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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

Japan slips in global competitiveness rankings

For the first time in 17 years, the United States is no longer the most competitive economy in the world, according to IMD’s annual competitiveness survey. The US dropped to third place, as Singapore and Hong Kong surged ahead in the rankings. Read more

The DPJ really doesn’t get it or: How I learned to stop worrying and love the market

A slew of contradictory economic data is pouring out of Japan this week: McDonald’s saw net profit fall 80% in the first quarter while Uniqlo sales fell 12.4% in April. However, the Japan Center for Economic Research says that GDP increased 1.4% in March against February, for the second straight monthly rise. Miki Shoji reports that in April, Tokyo office vacancies hit an all-time high for the third consecutive month, at 8.82% - the highest reading seen since the firm starting tracking vacancy rates in 1989. Read more

Japan’s GDP down 0.3% in January

According to a report released Wednesday by the Japan Center for Economic Research, Japan’s GDP fell by 0.3% in January compared to the previous month, showing a decline for the first time in two months. January’s figures contrast the 0.3% increase seen in December. Read more

Massive Fiscal Stimulus Spending Project Proposal #2: Changing Lanes

Back in May, I laid out a plan by which the Japanese government could waste tremendous amounts of public money by simply issuing brand new bank notes of radically different sizes and shapes, while outlawing the use of current bank notes.

While the previous plan could potentially pump billions of yen into the economy, the next plan should cost much more. To do this, Japan simply has to switch driving from the left to the right side of the road. Of course, other countries have pulled this off without spending huge sums of money, such as Sweden, but Japan can avoid falling into this trap by ensuring that the process be as expensive and wasteful as possible. Here’s how it works: Read more

Cabinet Office data showing recovery?

Earlier today, the Cabinet Office released its Index of Business Conditions report for April. Data showed the Coincident Index moving up 1.0 points to 85.8 points, for the first increase seen in 11 months. Based on this information, the Cabinet Office upgraded the language in its monthly report for the first time in nine months (they were behind the curve) to say that signs of the economy ”ceasing to fall” are seen rather than that the economy is ”worsening.”

Media sources were quick to herald the results. The Nikkei announced that the 1.0 point rise in the coincident index was “adding to signs that the economy has been recovering from the worst recession since the end of World War II.” Read more

Paul Krugman visits Japan

As reported earlier today by Japan Probe, Paul Krugman recently visited Tokyo and offered an evaluation of some of the economic stimulus attempts the Japanese government has made thus far. Krugman gave the lowering of expressway fees to a flat 1,000 yen a score of 40 out of 100, due to the fact that such a measure might increase traffic jams and the sales of gasoline. Krugman scored the 12,000 yen rebate program a 0 out of 100, and reserved judgement on the government’s new program to offer “eco points” to consumers who make purchases of “green” products. Read more

Swine flu a convenient scapegoat? Should the media look in the mirror?

An article published yesterday at the Japan Times opens by telling us that the H1N1 swine flue virus is hurting industries such as tourism and retail, especially in Western Japan. Of course, economists fear that the impact of swine flu will only make a bad situation worse.

Near the top of the article, however, we get this quote:

The outbreak “could pour cold water on the Japanese economy at a time when it just started to bottom out and was about to recover,” said Toshihiro Nagahama, chief economist at Dai-ichi Life Research Institute Inc.

Emphasis mine. The writers of the article never comment on whether or not this assertion is true, and no figures are provided to back it up. We’re simply supposed to accept the assertion that the economy has “bottomed out” at face value? While it’s certainly hard to imagine seeing anything resembling the previous quarter’s GDP figures coming up again sometime soon, and exports and production figures are looking better, that doesn’t necessarily mean things have bottomed out. Read more

Massive Fiscal Stimulus Spending Project Proposal #1: Currency Manipulation

This article is the first of a string of proposals detailing how the Japanese government could launch a series of projects resulting in massive fiscal stimulus as well as boosted corporate and consumer spending. It is important to keep in mind that the proposals put forth in this series are essentially insane, but would lead to government, corporate and personal spending on a massive scale.

The first idea in this series should wreak havoc and cause panic spending in all sorts of sectors, while simultaneously creating millions of new jobs. To do this, the Japanese government simply needs to create new banknotes and coins that are all radically different in size to what currently exists. Ideally, notes should be larger and differently proportioned, while the size and weight of all coinage should dramatically change. Read more

Sunday Japan News Roundup: Nintendo, the US, bonuses and Aso’s economic plan

A quick look at some of the big (and not so big) stories on Japan this past week:

First, BusinessWeek asks “Has Nintendo Peaked?” in an article published on Thursday. Essentially, the future worries center on whether or not Nintendo can continue to sell the number of Wii and DS consoles that it has over the past couple of years. Nintendo has done a great job getting people who usually would not buy video game consoles to make purchases, but could they run out of growth steam over the next year? The article points out that sales in Japan seem to be slowing, and that Sony’s Play Station 3 has outsold the Wii in both March and April of this year.

The Financial Times announced on Friday that “US belatedly learns lesson from Japan,” while Arnold Landy at Seeking Alpha published an article entitled “The U.S. Economy: Not a Repeat of Japan.” There has been plenty written on this topic already, and surely more to come as things continue to play out. Read more

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