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Construction orders down a record 44.9% in July

According to data released Thursday by the Japan Federation of Construction Contractors, construction orders received in July by its 49 member firms dropped a record 44.9% year-on-year to 593.2 billion yen. July was the ninth consecutive month in which construction orders have fallen, and the second month in a row in which they have set a new record low.

According to the report, private sector orders fell 49.7% to 409.5 billion yen. Meanwhile, orders from non-manufacturing firms dropped 52% to 279.5 billion yen while orders from manufacturers slid 44.2% to 130 billion yen.

Mobile phone price wars set to commence?

Softbank has announced that starting next Tuesday, it will waive its 980 monthly fee for five months for all customers who switch from another carrier and sign up for the company’s popular White Plan. Until July, Softbank had led all carriers in new subscriptions for 26 consecutive months, though NTT DoCoMo moved in front last month. This move looks designed to put Softbank back on top of that list.

Following the announcement, share prices for all three of Japan’s major mobile carriers fell, with Softbank falling 40 yen per share to 2,075. Also on Thursday, the Nikkei reported that Softbank is set to issue about 60 billion yen worth of three year notes to retail investors, with a coupon around 4.5%, sometime in September. Softbank also issued 60 billion yen worth of two year notes back in June. Read more

Department stores, convenience stores see sales slide further in July

Japan’s department stores and convenience stores have little to feel positive about after July sales results rolled in. According to data released by the Japan Department Store Association, sales at department stores nationwide fell 11.7% in July, marking the seventeenth consecutive month of decline. The survey covered sales at 87 department store operators with 272 shops.

Here is the breakdown of sales by individual categories: Read more

DPJ President Yukio Hatoyama: Japan must shake off US-style globalization

A translation of an opinion piece entitled Japan must shake off US-style globalization by Democratic Party of Japan leader Yukio Hatoyama appears in this week’s edition of the Christian Science Monitor. As Hotoyama is widely expected to be the next Prime Minister of Japan after the results of next Sunday’s election come in, the article offers some important insight into what opinions Hatoyama feels will curry favor with the Japanese public in the run-up to the election.

Hatoyama starts the essay with this: Read more

GDP up on government spending

Despite the 0.9% rise in GDP over the April-June quarter, there remain some skeptics worried about how strongly Japan will be able to recover from multiple quarters of negative growth. The Nikkei published an article yesterday entitled “Jobs Weakness Could Slam Brakes On GDP Growth, Economists Fear“. The Nikkei puts it simply: “For Japan, the biggest challenge is whether the stimulus measures can create sufficient private-sector demand to trigger a self-sustaining economic recovery.” Of course, this is impossible, as stimulus measures are temporary and mainly serve to increase national debt.

While the government stimulus package has spurred the economy to some degree, we also know that about 290,000 full-time jobs and 470,000 temporary jobs have been lost over the past year. There were 760,000 fewer people employed in the April-June quarter against a year ago. Read more

Cabinet Office: Economy Watchers Survey up for seventh straight month in July

Earlier today, the Cabinet Office released the results of its monthly Economy Watchers Survey, and the results showed a 0.2 point increase to 42.4 points.

The Economy Watchers survey is measured as an index with a score above 50 indicating a positive view of the economy and a score below 50 representing a pessimistic overall view. The survey measures sentiment amongst taxi drivers, restaurant staff, barbers, and other service industry workers sensitive to frontline economic conditions. The index itself has now been below the 50 mark for the past 27 months. Read more

DoCoMo led all mobile carriers in July new subscribers

As an update to last week’s article on quarterly losses at NTT, it was announced Friday that out of Japan’s mobile service providers, NTT DoCoMo gained the most new subscribers in July.

Prior to July, Softbank had gained the most new subscribers for 26 consecutive months. It had been 35 months since DoCoMo led a single month in subscription gains. DoCoMo added 143,600 users in July to reach 55 million subscribers, while Softbank added 137,600 users to reach 21.1 million in total. AU added 56,600 new users and now has 31 million subscribers.

Apple’s iPhone, carried by Softbank, was the second most popular handset sold in July, while Sharp’s Aquos Shot, a DoCoMo offering, saw the highest sales.

Does this signal the end of Softbank’s reign at the top? DoCoMo has slashed data transfer fees, and it may prove more difficult for Softbank to follow suit. Back in April, DoCoMo announced that the cut in data fees would reduce its operating profit by about 40 billion yen. Still, it remains to be seen how long DoCoMo can stay in the top spot, or how much it might cost the company to gain market share percentage points.

Japan’s public pension fund lost a record 10.17 trillion yen in fiscal 2008

In fiscal 2006 and 2007, Japan’s public pension system managed to log losses. In FY2007, the fund earned money on government bonds, but lost a whopping 7.5 trillion in in equities positions. The total FY2007 loss, 5.65 trillion yen, was the largest on record. Until fiscal 2008.

Yesterday it was announced that the public pension fund lost 10.17 trillion yen in FY2008. This was the third straight year in which the fund has lost money. According to the a report from the Ministry of Health, Labour and Welfare, The fund experienced a 0.9% increase in revenue due to premium rises, while pension payouts increased by 2.7%.

Thus, the fund itself saw a rise in payouts that outstripped the increase in premiums, while losing 10.17 trillion yen at the same time.

Are the manifestos of either political party valid at this point?

A tale of two businesses: NTT and McDonald’s release results

Earlier today, NTT announced that its net profit had fallen 20.5% in the first quarter (April-June) of 2010, to a total of about 139.6 billion yen. At the ame time, operating income fell 12.4% to 325.8 billion yen.

Without question, NTT is operating in a hostile, competitive environment, especially with regards to its mobile unit, NTT DoCoMo. Last week, DoCoMo announced that first quarter profit had slid 15.1% to 147.4 billion yen. It is now obvious that DoCoMo is becoming a burden on the NTT group. In March 2008, DoCoMo’s share of Japan’s mobile phone market fell below 50% for the first time since 1998, as rivals AU and Softbank have chipped away at their customer base. How did DoCoMo fight back? They offered free calls between family members, released a line of new handsets and rolled out a new logo. Read more

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