But, we have to expect there to be some mismanagement on the business end as well. Tashiro gives an interesting, though brief, look into how the ticket situation has been bungled by the combination of the IOC, JOC and Japanese travel agencies. Here’s one illustration:

In the case of judo, for instance, [ANA Sales] has 50 tickets for the preliminary rounds but 10 for the finals. “You can’t tell a customer to watch only the early rounds and then go back to the hotel to see the finals,” says Sawaki. “It’s a hard sell.”

One factor not mentioned in the article, however, is that overseas travel in general (not just to China) is down this year. This points to economic troubles amongst those who would usually be saving up to make such a special trip. Higher travel prices and stagnant wages are taking their toll as overseas trips are being put off. Domestic travel destinations may benefit as a result, but electronics firms had probably counted on selling a lot more digital cameras to people heading off to the Olympics.

Most likely there is a balance of factors. China’s image has taken a battering in the Japanese media and people have less disposable income. Perhaps other residents figure they just might be able to wait until 2016 to see the games in Tokyo, as the city is now offering what Reuters calls a “blueprint” for large cities planning to host the Olympics in the 21st century.

[N]ew agriculture minister Seiichi Ota also spoke to reporters on Monday, saying that Japan needs to achieve a level of food security. Can Ota put policies in place to help Japan boost its current 39% self-sufficiency rate on a calorie basis.

This morning, Kyodo reported that Japan’s food self-sufficiency rate had risen one percentage point to 40% in fiscal 2007. This was the first rise seen in 13 years. Former Agriculture, Forestry and Fisheries Minister Masatoshi Wakabayashi had set a goal of reaching 50% food self-sufficiency by 2015. New Agriculture, Forestry and Fisheries Minister Seiichi Ota told reporters, “We will make efforts both on the production and consumption sides to ensure this trend.” (more…)

As Prime Minister Yasuo Fukuda has directed new Economic and Fiscal Policy Minister Kaoru Yosano to come up with new ideas to boost the economy, the government itself still faces the stiff challenge of winning over public sentiment to any plan involving a hike in consumption taxes - a path which Yosano clearly favors. Back in October of last year, we reported that the Ministry of Finance had hired its first employee ever through a public appointment process. Yoshio Masuda, a 48 year-old who served with Dentsu for about ten years, was hired for a two year stint as the ministry’s Director of Public Relations Planning and Coordination, a position believed to be involved with helping the ministry communicate its decisions better to the public. (more…)

In May we saw a fall of 3.2% after a drop of 2.2% in April and 1.6% in March. The Ministry also tells us that average household income declined 2.1% against June of 2007, falling to 737,166 yen. June income seems high when compared to other months due to the summer bonus being received in June. This year saw the average bonus falling for the first time in six years, though the decline was only 0.08%. A separate report from the Ministry of Health, Labor and Welfare showed overall wages falling 0.6% in June.

Here’s a breakdown of spending per category, along with changes against June of last year: (more…)

Of course, Japan includes energy prices as part of its core CPI, and we have now seen for two straight years that it is necessary to keep track of not only “core” consumer prices, but also what the CPI looks like when energy is also stripped out. Here’s a breakdown of CPI categories for June:

• June general nationwide consumer price index: +2.0%
• June general nationwide consumer price index (excluding rent): +2.3%
• June nationwide core CPI (excluding fresh food): +1.9%
• June nationwide consumer price index (excluding fresh food and energy): +0.1%

Thus, with fresh food and energy prices stripped out (Japan also strips out the prices of alcoholic beverages, which have been on the rise), we see a 0.1% increase for the second time this year. This is only the second increase seen in this category over the past decade.

Here’s a breakdown of price increase by major category:

• Fuel, light and water charges +6.8%
• Transportation and communication +4.3%
• Food +3.6%
• Education +0.7%
• Miscellaneous +0.6%
• Clothes and footwear +0.5%
• Housing +0.2%
• Furniture and household utensils -0.4%
• Medical Care -0.5%
• Reading and recreation -0.6%

These figures are little changed from May. The same categories that rose in May rose again in June. Those that fell in May also fell in June. The largest differences can be found in the top three rising categories, which all saw increases at least 1% higher than a month ago.

Looking at individual categories, about 60% of products surveyed saw a rise in prices. Transportation expenses are pushing up the prices of fresh food as well; carrots, negi and spinach all cost over 10% more than a year ago.

The big question now is whether or not core CPI will see a jump above 2.0% in July, as 2.0% is what the Bank of Japan’s policy board considers to be the upper limit of price stability. Few expect to see a rate hike in August or September, but could the BOJ’s hand be forced by its own policy?

The Japanese government has very clearly stated its goal to continue seeing an increase in the number of tourists coming to Japan from foreign shores. As we covered previously, the government has set targets of 10 million visitors by 2010 and 20 million by 2020.

In terms of numbers, visitors from South Korea made up the largest group, with 1.32 million visiting Japan from January to June That figure was up 8.1% on the year. The largest percentage rise was seen from Hong Kong, which sent an increase of 36.7% more travelers, to hit 267,000. (more…)

Edward Hugh has a very convincing argument that recession might hit Japan, and his analysis is based upon data showing sluggish exports, which absolutely might impact Japan’s GDP in a negative direction. Mr Hugh’s thoughts are very much worth a read at this point in time. I agree that sluggish consumer spending is going to hurt Japan for some time to come, but will these declines in exports hold up? Will Japan be hit with negative GDP growth for two consecutive quarters? Only time will tell.

The future looks even brighter for convenience store sales. Reuters is reporting that the Taspo ID system, which must now be used nationwide to purchase tobacco products at vending machines, is providing a boost to tobacco sales at convenience stores. July’s sales increases are projected to surge into the double digit range.

Share prices at major supermarket chains Family Mart and Lawson are up 22% over the past quarter, as the market anticipates what could be the highest sales growth posted in the past decade at many convenience store operators.

One interesting part of the Reuters article: While department stores and supermarkets continue to blame bad weather for their decline in sales, “price hikes at supermarkets and favourable weather have helped sales [at convenience stores].”

Of course, growth from tobacco sales will be filtered out of the system in a year’s time, and Japan’s convenience store chains are still going to have to find ways to continue increasing revenue, which means we still expect to see Japanese convenience store firms make further attempts to establish overseas operations.

As we continue to see almost every month, outside of food sales, supermarkets are not doing very well at all. Here is a breakdown of June’s adjusted figures:

• Food: +2.4%, 62.0% of total revenue
• Household Products: -4.5%, 19.6% of total revenue
• Clothing: -9.8%, 12.2% of total revenue
• Miscellaneous Items: +2.0%, 5.9% of total revenue
• Services: +0.2%, 0.4% of total revenue

Sales per square meter fell 2.8% to 47,745 yen. (more…)