or stopped falling, a significant increase from 100 spots the year before.


Some areas are already enjoying a welcome revival. The opening of the Tokyo Skytree tower last May has contributed to a jump in the number of people visiting the Asakusa area, which is just one station away from the city's newest landmark.

Proximity to the new Tokyo Skytree tower has made the Asakusa district more attractive for business -- about 100 new restaurants opened in Asakusa last year. Reflecting the area's popularity, land prices in the Asakusa 1-chome neighborhood, to the east of Sensoji Temple's Kaminarimon gate, rose 9% on the year for the biggest jump among all commercial districts in Tokyo.

Residential land prices in the Tama area, in western Tokyo, are also rising. For example, the area near JR Tachikawa Station is attracting many new residents because a number of major commercial complexes -- including a LaLaport shopping mall and a big-box store of Ikea, the Swedish furniture brand -- are set to open there.

Demand for housing is also improving in central Tokyo. The price of land in the Toyosu 4-chome area in Koto Ward, where many high-rise condominiums overlook Tokyo Bay, rose by 2.8% on the year. This represented the biggest increase in Tokyo's residential areas.


Goldman reawakens

Noting the market recovery for office space in Japan, Goldman Sachs also appears to have resumed its search for investment targets with attractive returns. In December its private-placement fund acquired an office building on a back street in Tokyo's Ginza commercial district.

While the building is far behind the main street that hosts designer-brand stores such as Tiffany, Louis Vuitton, Chanel and Gucci, Goldman is thought to be gunning for high returns with renovations or rebuilding. Goldman has also acquired two office buildings in central Tokyo that are over 40 years old, presumably with the same intentions.

In the investment market, the names of investment firms that once swept the Japanese market, such as Morgan Stanley and Lone Star Fund, are again coming up in conversations.

Leading real estate service firm Jones Lang LaSalle's "property clock" aggregates trends in office rents in the world's major cities. It plots rental property markets, which tend to be cyclical, as is the stock market. The fourth quarter of 2012 saw the Shanghai and Beijing markets on the cusp of a decline, following on the heels of Hong Kong and Singapore, where rents have fallen further. Tokyo, on the other hand, was identified as a market poised for growth. Moving past a long period of falling rents, the Tokyo market is entering a recovery.






http://e.nikkei.com/e/fr/tnks/Nni20130410D09HH848.htm

Japan Apartment Real Estate Proving Best: Riskless Return

Investing in Tokyo apartments beat putting money into office buildings, malls and the domestic stock and bond markets over the past five years as a housing shortage cushioned rental incomes from years of deflation.

Apartment real estate investment trusts produced the best returns, adjusted for price swings, of Japanese REITs in the five years through March, the BLOOMBERG RISKLESS RETURN RANKING shows. Daiwahouse Residential Investment Corp. (8984) led all REITs with a 5.5 percent risk-adjusted return, followed by Advance Residence Investment (3269) with a 5.4 percent gain.

REITs that buy apartments benefited from a shortage of new supply and a stable number of tenants in a nation where less than half of Japanese under the age of 40 own their own home. Japan has accelerated efforts under Prime Minister Shinzo Abe to end deflation and boost the world’s third-largest economy, including measures to revive the property industry, which has been struggling since an asset bubble burst two decades ago. The government has a target to increase assets owned by REITs by 40 percent by 2020.

“It’s all about stability,” said Hideyuki Shinkai, who helps oversees 51.4 trillion yen ($528 billion) in assets at Norinchukin Trust & Banking Co. in Tokyo and owns residential REITs he declined to name. “If you are looking for mid- to long-term investments, residential REITs are your best bet because they provide a stable yield.”
Property Revival

REITs pool investor money to buy real estate and are publicly traded like stocks. Japanese apartment REITs gained a risk-adjusted 3.2 percent in the five-year period, followed by offices at 0.9 percent and retail REITs at 2.3 percent.

The gains compared with declines of 1.7 percent for 10-year Japanese government bonds and 0.2 percent by the Topix (TPX) index, a benchmark for domestic stocks.

The risk-adjusted return, which isn’t annualized, is calculated by dividing the total return by the volatility, or the degree of daily price variation, giving a measure of income per unit of risk. A higher volatility means the price of an asset can swing dramatically in a short period, increasing the potential for unexpected losses.

The ranking compared 39 members of the Tokyo Stock Exchange (1345) REIT index, 44 publicly traded property companies, the stock benchmark and the 10-year JGBs. The 44 companies had an average 0.7 percent risk-adjusted return in the past five years.

Six of the top 10 performers in the ranking were REITS that invest in residential real estate. Daiwahouse had the best total return, with a cumulative gain of 275 percent over the five-year period, before adjusting for price swings. Advance Residence had the fourth-highest total return, at 129 percent, and the fourth- lowest volatility.

Tokyo Apartments

The supply of new apartments in Tokyo this year will reach the highest level since 2007 because of expectations of an economic recovery, according to an estimate by Real Estate Economic Institute Co. in December. The inventory will rise 9.6 percent in 2013 to about 50,000 units, according the Tokyo-based industry researcher.

“The supply of rental apartments is extremely low at the moment,” said Tokyo-based Tomoyuki Kimura, director and general manager of the corporate management department at Advance Residence, Japan’s biggest residential REIT by market value. “A lack of supply in Tokyo has boosted our occupancy rate.”

Advance Residence manages 16,127 apartments across 190 buildings and had an occupancy rate of 96 percent as of July 31, according to the company.

REITs get most of their profit from rental income, paying the majority of it as dividends. While investors receive a yield that is competitive with bonds, they can also benefit should the value of the underlying properties rise.

Supply Shortage

Residential REITs have an average yield of 4.6 percent, compared with 3.4 percent for office REITs and 4.4 percent for retail REITs that hold shopping malls and retail stores, according to Nomura Securities Co.

In a weak market, rents at residential REITs tend to decline less than office REITs and are less likely to suffer from sharp declines in occupancy rates, according to Kimura. Commercial REITs tend to be directly affected by the revenue of tenants, he said.

Housing rents in Tokyo’s 23 wards rose or fell as much as five percentage points since 2008 on average, according to Recruit Co., a housing-data provider. Office rents had more than 10 percentage points of fluctuation, according to data compiled by broker CBRE Group Inc.

The supply of new apartments in the city’s metropolitan area averaged less than 43,000 a year since the global financial crisis in 2008. That was about half of the more than 81,000 units in the 10 years to 2007, according to the institute.

Market Rally

REITs still outperformed stocks and bonds in the first three months of this year, as Abe’s push to revive the economy prompted the Bank of Japan (8301) to introduce unprecedented asset purchases that fueled a stock market rally. The Tokyo Stock Exchange REIT Index gained a risk-adjusted 2.1 percent in the first quarter, compared with a 1 percent increase for the Topix and a 0.7 percent decline for 10-year government bonds.

Nippon Prologis REIT Inc. (3283), which invests in distribution centers and warehouses, and started trading in the first quarter, was the best performer in the period with a risk- adjusted return of 2.5 percent. Activia Properties Inc. (3279), which invests mainly in commercial and office buildings in the Tokyo metropolitan area, ranked number two, with 2.2 percent.

“Office REITs are likely to outperform because they are the only type of asset that tends to benefit when the economy enters into an inflationary stage,” said Tomohiro Araki, a Tokyo-based senior analyst at Nomura. “Having said that, as time goes by, when office rents fail to rise and large tenants continue to move out, people will rediscover the attractiveness of residential REITs.”
First REITs

About 61 percent of Japanese own their own home, based on a survey by the statistics bureau. About 46 percent of people between 35 years and 39 years have their own home, while home ownership for people between 30 years and 34 years is at 30 percent, the data shows.

Japan started the REIT market in September 2001 when Nippon Building Fund Inc. (8951) and Japan Real Estate Investment Corp. (8952), which both invest in offices, were first listed. The securities were pioneered in the U.S. in the 1960s.

Nippon Residential Investment Corp., listed in 2004, was the first residential REIT to go public and was merged with Advance Residence in March 2010, according to the Association for Real Estate Securitization.

An index of residential land prices has slid by half from its 1991 peak, according to Japan Real Estate Institute. The Nikkei 225 Stock Average is about one-third of its peak in 1989, while the 10-year Japanese government bond yield is 0.62 percent compared with 8.685 percent in 1990.
High Occupancy

Housing starts fell 23 percent in the 10 years to the end of 2012 from the previous decade, according to land ministry data. They gained for a third year in 2012, up 5.8 percent, the fastest pace since 1996.

REITs that hold housing properties have 20 tenants on average per building, almost double the average 12 for an office building, according to Nomura. The average occupancy rate of residential REITs was 96 percent as of December, according to Japan’s Investment Trusts Association. It was 95 percent for office buildings.

“The risk of residential REITs not being able to pay their dividend as promised is extremely low because of stable income,” said Nomura’s Araki, who favors residential REITs over all other real estate investments. “So from that angle, the risk of investing in residential REITs is the same as investing in JGBs.”

Tokyo’s Growth

Starts Proceed (8979) Investment Corp., a Tokyo-based residential REIT that focuses on cheaper apartments mainly for singles, had an occupancy rate of 97 percent as of October, according to company material. The valuation of the REIT’s properties has increased for two years because rental income helped boost the value of its assets.

A lack of new apartments in Tokyo as the population grows will continue to support residential REITs, said Yoji Otani, an analyst at Deutsche Bank AG in Tokyo. The population in the capital has increased 6 percent to 13.1 million in the past decade, while the number of households has risen 17 percent to about 6.6 million, according to the Tokyo Metropolitan Government.

“Even though residential REITs may underperform in the early stage of an economic recovery, they are likely to pick up speed by boosting dividends when the economic growth accelerates,” Otani said.



http://www.bloomberg.com/news/2013-04-16/japan-apartment-real-estate-proving-best-riskless-return.html

April - Real Estate demand in Japan heats up

As Japanese corporate sentiment gets a boost from “Abenomics” the country’s sluggish property market is showing signs of life, with office prices in Tokyo expected to surge 10 percent over the next 18 months, according to one of the world’s largest real estate funds.

AXA Real Estate, the property arm of Europe’s second largest insurer that has 45 billion euros ($59 billion) of assets under management, is now looking at buying office space in Tokyo, says its global head of Asia Frank Khoo.

He forecasts higher demand for commercial property in the coming months stemming from an improvement in corporate profitability in Japan.

“The weak yen is going to help the exporters and smaller manufacturers as well, this should lift confidence and translate into higher demand. With higher demand we should see vacancy coming down and rentals going up,” Khoo said. “Companies are going to use current low rental rates to move from outer Tokyo into inner Tokyo for better quality buildings [in turn pushing rentals up],” he added.

He forecasts vacancy rates will fall to 4 percent in 2014 from 8 percent currently, adding that office rents, which have largely remained flat for the past three years, will climb 1-2 percent this year and 2-4 percent next year.

Tokyo’s central business district is currently ranked the world’s fifth most expensive market to rent office space in, according to global real estate services firm Cushman and Wakefield, down from third place in 2012.

Investors have flocked into Japanese real estate investment trusts (REITs) in recent months on hopes “Abenomics” – or Prime Minister Shinzo Abe’s economic revival plan that pushes for both monetary and fiscal stimulus – would drive a recovery in the property market.

Shares of REITs including Japan Real Estate Investment and Nippon Building Fund have surged more than 50 percent year to date. “The REITs are back in the market acquiring assets,” Khoo said.

In further evidence of rising optimism over the property sector, Japan’s Nippon Prologis REIT, which owns and manages warehouses across the country, raised $1.08 billion through an initial public offering in February after pricing the stock at the top of the range.

Khoo added that with Japanese government bond yields look set to remain low, there has been a shift in attitude towards investing in property among both institutional and retail investors.

“If you look at the mom and pops, they are really hungry for yield. With 10-year Japanese government bonds below 0.6 percent, if you can get a 4 percent yield in commercial real estate, or 3.5 percent investing in a Japanese REIT, I think money will go that way,” he said.


http://www.globalpost.com/dispatch/news/regions/asia-pacific/japan/130430/property-demand-japan-tokyo-increases

Orix to Raise US$1bn in Stock Raising to Repay Debt

Orix Corp, Japan's biggest leasing firm and a major property investor, said today it plans to raise about $1bn in a public share offering to fund investments and repay debt.

Orix said it will sell 18 million new shares to Japanese and overseas investors later this month, and invest some of the proceeds into real estate, to bolster its financial solutions business and to help it expand in Asia.

The share issue, which was first reported by Reuters yesterday, will increase its total number of shares by about 20%.

Orix becomes the latest Japanese company to tap the equity market for funds, encouraged by a near 40% rally in the Japanese stock market over the past four months amid investor hopes the economy has bottomed out.

Orix has been shrinking its asset base and slashing debt as fallout from the global credit crisis sliced into its profits and hit its balance sheet. But it has also been looking to take advantage of the crisis to buy assets cheaply.

The share offering will follow a ¥150bn convertible bond sale announced in November last year.

A capital raising of ¥100bn would improve Orix's debt-to-equity ratio to about 4,1 from 4,5, Nomura Securities estimates, helping allay concerns among some investors that it has relied too heavily on debt to finance its operations.

Orix was sitting on a total of ¥7,2 trillion debt as of March.

The announcement was made after the close of trade. Shares in Orix, which fell to a low around ¥1 700 in late February, closed at ¥5 490.

http://www.bdlive.co.za/world/asia/2013/02/20/orix-to-raise-1bn-for-investments-and-repay-debt#comments

Yoshinoya Drops Gyudon Price 100Yen to Yen280

Yoshinoya Holdings Co. on Thursday cut prices for its mainstay “gyudon” beef-on-rice bowls to take advantage of eased restrictions on beef imports from the United States.

The relaxation of strict import curbs in February is allowing the stable procurement of cheaper beef suitable for gyudon, the company said.

Yoshinoya slashed beef bowl prices by ¥100 to match its two biggest rivals — Zensho Holdings Co.’s Sukiya chain and Matsuya Foods Co. — which are currently charging ¥280 for a standard bowl.

The price of a large bowl dropped by ¥40 to ¥440, while the extra large bowl fell by ¥90 to ¥540. The price cuts are expected to produce about 30 percent more customers and a 15 to 20 percent boost in sales, the firm said.

Prices for other ingredients, however, are starting to rise, thanks to Prime Minister Shinzo Abe’s “Abenomics” policies. Players in the fast-food industry say that lower gyudon prices are the key to winning market share.


www.japantimes.co.jp/news/2013/04/19/business/yoshinoya-slashes-beef-bowl-prices/

March - Bonuses Up 8.2% YOY

Bonuses and other special payments for Japanese workers increased 8.2 percent from a year earlier in March, the Health, Labor and Welfare Ministry said in a preliminary report Wednesday.

Special payments per worker stood at 15,046 yen, rising for the third straight month, the ministry said.

The rise apparently reflects an increase in the number of companies that paid extra bonuses following recent gains in stock prices, a ministry official said.

Special allowances paid by financial and insurance companies averaged 42,035 yen per worker, jumping 82.3 percent from a year before.

Workers' total wages, combining basic wages and special payments, declined 0.6 percent to 275,746 yen on average, falling for two consecutive months. The fall came as March had one more Sunday this year than last year and working hours fell as a result, the ministry official said.


http://the-japan-news.com/news/article/0000183697

March - Household spending jumps; unemployment eases

apan's household spending surged in March, while the unemployment rate eased, the Finance Ministry reported Tuesday, with both results surpassing economists' expectations. Spending by households of two or more people rose 5.2% from a year earlier, as housing expeditures jumped by more than 23%. The gain -- marking the third straight month of increase -- was well above a median estimate for a 1.8% gain, according to separate Dow Jones Newswires and Reuters surveys. The labor market also firmed, with the jobless rate for March falling to 4.1% from 4.3% in both January and February. The Dow Jones Newswires survey had projected unemployment at 4.2%, while the Reuters poll had estimated 4.3%. The relatively upbeat data sent the yen higher, with the dollar falling from ¥97.93 just ahead of the numbers to ¥97.88 in the minutes following the release. March data on industrial output and retail sales were due later in the morning.

http://articles.marketwatch.com/2013-04-29/economy/38900849_1_unemployment-rate-upbeat-data-household-spending

Golden Week - Declining Yen Leads to Surge in Foreign and Domestic Tourists

The yen’s sharp drop is transforming Japan’s reputation as a prohibitively expensive place to visit, turbocharging the country’s tourism industry long identified as a growth engine for the maturing economy.


With a dollar now fetching close to ¥100—up from less than ¥80 in November—foreign visitors have surged, while Japanese curb overseas travel and do more sightseeing at home.

The number of foreign visitors to Japan in March, the latest figure available, jumped 26.3% from a year earlier to 857,000, the highest for a March since 1964, when the Japan National Tourism Organization started taking statistics.

The weaker currency has helped Japan’s tourism sector overcome a number of setbacks in the past two years. The 2011 nuclear accident scared away visitors worried about radiation. Heightened territorial tensions with Beijing have since last year led to a sharp drop in tourists from China, once the fastest-growing source of visitors to Japan. While Chinese travelers continue to shun Japan, visitors from the rest of Asia, Europe, and Russia have more than made up for the gap.

In Ginza, Tokyo’s high-end shopping district, a group of 34 tourists from Sweden was riding a large tour bus after shopping on a recent afternoon.

“Japan is selected as the most desired holiday place by the Swedish,” said tour guide Magnus Carlsson. “It’s a hot destination, which used to be too expensive. But it’s now cheaper,” added Mr. Carlsson, who has guided about 100 Swedish tourists over the past two months, not only in Tokyo but also to Nagano and to Kanazawa of Ishikawa prefecture in northern Japan.

Hiroshi Saito, a tourism promotion official in Ishikawa, said his prefecture saw a 44.5% increase in the number of foreign visitors to its famous Kenrokuen garden for the first three months of this year compared with the same period a year earlier.

Seeing a sharp increase in the number of travelers from South Korea, the prefecture invited 22 travel agencies from the neighboring country last month to show them around tourist spots as well as golf courses.

“We’d like to take advantage of the weak yen to lure more tourists,” from South Korea, Mr. Saito said. “It’s a market that has room to grow.” He also thinks Ishikawa can now “take back” Korean tourists who were traveling by ferry in recent years to Japan’s southern island of Kyushu, when the strong yen led them to try and cut travel costs.

As for China, “as it is a big market we need to watch, but for now we’re taking a wait-and-see attitude,” Mr. Saito said.

In Tokyo’s Akihabara electronics district, a duty-free shop catering in particular to Chinese tourists remained empty on a recent afternoon. “The weak yen won’t lure them back,” a Chinese clerk said. “What matters is the political issue.”

But Akihabara was packed with visitors from other countries.

Daniel Wijono from Indonesia was waiting with his two boys for his wife and his mother to finish shopping for cosmetics outside an Akihabara drugstore, the last day of his nine-day trip to Japan. The 37-year-old employee of a manufacturing firm was holding three bags containing electronics gadgets, game character figures, and Uniqlo sweaters.

“It’s quite good. Things are cheaper more than 10% this time,” he said, comparing prices to his prior visit early last year. “One yen equals 115 [Indonesian] rupiah last time. It’s now 103,” said Mr. Wijono. “But I’m afraid that I ended up spending more than I had expected,” he grinned.

Meanwhile, the number of Japanese who plan to take an overseas trip during the so-called Golden Week holiday that started Monday is expected to be down 5% from last year, while the number of people traveling within Japan will likely set a record, according to data released last month by Japan’s leading travel agency JTB.


http://blogs.wsj.com/japanrealtime/2013/05/02/for-golden-week-tourists-flood-a-newly-affordable-japan/

U.S. says Okada's Universal is target of criminal bribery probe

Japanese billionaire Kazuo Okada and his companies are being investigated in the United States for potential violations of anti-bribery laws in relation to a $2 billion casino project in the Philippines, according to a court filing.

In a Nevada state court filing, U.S. federal prosecutors sought permission to intervene in a lawsuit brought by Wynn Resorts Ltd against Okada to prevent disrupting an ongoing criminal probe into the bribery allegations.

It was the first time U.S. authorities publicly acknowledged a criminal investigation of Okada and his companies - Japan's Universal Entertainment Corp and Nevada-based Aruze USA Inc - for possible violations of the Foreign Corrupt Practices Act, an anti-bribery statute dating to the 1970s.

The government also noted in the filing that it has been conducting a criminal investigation into Wynn's donation in 2011 to the University of Macau Development Foundation. Okada has said Wynn's board turned against him for opposing the donation.

For more than a year Okada has been locked in a legal battle with Wynn Resorts CEO Steve Wynn, during which the former business partners have exchanged allegations of illegal conduct.

Shares of Universal Entertainment, which generates the bulk of its profits from making pachinko gaming machines for the Japanese market, tumbled 15.7 percent to 1,666 yen on Wednesday - their biggest one-day drop in almost 14 months.

The U.S. Department of Justice is seeking a temporary stay on discovery in the civil proceedings to allow for the criminal case to be developed. Wynn would consent to the motion while Okada would likely oppose it, according to the filing.

"Universal is cooperating fully with all investigations," said Eric Andrus, a spokesman for the Japanese company at RLM Finsbury. Kim Sinatra, general counsel for Wynn Resorts, said the company would continue to cooperate with the government.

Reuters has reported that the Federal Bureau of Investigation was probing $40 million in payments from Universal to a close associate of the former head of the Philippine gaming authority in 2010 around the time the company was granted concessions for its Manila Bay casino.

Universal said in December it filed a defamation suit against Reuters in Tokyo for its reporting on the payments.


http://www.reuters.com/article/2013/04/10/us-casinos-universal-usa-idUSBRE93907P20130410

March - Supermarket sales register first rebound in 13 months

Japan’s supermarket sales marked the first year-on-year rise in 13 months in March on a same-store basis, backed partly by spirited closing sales, an industry body said Monday.

Total sales at 7,947 stores operated by 57 supermarket chains stood at ¥1,044.65 billion, the Japan Chain Stores Association said. Clothing sales, which accounted for 10.5 percent of overall sales, increased 7.1 percent, while food sales, which made up 61.8 percent of the total, sagged 0.3 percent, the association said.

It traced the overall sales increase to robust sales of spring clothing amid warm temperatures as well as good sales of merchandise to tackle hay fever.

Meanwhile, the Japan Franchise Association said on Monday that sales at convenience stores in Japan in March fell 0.4 percent from a year earlier to ¥700.3 billion on a same-store basis, down for the 10th straight month.

The drop partly resulted from sluggish tobacco sales, the industry group said.


http://www.japantimes.co.jp/news/2013/04/23/business/supermarket-sales-register-first-rebound-in-13-months/

Buddhist sect from Japan loses big on Aussie dollar bets

Koyasan Shingon Buddhism, the Japanese owner of a cluster of World Heritage Site temples founded in the 9th century, reported losses equal to about a quarter of its assets after bets in the Australian dollar and structured bonds soured.

The group had unregistered losses of 1.53 billion yen (US$15 million) on financial assets of 5.79 billion yen for the year ended March 31, according to an April 23 report commissioned by the organization, based in Wakayama prefecture in western Japan. The head of the organization, Kosho Shono, resigned today to take responsibility, Kyodo News reported.

Koyasan Shingon, whose flagship Kongobu-ji temple in Mount Koya is listed as a National Treasure of Japan, started investing in 2002 in an Australian dollar fund through Nomura Securities Co., using money from member temples and followers. The association later expanded its portfolio to products including Nikkei index-linked debt, according to the report.

Holding the association’s fund managers responsible for the losses “wasn’t appropriate,” because it would have been difficult to predict the 2008 collapse of Lehman Brothers Holdings Inc., according to the report.

The report was commissioned in February after the organization’s governing council asked for more transparency about its investments.

“It was a difficult period of investing that led to attempts at higher returns. Such movements were seen everywhere,” said Hiroyuki Nakai, chief strategist at Tokai Tokyo Research Center.


http://business.financialpost.com/2013/04/25/australian-dollar-buddhist-sect/

March - Consumer prices fall for 5th month in a row

Japan's key retail-price gauge deflated in March from a year earlier, even as the index rose compared to February's levels, the Finance Ministry reported Friday.

The core consumer price index, which strips out volatile fresh-food prices, was 0.5% lower than for March of last year, the fifth straight monthly drop, with the result coming in slightly worse than the 0.4% decline expected in separate Dow Jones Newswires and Reuters surveys of economists.

However, the core CPI rose 0.3% compared with the previous month. In February, Japan's core CPI fell 0.3% from the year-earlier period. The April core CPI for metropolitan Tokyo, used a leading indicator of price trends in Japan, registered a 0.3% year-on-year drop, though it too was up 0.3% from February.

On a national level, March prices for furniture, culture and recreation, and food showed the largest drops.

The yen rose slightly following the data, with the dollar USDJPY -1.2119% slipping from ¥99.38 ahead of the numbers to ¥99.33. The consumer price report preceded a policy decision due later in the day from the Bank of Japan, which hopes to meet a 2% consumer-inflation target within the coming two years.

http://www.marketwatch.com/story/japan-consumer-prices-fall-for-5th-month-in-a-row-2013-04-25

Consumer Prices Fall for Third Month as Deflation Lingers

Japan’s consumer prices fell for the eighth time in nine months, highlighting the challenges facing the Bank of Japan (8301) in reaching a 2 percent inflation target.

Consumer prices excluding fresh food fell 0.2 percent in January from a year earlier, the third-straight decline, the statistics bureau said in Tokyo today. The result matched the median estimate in a survey of 26 economists by Bloomberg News.

While a weaker yen improves the outlook for exporters and pushes up the prices of imported energy and commodities, continued price falls show the scale of the BOJ’s challenge in achieving 2 percent inflation. Prime Minister Shinzo Abe yesterday nominated Asian Development Bank President Haruhiko Kuroda to lead the BOJ, with the prospective governor saying last month that more easing is justified for 2013.


Japan’s economy will grow 1.8% this quarter according to the median estimate of economists surveyed by Bloomberg News, after contracting in April-to-December last year. Goldman Sachs Inc. in January raised its GDP forecast for the fiscal year starting in April to 2 percent.



http://www.bloomberg.com/news/2013-02-28/japan-consumer-prices-fall-for-third-month-as-deflation-lingers.html

Q4 - Economy Still Contracting

Japan's economy unexpectedly contracted in the fourth quarter, failing to escape a mild recession and playing into the hands of a government pushing for more aggressive monetary expansion that's drawn international criticism.

While a 0.1 percent drop in output defied expectations of a slight uptick after two quarters of contraction, economists expect the economy will slowly recover this year with the help of bolder monetary and fiscal stimulus and an improving global economy.

The Bank of Japan also struck a more positive note on the economy while keeping its policy on hold after it boosted its monetary stimulus and doubled its inflation target to 2 percent a month ago.

Markets, however, have no doubt that Prime Minister Shinzo Abe will keep pushing the central bank for more, given the still fragile state of the economy. A return to rising prices also appears far off after nearly two decades of low-grade deflation.

Those expectations for further easing have sent the yen into retreat, driving it down nearly 20 percent against the dollar since November and stirring an international debate over whether Japan was effectively using aggressive money printing to steer the yen lower.

Tokyo has defended its action, saying its policies are aimed at pulling the country out of deflation, not at nudging down the yen, and Governor Masaaki Shirakawa is expected to reinforce that argument when he will attend his last Group of 20 finance leaders' meeting in Moscow this weekend.

Japan has said the Group of Seven rich nations accepted Tokyo's view when it declared in a statement on Tuesday that fiscal and monetary policies would not be directed at devaluing currencies.

But remarks from former BOJ governor Kazumasa Iwata on Thursday are likely to rekindle the international debate on Tokyo's true motives.

The yen is still overvalued from a trade perspective and the reversal of the currency's strength is essential for the Bank of Japan to achieve its 2-percent inflation target, Iwata was quoted as saying by a Japanese ruling party official.

Iwata, considered one of the leading candidates to replace Shirakawa when he leaves his post in March, said the dollar at 95 yen was appropriate. Iwata heads a private economics think-tank and now has no policymaking role.

Abe and his cabinet have the right to fill three top BOJ posts when Shirakawa and his two deputies leave on March 19 and is widely expected to pick advocates of more aggressive central bank action than the cautious outgoing chief, keeping downward pressure on the yen.

The dollar traded around 93.50 yen on Thursday after hitting a 33-month high of about 94.47 yen on Monday.

South Korea's central bank warned on Thursday that Japan's expansionary monetary policy could affect that country's future growth as a weak yen could undercut Korean exporters' competitiveness.

ECONOMY BOTTOMING?

As widely expected, the central bank maintained its overnight call rate target at a range of zero to 0.1 percent by a unanimous vote, and held off expanding its asset buying and lending program, while offering a rosier view of the economy than just a month ago.

"Japan's economy appears to be bottoming out," it said. In January the BOJ said the economy was weakening.

The world's third-largest economy contracted for the third consecutive quarter in October-December, showing Japan was taking longer to escape from a mild recession. Economists had expected a very modest expansion of 0.1 percent from the previous quarter.

However, more recent sentiment surveys and leading indicators such as machinery orders point to a gradual recovery.

"The economy is still on the recovery track, and there is a stimulus package that will help from the spring. The Bank of Japan is also likely to continue monetary easing," said Shuji Tonouchi, senior fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities.

Economics Minister Akira Amari said that while the economy was still showing some weakness, it was likely to resume moderate recovery, helped by monetary easing, stimulus spending and an expected pick-up in global growth.

On an annualized basis, the economy contracted 0.4 percent, Cabinet Office data showed on Thursday. Economists had expected a 0.5 percent annualized increase.


http://www.reuters.com/article/2013/02/14/us-japan-economy-gdp-idUSBRE91D00Z20130214

April - Japanese Real Estate Prices Surge

The below chart shows the surge of Japanese real estate prices (at least for REITs) in the last month; with a 30% surge in prices since March 2013

Seems to be a combination of the weakening Yen and "Abenomics" leading to real estate prices surging

http://quote.tse.or.jp/tse/quote.cgi?F=histidx/EHistIndex&basequote=352_2013&begin=2013/1/22&end=2013/04/22&mode=D&histtype=CSV

Japan's top three automakers post record 2012 sales

Japan's three biggest automakers -- Toyota, Nissan and Honda -- on Monday posted record sales for 2012, as the results confirmed that Toyota recaptured the world's biggest automaker crown.

The rosy results underscored the trio's recovery after Japan's quake-tsunami disaster in 2011 devastated sales and production, and highlighted strong demand in the key Asian and US markets.

That helped offset weakness in debt-hit Europe and a downturn in China stemming from a diplomatic row that sparked a consumer boycott of Japanese goods in China, the world's biggest vehicle market.

On Monday, Toyota said sales last year soared 22.6 percent to 9.75 million vehicles, while Nissan saw a 5.8 percent on-year rise to 4.94 million units with record numbers in the US market.

Honda, Japan's number-three automaker, logged sales of 3.81 million vehicles, up from 3.09 million a year earlier.

The latest figures confirmed that Toyota regained the global sales title which it lost in 2011 to US-based General Motors, largely due to the natural disasters.

The crisis and flooding in Thailand -- where Japanese automakers have production plants -- during 2011 marked a "particularly harsh year", said Nomura auto analyst Masataka Kunugimoto.

"2012 is the year we saw things becoming normal again," he said.

However, Nissan, part-owned by France's Renault, warned in November that its net profit for the fiscal year through March would be down 20 percent to 320 billion yen ($3.52 billion), citing its heavy exposure to China.

Honda has blamed the territorial row with Beijing over an East China Sea island chain -- and a strong yen -- for a 20 percent cut to its annual profit forecast.

Less affected by the dispute, Toyota hiked its profit forecast to 780 billion yen for the same period, up from 760 billion yen, although it trimmed its annual sales forecast to 21.3 trillion yen and credited much of its improved earnings outlook to cost cuts.

The long-standing row flared again in September when Tokyo nationalised some of the tiny archipelago that is also claimed by Beijing, setting off huge demonstrations across China and the consumer boycott.

Japanese factories and businesses across China temporarily closed or scaled back operations over fears of being targeted by angry mobs.

Nissan's chief executive Carlos Ghosn has warned that the firm would think twice about making new investments in China, where it has several production plants with a new factory in the northeastern city of Dalian planned for 2014.

On the production side, Toyota said Monday that it made 9.90 million vehicles last year, up 26.1 percent, while Nissan posted a 5.5 percent production increase to 4.88 million units in 2012.

The automakers have been forced to recall millions of vehicles over safety and quality concerns in recent years, while being hit by the strong yen which makes their products less competitive overseas and shrinks repatriated foreign income.

The unit hit record highs around 75 against the dollar in late 2011 and remained strong through most of last year until Japan's new conservative government swept to power in December.

Its promises to pressure the Bank of Japan for aggressive easing to boost the world's third-largest economy has sent the yen into a steep dive to below the 90-level on the dollar.

"Foreign exchange remains the major factor that can change the tone of the industry," Nomura's Kunugimoto said.

"A lower yen is positive for earnings. If that continues, it would allow for more research and development spending which should then strengthen automakers' competitiveness."

Toyota shares were down 0.57 percent to 4,315 yen and Honda was off 0.58 percent at 3,400 yen while Nissan bucked a fall in the broader market on Monday by closing up 2.40 percent at 895 yen.


http://www.google.com/hostednews/afp/article/ALeqM5iEK75VICG8RN1iFZX4Gda5MIh9oQ?docId=CNG.aa9d51b6bc05023676c951da3045f307.251

Foreign visitors flock back to post-disaster Japan

The number of foreign visitors to Japan in 2012 surged 34.6 percent from the previous year as the tourism sector rebounded after the 2011 tsunami and nuclear disaster, the government said Friday.

Overseas arrivals totaled more than 8.3 million, just short of the record 8.6 million seen in 2010, the Japan National Tourism Organization said.

"The inauguration of new services by low-cost carriers and the easing of visa-issuance conditions by the Japanese government have also contributed to the increase," an official from the organisation said.

The number of visitors in 2011 plunged to 6.2 million, hit by the massive earthquake and tsunami that ravaged Japan's northeast and sparked a nuclear crisis at the Fukushima power plant in March that year.

The number of visitors from mainland China slipped by more than a third in December from a year earlier following a flare-up in a territorial row between Tokyo and Beijing, however for the full year, numbers were up 37.1 percent.

Annual arrivals from Taiwan were up 47.6 percent to a record 1.4 million.

http://www.nydailynews.com/news/world/foreign-visitors-flock-post-disaster-japan-article-1.1247547

US Treasury Freezes Assets of Top Gangsters Around the World

Earlier today, the Department of the Treasury announced sanctions against the members of three international crime syndicates in an effort to crack down on organized crime.

President Obama had previously named the Camorra, Yakuza, and Brothers’ Circle as TCOs, or transnational criminal organizations, in July 2011, and instructed the Treasury to follow up with sanctions.

The release is that it actually identifies and provides brief background information on eight gangsters from the Yakuza, Camorra, and Brothers’ Circle, as well as an overview of each syndicate.

The Treasury has frozen these gangsters’ assets and prohibited any U.S. citizen from engaging in business with them.

Read the full release from the Treasury Department below. The gangsters are listed at the bottom:

Treasury Targets Leading Figures of Transnational Criminal Organizations

WASHINGTON – The U.S. Department of the Treasury today took action against three transnational criminal organizations (TCO), the Camorra, the Yakuza, and the Brothers’ Circle. Today’s designations include four members of the Camorra, one of Europe's largest criminal organizations; the Inagawa-kai, the third-largest clan within the Japanese Yakuza criminal network; and an individual providing support to a key member of the Brothers’ Circle, a large multi-ethnic Eurasian criminal network. These designations were imposed under Treasury’s authority targeting transnational organized crime.

President Obama identified the Camorra, the Yakuza, and the Brothers’ Circle along with the Zetas, as significant TCOs in the Annex to Executive Order 13581 (Blocking Property of Transnational Criminal Organizations) on July 24, 2011, and charged the Treasury Department with pursuing additional sanctions against its members and supporters to undermine and interdict their global criminal operations.

Today’s action freezes any assets these persons may have within the jurisdiction of the United States and generally prohibits any transactions with them by U.S. persons.

“The individuals designated today are key members of criminal organizations who engage in serious crimes around the world,” said David S. Cohen, Treasury Under Secretary for Terrorism and Financial Intelligence. “Treasury will continue to target additional members and supporters of these groups, as well as other significant TCOs, as we systematically expose their criminal operations and protect the U.S. financial system from their illicit activity.

The Camorra

The Camorra operates internationally and is involved in serious criminal activity, such as money laundering, extortion, alien smuggling, robbery, blackmail, kidnapping, political corruption, and counterfeiting. In 2012 Italian law enforcement conducted multiple operations to seize Camorra assets, including 800 million euro seized from the Casalesi clan in July. To date, Treasury has identified five individuals affiliated with the Camorra under E.O. 13581, including their most prominent leaders Michele Zagaria and Antonio Iovine.

In August 2012 the Treasury Department designated Michele Zagaria, a leader of the Camorra Casalesi clan, who is serving a life sentence for conspiracy, murder, extortion, and robbery. The Camorra members designated today are all members of the immediate family of Michele Zagaria: his brothers Pasquale Zagaria, Carmine Zagaria, Antonio Zagaria, and his father Nicola Zagaria. Each of these four individuals is designated for acting for or on behalf of, or providing support to, Michele Zagaria and/or the Camorra. All the brothers have led the Caselasi clan at one point while other siblings were serving jail sentences. All are involved in the family’s criminal enterprises. This network has been involved in extortion, kidnapping, money laundering, and bribery.

The Yakuza

The Yakuza, reputedly the world’s largest criminal organization with over 70,000 members, is involved in serious criminal activities, including weapons trafficking, prostitution, human trafficking, drug trafficking, fraud, and money laundering. The Treasury Department designated the Yamaguchi-gumi and the Sumiyoshi-kai, in February and September 2012, respectively. The Inagawa-kai, designated today, is the third-largest of the Yakuza organizations, and the Department of the Treasury is targeting it today for acting for or on behalf of the Yakuza. The top three clans account for approximately 72.4 percent of the Yakuza membership. To date, Treasury has identified four individuals and two entities affiliated with the Yakuza under E.O. 13581, including their most prominent leaders Kenichi Shinoda and Shigeo Nishiguchi.

Today’s action also imposes sanctions on Jiro Kiyota, the top Inagawa-kai leader, as well as the Inagawa-kai’s second-in-command, Kazuo Uchibori, for acting for or on behalf of the Inagawa-kai. As leaders of Inagawa-kai, Kiyota and Uchibori play key roles in directing the syndicate’s policies and settling disputes with other Yakuza syndicates. Under the leadership of Kiyota and Uchibori, the Inagawa-kai has become increasingly aligned with the Yamaguchi-gumi.

The Brothers’ Circle

The Brothers’ Circle is a multi-ethnic criminal group composed of leaders and senior members of several Eurasian criminal groups largely based in countries of the former Soviet Union but extending to Europe, the Middle East, Africa, and Latin America. To date, Treasury has identified 15 individuals affiliated with the Brothers’ Circle and their associates under E.O. 13581, including their most prominent members Gafur Rakhimov and Zakhariy Kalashov. The Brothers’ Circle serves as a coordinating body for several national level criminal networks, mediating disputes between the individual criminal networks and directing global criminal activity.

On December 20, 2012, the Treasury Department designated Zakhariy Kalashov, a key member of the Brothers’ Circle and a prominent Eurasian organized crime figure with extensive connections to criminal groups in Russia and countries throughout Eurasia. His criminal activities include money laundering, extortion, criminal protection, and drug trafficking. He is currently incarcerated, serving a nine year sentence for money laundering in Spain. Marina Kalashova, who has been designated today, is a key part of Zakhariy Kalashov’s network. Kalashov communicates with Kalashova to pass messages on his behalf to his organization.

Identifying Information:
Name: Zagaria, Carmine
DOB: 27 May 1968
POB: San Cipriano D’Aversa, Italy

Name: Zagaria, Antonio
DOB: 29 June 1962
POB: San Cipriano D’Aversa, Italy

Name: Zagaria, Pasquale
DOB: 5 January 1960
POB: San Cipriano D’Aversa, Italy

Name: Zagaria, Nicola
DOB: 10 October 1927
POB: San Cipriano D’Aversa, Italy

Entity: Inagawa-kai
Address: 7-8-4 Roppongi, Minato-ku, Tokyo, Japan          
Name: Kiyota, Jiro

AKA: Sin, Byon-Gyu
DOB: 1940              
POB: Japan

Name: Uchibori, Kazuo
AKA: Uchibori, Kazuya
DOB: 1952  
POB: Kawasaki, Kanagawa Prefecture, Japan

Name: Goldberg, Marina Samuilovna
AKA: Kalashov, Marina
AKA: Kalashova, Marina
Address: Burj Khalifa, Dubai, United Arab Emirates
DOB: 15 September 1979
ID: Passport 514763020 (Russia)

http://www.businessinsider.com/treasury-identifies-eight-gangsters-2013-1#ixzz2Ix0G6dSq

Yakuza arrested in Nagoya for Threatening Police

Aichi prefectural police on Saturday arrested the manager of a chain of Nagoya sex clubs and two others for threatening an investigator of the Kodo-kai organized crime group, reports the Sankei Shimbun (Jan. 5).

Between July and August of 2010, the president of the Blue chain of sex clubs, Yoshinori Sato, 55, former employee Osamu Yamaguchi, 37, and investigative company president Koji Aoki, 42, are alleged to have participated in making threatening phone calls to the home of the investigator on five occasions.

The threats included violence and a mention of the name of the officer’s second daughter. “Your daughter is cute,” the caller reportedly said. “I don’t know what is going to happen to her.”

Sato and his former co-worker have denied the allegations, while the third has admitted involvement.

According to the Nikkei Shimbun (Jan. 5), the officer was investigating whether the Kodo-kai, an affiliate of the Yamaguchi-gumi, was utilizing the Blue group as a source of funds.

Sato was previously arrested in 2011 for assisting in concealing the identity of the number-two boss of the Kodo-kai during a round of golf. Sato received a prison term of two years and six months, which was suspended for four years.

On Sunday, according to the Sankei Shimbun (Jan. 6), prefectural police raided the offices of an affiliate company of the Blue group in Nagoya’s Higashi Ward.


http://www.tokyoreporter.com/2013/01/05/former-sex-club-manager-busted-for-threatening-aichi-organized-crime-cop/

Ex-Aichi ShoGin chairman Kiriichi Gonda arrested over illegal Yoshiwara soaplands

The peace preservation division of the Tokyo Metropolitan police on Friday announced the arrest of a former chairman of the credit association Aichi Shogin for receiving funds from illegally operating soapland brothels in the Yoshiwara pleasure quarter, reports the Asahi Shimbun (Jan. 11).

Kiriichi Gonda, a 76-year-old of Korean ancestry, his daughter, Kyoko Noguchi, 54, and one other suspect were arrested for receiving 21.84 million yen over a three-month period starting in August last year from eight bathhouses busted for offering prostitution services in violation of the law. The three suspects are charged with receiving illegally obtained funds.

Gonda has reportedly admitted to the allegations.

Gonda established a company in the name of his wife and Noguchi through a one billion yen loan obtained from Aichi Shogin. The firm then purchased the illegally operating soaplands in 2005. The money allegedly obtained by the suspects was said to be “rent” payments.

According to TBS News, officers are investigating another 500 million yen in funds believed to have been accrued since 2009.

Until September of last year, Gonda, whose Korean name is Kwon Dong-hyun, was the chairman of Aichi Shogin and president of another credit association for Koreans living in Japan.


http://www.tokyoreporter.com/2013/01/14/ex-aichi-credit-board-chairman-busted-over-illegally-operated-yoshiwara-soapland/

Pachinko Tycoon Kazuo Okada's Casino Project in lawsuits

Japanese billionaire Kazuo Okada was facing a crisis: Work on his dream casino by the bay in Manila was going nowhere.

Instead of a world-class resort packed with Chinese high-rollers, Mr. Okada, 70, was sitting on a $300-million patchwork of reclaimed and undeveloped land next to the Manila airport that by the middle of 2009 was threatening to become a money pit, according to company records and people involved.

Crucial regulatory approvals were tied up in red tape. The provisional gaming licence was flawed. No one could tell the architect how high he could build the gold-toned towers without endangering incoming aircraft.

To realize Mr. Okada’s goal of making the Manila casino more profitable than rival operations in Macau or Las Vegas, the project needed to win an exemption from corporate taxes in the Philippines. It also needed a presidential order giving Mr. Okada’s company, Universal Entertainment Corp., the ability to own the resort outright as a foreign investor.

Universal executives believed Philippine officials had promised those concessions by the end of 2008 for a project expected to create more than 6,000 jobs. The Philippine gaming authority had given Mr. Okada a side letter to Universal’s provisional licence in August 2008 saying it would make its “best effort” to get those approvals from then-Philippines President Gloria Arroyo.

It would mean hundreds of millions of dollars in additional profit each year if the approvals came through, according to an analysis of Universal’s presentations to regulators and investors.

By June 2009, however, the project was more than six months behind schedule and Mr. Okada’s patience was wearing thin. When Ms. Arroyo came to visit Tokyo, Mr. Okada saw her in a meeting arranged by the head of Philippine gaming regulator, Efraim Genuino.

“Get clarity on how long it will take to solve these problems on the spot and extract a promise,” a note prepared for Mr. Okada in Japanese by Universal executives said.

Reuters examined hundreds of pages of documents from Universal and Philippine regulators and interviewed nearly two dozen people involved in the project in Japan and the Philippines in reconstructing how Universal tried to push through its casino deal in the Philippines in the final months of the Arroyo administration. That deal is now the subject of investigations there and in the United States.

The record shows Universal won concessions on three critical issues that had threatened the $2-billion project in late 2009 and early 2010.

First, the Philippine Amusement and Gaming Corporation (PAGCOR), the gaming regulator under Mr. Genuino, brokered a land swap in November 2009 that Universal needed to move ahead with construction.

Then in February 2010, Ms. Arroyo signed a presidential order making it possible for foreign investors such as Mr. Okada to have 100-per-cent ownership of casinos. Around the same time, Ms. Arroyo’s office approved an application for corporate tax relief from Universal’s land-holding company. Both measures were expected but the delays had frustrated Universal executives, records show.

Universal pushed hard to get its final gaming licence from Mr. Genuino – right up until June 29, 2010, a day before he left his post – but failed to get it.

As it raced to win final approval for its casino, Universal also funnelled a total of $40-million in payments to Rodolfo Soriano, an aide to Mr. Genuino and a former consultant to PAGCOR who had become central to Universal’s operations in the Philippines by late 2009.

Of the total $40-million in transfers to Mr. Soriano, $10-million was immediately returned to the Japanese company in May 2010 to avoid writing off a bad loan extended to another company not involved in the casino project, as Universal closed the books on its fiscal year, records show.

The payments to Mr. Soriano, now under investigation as potential bribery, were first reported by Reuters.

It is unclear what happened with the $30-million paid to Mr. Soriano that remained with him. Mr. Soriano, who came to be known to Universal executives by his nickname “Boysie,” has not commented on the payments and could not be reached. There is no evidence the money was transferred to officials in the Ms. Arroyo administration or to others.

Universal booked $7-million of the payments to Mr. Soriano as a “consulting fee,” citing his help in winning the order signed by Ms. Arroyo allowing foreign casino ownership as partial justification for the payment, according to company documents seen by Reuters.

Mr. Okada broke ground on construction of the casino in January 2012, but PAGCOR under its new chairman has threatened to strip Universal of its licence if evidence of bribery is found.

Universal said it conducted its business in the Philippines lawfully. Its lawyer, Yuki Arai, declined to comment further.

Mr. Genuino has been charged with misuse of public funds during his time at PAGCOR for allegations unrelated to the Universal payments to Mr. Soriano. He could not be reached for comment.

Ms. Arroyo has been under hospital arrest for charges related to alleged electoral fraud and misuse of public funds during her presidency. Her spokeswoman, Elena Bautista-Horn, did not return calls seeking comment.

Universal has sued three former employees claiming that $15-million transferred to Mr. Soriano – including the $10-million that was immediately returned – was unauthorized.

In early December, Mr. Okada and Universal announced they had filed a libel action against Reuters in Tokyo for reporting on the payments to Mr. Soriano in November.

Mr. Okada, one of Japan’s most successful entrepreneurs, had risen through hardship and trusted his gut when it came to the biggest decisions.

His father died when he was in elementary school, a loss he said helped make him self-reliant. He made his first fortune fixing and selling American jukeboxes in the 1960s. He became a billionaire selling pachinko machines, a Japanese form of legal gambling.

By the late 1990s, the pachinko market had peaked and Universal began to look for ways to diversify.

Mr. Okada met casino impresario Steve Wynn in 2000. The two had to rely on a translator – Mr. Okada speaks little English – but both said they began a strong friendship. On a handshake, Mr. Okada became Mr. Wynn’s major investor.

“I got lucky,” Mr. Wynn, 70, told Nevada gaming regulators in 2004. “At first I could hardly believe it, but then $250-million came ‘zwinging’ in.”

Mr. Okada staked Mr. Wynn for a total of $380-million. That jump-started construction of the Wynn Las Vegas resort that opened on the site of the old Desert Inn in 2005, and the even more profitable Wynn Macau in 2006. By 2010, Mr. Okada’s investment had increased in value almost eight times and returned just over $600-million in dividends.

Macau in particular has produced stunning results. By 2011, the Macau market was bringing in almost $34-billion a year, making it more than five times larger than Las Vegas.

When Mr. Genuino visited Tokyo in 2007 to drum up interest in a $15-billion resort and casino complex PAGCOR wanted to develop, Mr. Okada jumped at the chance to invest, people involved said.

A year later, on the cusp of global recession, Universal paid just over $300-million for 30 hectares on Manila Bay. In August 2008, PAGCOR granted a provisional licence to its casino operating company, Tiger Resorts, Leisure and Entertainment.

But Mr. Okada later realized the initial licence fell short of what the company had sought, records show. Universal did not want to have to hire employees, including dealers, through PAGCOR and pay fees to the regulator as a placement service, according to letters sent from Universal to PAGCOR.

Universal also pressed PAGCOR to allow high-rollers coming on trips organized by junket operators to come into the casino without reporting their names to the regulator. Junket operators combine concierge and credit services for rich Chinese and have been central to the growth of gambling in Macau.

By early 2012, Mr. Wynn and Mr. Okada had split and begun a legal fight over Mr. Okada’s continued investment in Mr. Wynn’s company that is playing out in courthouses in the United States, Japan and the Philippines.

A Wynn investigation found Universal had paid $110,000 to entertain gaming regulators from Korea and the Philippines. The Wynn camp alleges that showed Mr. Okada was an unfit partner. Mr. Okada has said Universal entertains officials in line with its internal policy and denies any wrongdoing. The guest list included Mr. Soriano, Mr. Genuino and Mike Arroyo, the husband of then-President Gloria Arroyo.

Mr. Wynn told Okada and other directors in 2011 that he did not think it would be possible to operate in the Philippines, consistently ranked as one of the most corrupt economies in Asia, according to a legal claim filed by Universal in Nevada.

“All of us are of one mind,” Mr. Wynn told Reuters. “We cannot be related to activities in the Philippines.”

When Mr. Okada and the Universal board approved the Manila project in August 2008, they projected it would be a cornerstone of a string of resorts around the rapidly growing Asian market. They expected Universal would become a $9-billion company by 2014 with a listing on the Hong Kong stock exchange, according to notes from the board meeting.

Casino gambling revenues in the Asia-Pacific region have more than tripled since 2007, according to PricewaterhouseCoopers. The region is set to overtake the U.S. market as largest in the world next year when gambling revenues reach $67-billion from $58-billion in 2012.

Universal’s first designs were based on the Wynn casinos, featuring two wings in reflective gold glass. Plans included $150-million to build one of Asia’s largest aquariums and a “Kidzania” playland, with another $70-million for the “Manila Eye,” a massive Ferris Wheel.

But Mr. Okada’s plans for a “six-star” resort were immediately tested by a litany of problems. Engineers discovered 10 hectares of its site was reserved for road use and held by another developer, making building impossible.

After months of delays, Universal called in Mr. Genuino to negotiate a land swap between Universal, the local city of Paranaque and developer Asiaworld Properties Philippine Corporation.

Around that time, Universal also rebuilt its legal strategy around Mr. Soriano in what was described in an internal memo as a “shift to Boysie.”

That meant reworking a structure that allowed it to circumvent the requirement that the landholding company behind the casino be at least 60-per-cent owned by Filipinos.

Records reviewed by Reuters show Universal had bankrolled the original investment meant to satisfy that foreign ownership requirement. This was done by depositing $4.4-million in a Banco De Oro account in 2008. That money secured a loan to a firm called Lex Development Corp., a shell company established by SyCip. Lex used the money to make its investment in the project. Universal covered interest on the loan, records show.

The holding was transferred in 2009 to Platinum Gaming and Entertainment, a Soriano-affiliated firm, records show.

Mr. Okada remained in charge of key decisions involving Universal and the Manila project, current and former employees said. A transition began that put greater focus on a quicker return from a downsized project. Plans for the Ferris Wheel and other attractions that had promised to turn the casino into a tourist magnet were dropped or scaled back, people involved said.

The $40-million in payments from Universal began moving to Mr. Soriano on Jan. 14, 2010 with an initial instalment of $10-million transferred to the bank account of Subic Leisure and Management, a Soriano-controlled company registered in the British Virgin Islands. Another $15-million was transferred to Subic Leisure on March 3, 2010, internal records show.

Then in late April and early May 2010 Universal recycled another $10-million payment through the same Subic Leisure route.

The final $5-million was paid to a Hong Kong shell company of which Mr. Soriano was the sole shareholder.

Universal has filed two lawsuits against three former employees claiming the final $5-million and the $10-million that came back to Universal were not authorized. In rebuttals to the Universal lawsuits, two former executives said they had been following orders in making the payments.

At the end of June 2010, Mr. Genuino stepped down after a controversy erupted over his “midnight” reappointment by Ms. Arroyo. The election of President Benigno Aquino the month before posed potential complications for Universal.

Mr. Okada went to Manila to meet the new PAGCOR chief, Christino Naguiat, in August 2010. A month later, he hosted Mr. Naguiat at the Wynn Macau casino and covered $50,523 of expenses during a four-day stay. Mr. Naguiat has said there was nothing inappropriate about his stay.

Mr. Okada’s ambition to build casinos around Asia hinges in part on how the investigation of the Manila payments is resolved. The payments to Mr. Soriano are the subject of a Philippine Department of Justice investigation and two separate congressional hearings in the Philippines.

The Nevada Gaming Control Board said last month its investigation was progressing. Possible sanctions include a suspension of Universal’s gaming licence.

Earlier this month, Universal signed a deal giving Philippine property firm Robinsons Land Corp. a minority stake in its casino operating company and a majority stake in its Manila landholding company.

The Manila project – now known as Manila Bay Resorts after initially being dubbed “Okada Resort Manila Bay” – is scheduled to open in 2014, four years behind initial projections.





http://www.theglobeandmail.com/report-on-business/international-business/asian-pacific-business/japanese-tycoons-dream-casino-mired-in-lawsuits-and-bribery-probe/article6960202/

Japanese Execs Confident on Economy in 2013

Sixty percent of leaders from the nation's top 30 corporations believe the economy will moderately recover in the first half of this year, while nearly 70 percent think the economy is in a mild decline, according to a Yomiuri Shimbun survey for the New Year.


All survey respondents said the economy was either in a mild decline or at a standstill. Twenty respondents said the economy was "moderately declining," while nine said it was "in a temporary lull."

When asked the cause of the current economic situation, 21 selected "the worsening economy of China and other newly emerging nations" while 18 picked "the continuing European fiscal and financial crises" from a multiple-choice list.

But many of the 30 leaders predicted a recovery.

Eighteen respondents said they expected the economy to show a "moderate recovery" while nine said they expected it to "remain at a standstill" and three said they expected it to show a "moderate aggravation."

In their predictions of price-adjusted real economic growth for 2013, 12 respondents chose "from 1 percent to less than 1.5 percent" and 10 respondents selected "from 0.5 percent to less than 1 percent." None of the 30 expected negative growth.



http://www.yomiuri.co.jp/dy/business/T130103003610.htm

Toyota see sales down 20% in 2013

Toyota Motor Corp expects Japan vehicle sales to fall by a fifth next year, in part due to the end of government tax incentives for fuel-efficient automobiles, domestic media reported, adding to the pain from a decline in China sales.

Japanese vehicle sales account for 30 percent of Toyota's total sales volumes, and industry data shows that since the end of government tax incentives for purchases of fuel-efficient cars in mid-September, domestic new vehicle sales have fallen each of the past three months.

Toyota has decided to set its 2013 domestic sales target for Toyota-brand cars at 1.36 million vehicles, down from its 1.67 million target for this year, the Mid-Japan Economist, a regional newspaper, said on its website without citing sources.

It noted that a backlog of orders following supply-chain disruptions from last year's earthquake and tsunami had inflated sales this year.

A Toyota spokesman said nothing has been decided about its 2013 domestic sales target.

Last month, Toyota cut its group-wide global 2012 sales forecast, which includes Daihatsu Motor Co Ltd (7262.T) and Hino Motors Ltd (7205.T), to 9.66 million vehicles from a previous outlook of 9.76 million vehicles, following declines in China sales on a bilateral territorial dispute over islands in the East China Sea.

This week, it said sales in China, the world's biggest auto market, fell 22 percent in November from a year earlier which follows drops of 44 percent in October and nearly 50 percent in September.


http://www.reuters.com/article/2012/12/07/us-toyota-sales-japan-idUSBRE8B604P20121207

Top Income to rise from 40% to 45% and Inheritance Tax up from 50% to 55%

 The Liberal Democratic Party and New Komeito are near agreement on raising the maximum income tax rate to 45 percent from 40 percent, as well as increasing the top inheritance tax rate to 55 percent from 50 percent, according to party sources.

The parties have entered the final stage of discussions on the issues.

The maximum rates for income and inheritance taxes are expected to increase as early as 2015.

Currently, the top income tax rate of 40 percent is applied to people who earn more than 18 million yen in taxable income.

The two parties have been discussing whether the envisaged 45 percent rate should be applied to earners with taxable incomes higher than 30 million yen, or higher than 50 million yen, according to the sources.

The maximum inheritance rate of 50 percent is currently applied to taxable assets worth more than 300 million yen.

The LDP and Komeito have been working out a detailed proposal by taking into account the one proposed by the DPJ-led government that would see a top inheritance tax of 55 percent for taxable assets worth more than 600 million yen, the sources said.

The two parties also have been discussing increasing the number of people subject to an inheritance tax by reducing tax deductions allowed for inherited assets, the sources added.

The envisaged lighter gift tax rates would apply to assets given by people before their death to their direct descendants.

Currently, a tax rate of 40 percent is applied to taxable gifts worth between 6 million yen and 10 million yen. A 50 percent rate applies to gifts worth more than 10 million yen, regardless of the recipient.

The tax system revisions for next fiscal year are expected to include lower gift tax rates, with 30 percent eyed for taxable assets worth between 6 million yen and 10 million yen, and 40 percent for those between 10 million yen and 15 million yen, the sources said.


http://www.yomiuri.co.jp/dy/national/T130113003311.htm

BOJ says Japanese Property Prices Have Fallen too far

Bank of Japan (8301) Deputy Governor Kiyohiko Nishimura said property prices in Japan may have fallen too much in the aftermath of a real estate bubble that collapsed in the 1990s.

“In the case of Japan, property prices are too low compared to fundamentals,” Nishimura said in response to a question from the audience after delivering a paper in San Diego yesterday. Demographic changes in the country may have created too much pessimism in the housing market, he said.


http://www.bloomberg.com/news/2013-01-04/boj-nishimura-says-japan-property-prices-may-have-fallen-too-far.html

November - Unemployment Rate down to 4.1%; consumer price down 0.1%

JAPAN'S jobless rate stood at 4.1 per cent in November, down from 4.2 per cent the previous month, the internal affairs ministry says.

A separate report from the ministry showed November consumer prices in Japan slipped 0.1 per cent from a year earlier.


http://www.news.com.au/business/breaking-news/japans-jobless-rate-down-to-41-data/story-e6frfkur-1226544529205