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So much for the IMF

‎”(There is) a growing recognition that the dispersion of credit risks to a broader and more diverse group of investors…has helped make the banking and wider financial system more resilient. The improved resilience may be seen in fewer bank failures and more consistent credit provision.”
From the IMF’s (shortsighted) Global Financial Stability Review, April 2006

What rough beast slouches next to Washington to be bailed out?

Cracks re-emerging in Japan’s convenience store industry

A Nikkei report published today told us that Japan’s convenience stores experienced their second lowest annual growth in financial 2009 since 1978 as sales booms derived from the introduction of the TASPO card wore off. According to the paper:

Overall sales at domestic convenience stores edged up 1.1% in fiscal 2009 to mark their second-weakest rise since tracking of comparable data began in 1978, according to a survey by Nikkei Inc.

Overall sales came to 8.31 trillion yen, with the number of convenience stores growing by 1,075 to reach 46,069.

While sales are still on the rise, a 1.1% increase is not much to boast about; sales increases were below 2% in both FY2006 and FY2007. With the number of convenience store locations still increasing, it looks as though the sector is bound for price wars and the survival of the fittest (richest). On a daily basis, customer traffic per store fell 0.6% to 1,025 people in FY2009, while average sales per store dropped 2.4% to 487,000 yen per day. There were 8.6% more convenience store locations open in FY2009 than the year before.

The industry, however, clearly understand the problem:

Of the 27 convenience store operators offering responses on business conditions, 20 said the business environment has worsened. The most cited reasons were a glut of stores in urban areas and the expansion of store networks

Makes sense.

Many of the large convenience store chain operators now intend to slow their expansions this fiscal year while shutting down or relocating unprofitable stores…The four big players — Seven & i Holdings Co. (3382) unit Seven-Eleven Japan Co., Lawson Inc. (2651), FamilyMart Co. (8028) and Circle K Sunkus Co. (3337) — plan to open a total of 2,320 new stores, down 3.5% from last fiscal year. This figure excludes the 350 stores of the former am/pm Japan Co. that will be rebranded as FamilyMart stores. Meanwhile, store closings are projected to rise 7.8% to 1,540.

The Nikkei article fails to mention overseas expansion as the only viable growth model.

Why aren’t Japan’s megabanks joining the US on financial sanctions against Iran?

Earlier today, U.S. Assistant Secretary of Treasury David Cohen visited Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial Group to outline US financial sanctions against Iran. These sanctions were signed into law by US President Barack Obama on 1 July.

The fact that Japan’s megabanks have yet to comply with US sanctions is disturbing, to say the least. With Iran attempting to build nuclear weapons, its access to the global financial system clearly needs to be shut down. Japan, as a nation that stands for nuclear non-proliferation, needs to support the US government in its attempts to ensure that Iran does not use the international financial system to acquire nuclear materials.

The story behind the story: Japan may be bringing in PetroEuros from Iran, which is unacceptable. Iran was part of a consortium of nations that wanted oil traded in euros rather than dollars. The US needs to ensure that its closest ally, Japan, is paying for oil in dollars, while its banks are not allowing Iranian funds to be moved under the radar.

Cohen’s visit is an affirmation of the fact that finances have been observed moving in a way that is not advantageous to US interests and that such flows of funds must be stopped.

Nikkei: Western firms buying overpriced property in Japan

On Monday, the Nikkei published an article asserting that Western firms “are returning to the Japanese real estate market, taking proactive steps in the hope of big gains once the market improves.”

This, of course, means that they are paying too much for real estate investments that will turn sour. The Nikkei article has a picture of an office building that Deutsche Bank Group recently overpaid about 4.1 billion yen for. The building itself is aggressively unimpressive, not to mention that it’s located in Shibuya ward. Read more

Tourism Agency still not serious about tourism

A Kyodo article published today tells us:

A private advisory panel for Japan Tourism Agency chief Hiroshi Mizohata held its first conference on Friday with six experts on various subjects, including sports and business, discussing ways to promote tourism in the country…panel member Saburo Kawabuchi, honorary president of the Japan Football Association, said he hopes to propose ideas for promotion of tourism through exchange programs for soccer…Other experts include Softbank Corp President Masayoshi Son, Mori Building Co President Minoru Mori, Fuji Television Network Chairman Hisashi Hieda and Benesse Holdings Chairman Fukutake Soichiro…The number of foreign tourists to Japan was 6.79 million in 2009, down 18.7% from a year earlier. The government is hoping to attract 10 million visitors to Japan in 2010.

Read more

The number of registered foreigners declined for the first time in 48 years last year

TBS news tells us that according to the Ministry of Justice, the number of registered foreigners in Japan has dropped for the first time in 48 years. Here is their report:

Unsurprisingly, Chinese nationals are the largest group of registered foreigners in Japan, followed by Koreans, Brazilians, Filipinos and Peruvians.

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