Archive for the 'Economy' Category
Eating good food is one of the joys of living. Good food satisfies our appetite and makes us feel happy. Eating fine foods is a joy for many Japanese. Some Japanese go to Napoli to taste real Napoli pizza; others go to Okinawa to enjoy goya champuru (bitter gourd), a famous Okinawa cuisine.
How can we maintain the joy of eating easily when recent oil price surges have affected our spending and lifestyle? With only 1,000 yen in one’s pocket, there are still many ways of getting good food, satisfying our appetite, and making us feeling happy.
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August 16 2008 | Clothing, Food and Housing and Economy and Health Care and Life and Research and Technology and Weekly Articles | No Comments »
Like in other countries, oil price increases have pushed up inflation in the Japanese economy. The price of every item has increased, including gasoline, food, and air surcharges. Checking my household account is the scariest of my daily routines, and it urges me to do something to manage my spending. Well, it looks as though I am not the only Japanese who thinks this way. The following explains how the Japanese cope with inflation:
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July 25 2008 | Economy and Weekly Articles | No Comments »
Advertisements for tenshoku (career change) are found everywhere in Japan. On the packed commuter train there are wall banners advertising career change fairs and recruitment companies. On websites there are sections entitled “job vacancies” and “changing jobs”. On Japanese search engines such as Yahoo! Japan there are online recruitment sites for full-time, part-time and temporary workers. It seems from these advertisements that Japanese have no trouble in finding career opportunities.
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June 28 2008 | Culture and Economy and Weekly Articles | Comments Off
“Listen, we do business with established companies. Please come back after 3 years and tell us which companies use your services.”
This is what early-stage entrepreneurs are normally told when they make a visit to large Japanese companies. No matter how great their services or products may be, large Japanese companies are generally not in favour of using start-up companies.
Becoming a John Doe
Not matter which large company you worked for or what high position you held, you become John Doe the moment you leave the company and start your own business. A female entrepreneur recalled the early days in her own business saying: “My previous colleagues treated me like a stranger when I contacted them about my new business. They did not even want to meet me.” A Japanese gentleman who had just started his own business said: “My friends have stayed away from me since I started my own business.” He continued: “They assume I may ask for their money, which is completely wrong.”
Unpopular John Doe
The John Doe is not popular among financial institutions. Large Japanese banks are not willing to lend money to start-ups until the business is proven to generate profits. National Life Finance Corporation offers business loans for stat-up companies, but its interest rate for start-up loans without collateral is a little higher (standard rate plus 1.2%) than those for small business loans. Likewise, Japanese venture capitals are inclined to invest in ventures after the business model is proved to be successful.
A John Doe company is not popular among job applicants either. Start-up companies require their employees to work very hard, but they cannot pay them very much. Especially in tight labour markets, large companies have the advantage of being able to offer higher salaries then start-up companies when trying to attract labour.
The Tipping Point Magic
However, the tipping point can change the situation completely. Successful Japanese entrepreneurs say that once they have even the smallest chance to demonstrate their products or services to customers, it is very easy to expand their business. The entrepreneur is not John Doe anymore. The entrepreneur’s name is everywhere; in newspapers, in magazines and on the web.
“I felt rewarded after going through such a hard period”, said a famous Japanese entrepreneur. “It is neither the fame nor the financial reward. It is the feeling of achievement after going through these hardships. You never experience this feeling unless you run your own business.”
April 16 2008 | Economy and Weekly Articles | No Comments »
“Yen daka” (yen appreciation) is now a common word flowing around Japanese websites, newspapers and TV programs. The US dollar/yen exchange rate was 95 yen on March 17, falling below 100 yen for the first time since 1995. This has resulted in certain booms in the Japanese market:
- Boom of Foreign Currency Buying
The high value of yen to US dollars has encouraged Japanese customers to buy foreign currencies. Sources say that there has been an increase in customers opening bank accounts to start foreign currency transactions. The customers want to buy a large number of US dollars while the value of the dollar is low. This has helped the business of Japanese financial institutions a little, which has been severely hit by subprime-related losses.
- Boom of Overseas Travelling
Thanks to yen appreciation, the number of Japanese travelling overseas has increased, especially the number visiting the United States. Importantly, the high value of the yen has helped travel agencies to recover the losses they have experienced due to high oil prices, which had reduced the number of travellers overseas. HIS, a Japanese travel agency, cheerfully says on its advertisement for overseas travel services: “Now, take this chance! Take advantage of the high value of the yen.”
- Boom of Imported Goods Sales
The high value of the yen also helps retailers to attract customers wanting imported goods. “Bargain sales of imported goods!” is the catchphrase for supermarkets, such as ItoYokado, to advertise fruit and vegetables from the USA, with low prices being offered on the web, in newspapers and on flyers to get the customer’s attention.
But…
It is not all good news; there is some bad news also. The yen appreciation hurts Japanese exporters, while it benefits Japanese consumers buying imports at a lower cost. Japanese stock prices continue to fall due to the loss in foreign investors, and Japanese politics are uncertain. The high value of the yen has cheered up the Japanese economy a little bit for now: but just for now.
March 28 2008 | Economy and Weekly Articles | No Comments »
Japanese consumer confidence has continued to fall. In January 2008 the consumer confidence index was 37.5 points, 0.5 points down from the previous month and 10.6 points down from the previous year. In addition to the overall index, other confidence index figures are down, including overall livelihood and income growth. Indeed, Japanese consumers have really lost confidence.
1. Worry about losing investors
One thing that makes the Japanese worry is the performance of the Japanese stock market. Since the summer of 2007, Japanese stock prices have continued to fall. The average stock price was around 12,500 yen last week, whereas the price was around 17,500 yen in July last year. Japanese economists worry that investors may no longer see the Japanese financial market as attractive as other markets such as China and the South East Asian countries.
2. Worry about few entrepreneurial activities
There is not much in the way of entrepreneurial activity that could revitalize the Japanese economy. According to the Global Entrepreneurship Monitor’s (GEM) 2006 results, early-stage entrepreneurial activity in Japan was 2.9%, the second lowest rate among the 42 countries surveyed. This rate is much lower than that of China (16.2%) and the United States (10.0%). This should make us worry that there are fewer business seeds being sown in the Japanese economy.
3. Worry about educational performance
Another worry is the decline in educational performance of Japanese students. According to the OECD International Student Assessment (PISA) survey of 2006, Japan saw a decline in reading performance between PISA 2000 and PISA 2006. Furthermore, Japan received the lowest score in self-efficacy; a score related to students’ belief in whether they can handle tasks effectively and overcome difficulties.
“We should do something …”
The Japanese government feels a sense of urgency to fix these economic and educational issues. To promote new business, the government offers promotion programs for current and prospective entrepreneurs such as new partnership activities and coordination of market development activities. For education, the Ministry of Education, Culture, Sports, Science and Technology is reviewing current educational guidelines to improve the scientific literacy and reading performance of students.
It should be mentioned that Japan should not worry too much about these issues. Japan is still the second largest economy in the world by real GDP. The literacy rate in Japan amounts to 99% of the total population CIA the World Factbook). However, it is true that the Japanese economy is not as booming as it was in the 70s and 80s, and Japanese students do not necessarily excel over students of other countries in any academic subject. It may be, therefore, only a matter of time before the Japanese begin to really worry about these issues.
March 14 2008 | Culture and Economy and Weekly Articles | No Comments »
Last time I wrote an article about the increase in the working poor in Japan, and the fact that the number of households with a low income has been rising. At the same time, the number of households with high net worth has also been increasing. Merrill Lynch estimates the number of high net worth individuals stood at about 1,48 million people in 2006: a 5.1% increase from the previous year (Source: 2007, Merrill Lynch, World Wealth Report).
So, who are ‘fuyuu sou’ (high net worth individuals) in Japan? How can they be characterized? Are they special people? Do they really look rich?
Definition of HNW Individuals in Japan
In general, high net worth (HNW) individuals in Japan can be defined as Japanese residents with 100 million yen or more. Nomura Research Institute defines a high net worth individual as a person with net worth between 100 million and 5 million yen, and a super high net individual as a person with net worth 5 million yen or over (Source: 2005, NRI, News release). Likewise, YUCASEE, a Japanese private club for high net worth individuals sets the eligibility for membership as individuals with 100 million yen or more.
Key Findings about HNW Individuals
1. Various HNW individuals
Although HNW individuals can be described as a segment in Japan, the HNW segment cannot be described by common characteristics and attitudes. Professionals such as lawyers and doctors who earn high annual incomes can be HNW individuals. Baby boomers who have just received a large retirement pension can also be HNW individuals, although they do not have large annual income.
2. Financially literate
High net worth individuals are usually financially literate. In a 2006 public opinion survey on household financial assets and liabilities, individuals with a high income are more aware of financial information, such as the deposit insurance system (Source: 2006, The Central Council for Financial Services Information). Similarly, a 2006 questionnaire about mutual funds, undertaken by the Investment Trusts Association, indicates that individuals with a high income are aware of, and interested in a wide range of financial products, such as stocks and mutual funds.
3. Ordinary appearance
Not all HNW individuals look ‘rich’. When I attended an interview for research into HNW individuals, a couple of gentlemen showed up wearing shabby clothes and a holding used paper bags in their hands. I could not tell whether they were HNW individuals or not until their identities were confirmed. However, this may be obvious because the less you use your money, the more you can save.
These findings suggest that there are many things companies can learn about HNW individuals when trying to sell them products and services. 
Although they have the common characteristic of possessing high net worth, their lifestyles, attitudes and needs can be very different. Furthermore, HNW individuals seem to be wise enough not to waste money on unworthy products or services.
March 07 2008 | Economy and Weekly Articles | No Comments »
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