Tuesday, October 26, 2010

Orix Buys into Hedge Fund Manager

. 19 (Bloomberg) -- Mariner Investment Group, a $12 billion hedge-fund manager, plans to sell a “significant” stake of the holding company to a unit of Japan’s Orix Corp. to help it expand its asset-management business.

The deal will have no impact on Mariner’s investment process and all after-tax proceeds from the sale will be reinvested by the partners in Mariner’s business and its funds, according to a letter the Harrison, New York-based firm sent to investors today.

“This is a unique opportunity to partner with a global financial institution whose experience and footprint, particularly in Asia, will boost our efforts to recruit additional investment talent to our growing investment business,” William Michaelcheck, founder and chief investment officer of Mariner, wrote in the letter.

The purchase was reported earlier today by Nikkei English News, which said Orix will buy the Mariner stake for about 15 billion yen ($184 million).

Mariner will keep its nine-member management committee and add two non-voting, observing members from Orix, said a person briefed on the plans who asked not to be named because the information is private.



http://www.businessweek.com/news/2010-10-19/hedge-fund-manager-mariner-to-sell-stake-to-japan-s-orix.html

Monday, October 25, 2010

Yakuza and Politicians - Sengoku Sues Shukan Shincho

Chief Cabinet Secretary Yoshito Sengoku has filed a libel suit against Shinchosha Publishing Co. over a recent article that implied he has had ties to the underworld.

he suit filed Monday with the Tokyo District Court seeks ¥10 million in damages and the publication of an apology over the article carried in the weekly magazine Shukan Shincho.

According to the suit, the edition issued last Thursday carried a feature article saying the top government spokesman was connected with the "black human network," a reference to the shadowy criminal underworld.

The suit says the article has seriously stained Sengoku's reputation by giving readers a mistaken perception of him. It also says the article could mar his political stance and exert immeasurable effects on him.

Sengoku also issued a comment calling on the publisher not to repeat the mistake in a sequel article planned to be carried in the next issue.

The magazine said the article reported facts on the basis of accurate research and will continue carrying articles on Sengoku in the next and subsequent issues.

http://search.japantimes.co.jp/cgi-bin/nn20101027b2.html

Sunday, October 24, 2010

Young Japanese Men

TOKYO - Something is happening to Japan's young men. Compared with the generation that came before, they are less optimistic, less ambitious and less willing to take risks. They are less likely to own a car, want a car, or drive fast if they get a car. They are less likely to pursue sex on the first date - or the third. They are, in general, less likely to spend money. They are more likely to spend money on cosmetics.

Japan's young men mystify their girlfriends and their bosses. They confound the advertisers who aim products at them. They've been scrutinized and categorized by social commentators, marketing consultants and the government. And they unnerve just about everybody who makes long-term projections about Japan's flagging birthrate and fading economy. Japan will grow or falter, economists and sociologists say, upon the shoulders of these mild, frugal, sweet-mannered men.

To hear the analysts who study them tell it, Japanese men ages 20 to 34 are staging the most curious of rebellions, rejecting the 70-hour workweeks and purchase-for-status ethos that typified the 1980s economic boom. As the latest class of college graduates struggles to find jobs, a growing number of experts are detecting a problem even broader than unemployment: They see a generation of men who don't know what they want.

Japan earned its fortune a generation ago through the power of office warriors, the so-called salarymen who devoted their careers to one company. They wore dark suits; they joined for rowdy after-hours booze fests with co-workers; they often saw little of their families. These are the fathers of Japan's young men.

But among business leaders and officials, there is a growing understanding that the earlier work-for-fulfillment pattern has broken down. The economy's roar turned into a yawn. Concern about Japan's future replaced giddy national pride. As a result, this generation has lost "the willingness to sacrifice for the company," said Jeff Kingston, author of the recently published book "Contemporary Japan."

Kingston added: "And now as Japan begins to unravel in a sense, young people realize that the previous paradigm doesn't work. But they aren't sure what comes next. They've seen what amounts to a betrayal in Japan."

Striving for balance

And so, instead of fantasizing about riches, Japan's young men now fantasize about balanced lives and time for their families and quaint hobbies. As they do, Japanese women are catching up. This month, the government said single women younger than 30 were, for the first time, earning more on average than their male counterparts.

Yuizo Matsumoto, 24, learned about the differences between old and young values when he worked for a small food development company. Matsumoto studied the way trace ingredients and artificial flavorings change a product's taste. He developed salad dressings and fruit juices. He liked his job, with one major complaint: He worked 14 hours a day, often on Saturdays as well. He worked so hard, he didn't have time to job-hunt for alternatives. So in July, with the support of his parents, he told his boss he was quitting.

"My boss said to me, 'If you quit this wonderful company you'll never succeed in life,' " Matsumoto said. "I think the concept itself of quitting is alien to them. I think it's very normal for somebody from the older generation to stick with something whether he's happy or not."

Many in Japan's older generation deride the young for listlessness, even a lack of what is thought of as traditionally male behavior. Playing to that characterization, some media accounts of the transformation note the extremes of behavior: how one in four engaged men now opts for a pre-wedding spa treatment; how young men host dessert-tasting clubs; how, given a hypothetical $1,000 to spend and a list of possible purchases, a lot of young men would choose a high-end rice cooker.

Similar to metrosexuals

But Japan's modern man, separated from the statistics, cuts an endearing profile. Pop culture writer Maki Fukasawa first wrote about the changing male gender identity in 2006, coining a shorthand term for the new man ("a herbivore" - gentle and cautious). Now Fukasawa, who has surveyed young Japanese men about their purchasing preferences, defends the herbivores' nobility. "The people of the older generation would buy things, consume things, even fall in love for status," Fukasawa said. "However, these young people have no desire for status. . . . Maybe we're searching for new values. This is a more sustainable model."

This isn't about sexual orientation. According to a 2009 survey from market research firm M1 F1 Soken, almost half of Japanese men ages 20 to 34 identify themselves as herbivores. No matter their sexual preferences, herbivores tend to be less overtly sexual. Many say they do not prioritize physical relationships. They're more likely to buy gifts for their mothers than for their significant others.

apan's herbivores bear some resemblance to the metrosexuals familiar in America. Like metrosexuals, they pay a lot of attention to how they look and how they dress - with a preference for flannel-patterned shirts, bought first-hand but made to look second-hand, and tight-fitting pants. But herbivores reflect a wider societal movement.

And, as it turns out, even those who identify themselves as more traditional men, rather than herbivores, are a lot different from their fathers.

Like Shinsuke Kanemura, 25, a jockish graduate from the elite Kyoto University, who met his friend for a 4 p.m. ice cream before beginning his night shift. And Akira Tanaka, 26, a "carnivore" who ridicules the herbivorous desire to "blend into the atmosphere."

"I was brought up in a family where, if you're a man, you ought to act like a man," Tanaka said. He works as a hairstylist.

Those who have rejected the old model, though, haven't yet discovered a new model - a way to earn a comfortable living without losing a quality life. Much as they loathe the office place's stifling social obligations, Japan's young men - according to the latest government statistics - prefer lifelong employment to any alternative, mostly because they value a safe option over a risky one. Japan's dim economic climate, experts say, has spawned a generation of unsentimental job-seekers who see only a spectrum of flawed options.

Little income

This demographic has remained elusive for automakers, brewers and other manufacturers. According to Tokyo's Metropolitan Police, between 1998 and 2007, the number of driver's licenses in Japan increased by 1 million. But the number dropped by 30,000 for people age 20 and by 40,000 for people age 25. People in their 20s, according to government statistics, consume less than half the alcohol of twenty-somethings in 1980.

Yoshio Kanda, 28, a wedding photographer from Osaka, says he feels "awkward" when talking to people from the bubble generation. He describes a sense of opposite values. He notices this most, he says, "when we go out drinking."

"People of an older generation, whatever they say or do, it's to the max," Kanda said. "Our generation, we don't spend money to the max and we don't drink to the max. We feel the need to save. At the same time, it's not cool to be throwing up on the street after you've been drinking."

More than the earlier generation, Japan's young men, according to marketing consultants, value close friendships and memorable experiences. One recent beer commercial depicts a hiking trip. Another shows a bunch of pals, hanging out at somebody's home.

But there's another factor, too: Japan's young men have little money to spend. Only 3.5 percent of men ages 25 to 34 make more than the average workers' household income of about 6 million yen (or $73,600) per year, according to National Tax Agency.

Matsumoto, the former food developer, has only his unemployment stipend, which expires in three months. He hopes to find a new job before then. So far, he's interviewed for one position and applied for five more.

He admits there's a chance his next job could also require 14-hour workdays. He wouldn't want to ask direct questions about time off during an interview.

Matsumoto shrugged.

"I never thought my job was the priority - that it was everything in my life," he said. "I want my private life to feel enriched as well. . . . I feel that the system itself is built for the older generation, but the young people just go into it because they have no other choice."

http://www.washingtonpost.com/wp-dyn/content/article/2010/10/24/AR2010102403342.html

October 25 - Yen Strengthens to Annual Historical Highs

The yen appreciated to as high as 81.06 per dollar today in Tokyo, compared with 81.31 when stock trading began. A stronger yen cuts overseas income at Japanese companies when converted into their home currency.

The yen is headed for its strongest annual average level against the dollar since currencies began trading freely in 1971, according to data compiled by Bloomberg and based on each day’s closing price.

The Group of 20 agreed to “move towards more market- determined exchange-rates systems that reflect underlying economic fundamentals and refrain from competitive devaluation of currencies,” its finance ministers and central bankers said after talks on Oct. 23 in Gyeongju, South Korea.

The Bank of Japan will probably leave policy unchanged this week to gauge whether cutting interest rates to near zero and pledging to buy financial assets will shield the economy from the yen’s advance to a 15-year high.

http://www.bloomberg.com/news/2010-10-25/japanese-stocks-rise-on-outlook-for-corporate-earnings-softbank-advances.html

September - Exports - Slowest Growth this year

Japan's exports grew at their slowest pace this year in September, hit by cooling foreign demand and a strong yen.
Exports climbed 14.4 percent from a year earlier to 5.8 trillion yen ($72 billion), the Ministry of Finance said Monday. Imports rose 9.9 percent to 5.04 trillion yen.

The September figure underlined weakening global demand for Japanese goods. Earlier in the year, Japan's exports enjoyed stellar 50 to 60 percent growth as they bounced back from the previous year's slump amid robust growth in Asia.

Waning foreign demand poses a major risk to Japan's export-led economy. Exports alone account for around 15 percent of Japan's economic growth.

"The latest data showed falling global demand. Growth in Japanese exports is very likely to slow in the coming months because the global economy has yet to recover," said Hideki Matsumura, senior economist at Japan Research Institute, a think tank.

Apart from weak demand abroad, the government said a rising yen was also hurting Japanese exports.

A strong yen cuts the value of repatriated profits for Japanese exporters like Toyota Motor Corp. and Sony Corp., and makes their products less competitive abroad. The ministry said the yen in September strengthened about 9 percent against the dollar from the same period last year.

The ministry said the dollar averaged 84.66 yen in September. It is now trading at the 81 yen level, nearing a post World War II record low of 79.75 yen set in 1995.

"The rising yen will continue to squeeze Japanese exports and pressure earnings of Japanese exporters," Matsumura said.

Exports to China, Japan's biggest trading partner, increased 10.3 percent in September from a year earlier, the ministry said. While Japanese exports to China rose for the 11th straight month, the September result marked the lowest growth since November 2009 when exports rose 7.8 percent.

Japan's exports to Asia increased 14.3 percent—the weakest growth in 2010.

U.S.-bound shipments grew 10.4 percent, while those to the European Union rose 11.2 percent in the month.


http://www.breitbart.com/article.php?id=D9J2EKF80&show_article=1

June - Cushman Wakefield See Property Prices at bottom

Japan, supported by acquisitions by real estate investment trusts, accounted for 40 percent of total investment volumes of direct commercial property transactions in the Asia-Pacific region in the first quarter, according to Chicago-based broker Jones Lang LaSalle Inc.

June 29 (Bloomberg) -- -- Cushman & Wakefield, the world’s largest privately held real estate services firm, said it will focus on adding assets in Japan as property prices near bottom.

Cushman & Wakefield’s assets under management in the nation rose 10 percent to 220 billion yen ($2.5 billion) as of June from November, said Yoshiyuki Tanaka, president of Cushman & Wakefield’s Japanese asset management unit. The company bought 50 billion yen of office and residential buildings in Tokyo in the period as it shifts its focus to acquisitions, betting on a recovery, he said.

“The market is not going to get worse from now on as investors wait for an entry point,” said Tanaka. “We don’t plan to sell aggressively as we see prices bottoming.”

Transactions volume in Japan rose as commercial land prices reached a 36-year low. The country’s 38 publicly traded real estate investment trusts more than doubled property purchases in the first quarter to 229 billion yen from the same period last year, according to IB Research and Consulting Inc


Residential and retail properties each account for one- fifth of total assets Cushman & Wakefield manages, with 39 percent in office buildings, according to data from the New York-based company.

While a stable return can be achieved in Tokyo, a quick rebound in real estate prices is not likely, Tanaka said.

“A stable return of 4 percent is not very attractive to opportunistic funds,” said Tanaka. “We are likely to see property prices recover gradually.”

Japan’s commercial land prices declined 6.1 percent in 2009, the Ministry of Land, Infrastructure, Transport and Tourism said in a report in March. Values are at their lowest since the ministry began collecting comparable data in 1974.



http://www.businessweek.com/news/2010-06-28/cushman-wakefield-to-add-japan-assets-as-prices-near-bottom.html

June - Property Prices near bottom?

Property prices in Japan may be near the bottom because transactions are picking up as loan default rates begin to decline, said Yuji Hashimoto, a director at Standard & Poor’s.

“We’ve started to see some property transactions taking place at about 20 to 40 percent discount,” said Hashimoto, director of the structured finance ratings division at S&P in an interview in Tokyo. “This tells us that the impact of loan default for the property prices is likely to be limited going forward and property prices may have bottomed.”

The percentage of default in loans backing commercial mortgage backed securities rated by the U.S. rating company narrowed to 19 percent in the first quarter, a second straight decline, a report by S&P dated May 7 showed. The default rate shrank from a peak of 63 percent in the third quarter last year.

Investors including Chuo Mitsui Trust & Banking Co. and CLSA Capital Partners have said they will invest in real estate in Japan this year after the nation’s commercial land prices fell to the lowest in at least 36 years. At least 115 billion yen ($1.25 billion) of properties backing CMBS have been sold by special servicers as collateral since the second quarter of 2009, according to Fitch Ratings.

“The best time to invest is before things hit bottom, because if everyone were to agree we are right at bottom, they would all come rushing back in,” said Buddy Ferrie, a general manager of the investment division at property consulting firm Colliers Halifax in a phone interview in Tokyo. “If you have a longer term outlook, now is a very interesting time to be looking.”

Loan Refinancing

Japan’s commercial land prices declined 6.1 percent in 2009 from a drop of 4.7 percent a year earlier, the Ministry of Land, Infrastructure, Transport and Tourism said in a report in March. Values are at their lowest since the ministry began collecting comparable data in 1974.

Faced with decline in property prices, building owners are injecting capital to refinance loans or returning properties to lenders as collateral when loans are coming due or being reviewed by banks.

Shinsei Bank Ltd. sold Pacific Century Place, an office building adjacent to the Tokyo station, after K.K. DaVinci Holdings, the owner of the building, failed to repay loans. Secured Capital Japan Co., an investment management company, bought the building for 140 billion yen, 30 percent less than what DaVinci had paid three years earlier.

“Larger loans are more likely to be rescued or receive extension of repayment because many people believe that it is not wise to sell large properties in the current market conditions,” said S&P’s Hashimoto. “As a result, they are less likely to default

http://www.businessweek.com/news/2010-06-03/japan-s-property-set-to-recover-as-prices-near-bottom-s-p-says.html