Japan's Expects 1.4% GDP Growth in 2014

http://economictimes.indiatimes.com/news/international/business/japan-expects-economic-growth-at-1-4-per-cent-for-next-fiscal/articleshow/29304663.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Asian Association for Investors in Non-Listed Real Estate Vehicles (ANREV) Reports Japan Office is favourite country/sector for foreign investors

The seventh edition of the Investment Intentions Asia Pacific Survey is marked by a sharply higher number of respondents, with investors now representing more than half of the total respondents. This year, allocations to non-listed property funds will continue to increase. Investors show a slight preference for value added funds, and clear interest in multi country/sector funds suggesting an appetite for increased risk. Japan office is the favourite country/sector combination for investors to invest.

ANREV 2014 Report

TEPCO returns to profits on 8.5% higher electricity charges

TEPCO operator of the wrecked Fukushima Dai-Ichi nuclear power station, returned to profit in the first nine months of its fiscal year after raising customers’ electricity rates and cutting costs.

Operating profit was 231.3 billion yen ($2.25 billion) in the nine months ended Dec. 31, compared with an operating loss of 114.5 billion yen a year earlier, according to a statement today from the company known as Tepco.

The return to profit was led by increased revenues after the utility, which serves 29 million customers in the Tokyo metropolitan area, raised electricity rates for households by 8.5 percent in September 2012. The increase boosted electricity sales by 9.9 percent to 4.3 trillion yen.

Net income was 772.9 billion yen after a government injection into the utility’s fund for payouts to people and companies affected by the Fukushima disaster in March 2011.

Tepco’s operating profit target for the year ending March is 134 billion yen, compared with an operating loss of 222 billion yen the previous year.

Tepco cut staff and deferred repair work to keep expenses from ballooning, despite increased fossil fuel purchases to make up for lost nuclear capacity amid a depreciating Japanese currency, the utility said. Ordinary expenses rose 1.9 percent to 4.67 trillion yen, compared with a 12.3 percent increase the previous year.

The company expects to pay a record 2.9 trillion yen for fuel in the current fiscal year, during which all of its nuclear reactors were offline for safety checks after the Fukushima disaster, up from 2.7 trillion yen a year ago, Managing Executive Officer Katsuyuki Sumiyoshi said today at a press conference.

Bloomberg

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


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