It’s time for another look at Japan’s business world. After a lengthly Spring vacation, Albrecht Stahmer and Ken Worsley are back with the third edition of BizCast Japan. Quite a bit has transpired since the last release, so this time we have about ten extra minutes of talking time. Here’s a breakdown of the agenda:

Headlines:

The Small and Medium Enterprises Agency has launched the “Japan Brand” initiative. What are we to make of this? Is the “Japan Brand” something that could pick up some traction, or is this project just an excuse to use up budgetary allocations at the end of the financial year?

Speaking of Japanese brands, Toyota is projected to beat its own 2007 growth forecasts in North America by about 500%. At the same time, it has been suggested that Lexus will prove more popular in Europe and Japan than the US.

All Nippon Airways suffered quite an operational breakdown on Sunday, and was forced to cancel 63 flights with about 11,000 passengers being inconvenienced. At the same time, Japan Air Lines continues their sale of assets, this time looking to sell off 49% of their credit card operations. What are they doing to return to profitability?

Finally, 7&I, the parent company of 7-11, Ito Yokado and Denny’s in Japan, is set to launch its own store brand, called “Seven Premium.” At 20-30% below standard prices, we’re not sure where the “premium” is, but we like the idea.

Quick Picks:

(Read on …)

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In the “Last Word” appended to the most recent edition of TPR News, I asked:

What do you do when you’re an outrageous liar and everyone knows it,and you know everyone knows it, and they know that you know, etc.?

I went on to say that, if you were Minister of Agriculture and Fisheries Toshikatsu Matsuoka, you would continue to lie and laugh as Prime Minister Abe continued to defend you, continued to claim you’d answered questions right after you’d refused to do so.

Well, there’s one more step you would take were you Matsuoka. The last one.

We here at TPR had called for Matsuoka to leave, but we didn’t think it would happen like it did. Shortly after noon today, Mr. Matsuoka was found in his government apartment by an aide. He was unconscious, having hanged himself, and died in hopital shortly thereafter, apparently without ever regaining consciousness.

From Nikkei:

Farm Minister Dies In Apparent Suicide, Dealing Heavy Blow To Abe Govt

TOKYO (Nikkei)–Agriculture Minister Toshikatsu Matsuoka died Monday at a Tokyo hospital after being found to have hanged himself in an apparent suicide, police said. He was 62.

The death of Matsuoka, who had been under fire for his dubious use of political funds, comes as a major blow to the government of Prime Minister Shinzo Abe, which is preparing for the upper house election scheduled for July.

Matsuoka came under fierce criticism when it was revealed that his funds management body booked utility costs as political expenses. Even some within his own ruling Liberal Democratic Party called for his resignation.

On the day of his death, the minister had talks with his secretary in his residence for Diet members in Tokyo’s Akasaka district until around 10 a.m. When Matsuoka failed to come out of his 11th floor room after the meeting, the secretary went back in to check on him, only to find the minister unconscious. The secretary and other staff members sent Matsuoka to the hospital, but efforts to resuscitate him failed.

Scandals plagued Matsuoka from the outset of his tenure as farm minister. When the accounting scandal came to light immediately after he took the post, Matsuoka denied any wrongdoing, saying, “The expenses were neither fictitious nor a cover for something else.” The prime minister repeatedly defended the embattled minister, saying at one point, “I see no problem.”

Earlier this month, Matsuoka came under suspicion for his possible involvement in bid rigging related to the government-affiliated Japan Green Resources Agency (J-Green), prompting some fellow LDP lawmakers to call for his resignation.

Matsuoka was elected to the lower house six times from the third electoral district of Kumamoto Prefecture on the southern Japanese main island of Kyushu. He became a cabinet member for the first time with his appointment as farm minister by Abe in September 2006.

(The Nikkei Monday evening edition)

The suicide of any high profile politician, especially one beset by scandal for six months, opens the door to a great deal of speculation, not least about the timing of his suicide, the role political opportunity played in it, how it will help or hinder the Prime Minister and the LDP or the opposition DPJ, and how and why Matsuoka held on and retained Abe’s support for so long after it became clear he was lying.

If you’re into that sort of thing, the next Seijigiri will be out earlier than usual - the domestic political scene will see a flurry of activity and the DPJ will have to toe the line between electioneering and being seen as insensitive. Most immediately, who will Abe apoint as Farm Minister? Chief Cabinet Secretary Shiozaki has already announced the speedy naming of a replacement.

Mr. Matsuoka was a liar and a crook, who insisted on dragging his scandal out when caught. This strategy brought some political gain to his party, but not to his country and, in the end, apparently not to his conscience, either.

To his family, we here at TPR extend our condolences - it is never the guilty who suffer, but those closest to him have gotten no reprieve.

Messrs. Honma and Sata, guilty of similar improprieties, resigned long ago. Let’s hope Mr. Ibuki, the highest-ranking of the remaining huddle of political fund report-fudgers, steps down less melodramatically, for everyone’s sake.

We are, miraculously, once again on time with this release of Seijigiri. In this edition of the show, we begin by looking at what the Economist has to say about the recent boost in Prime Minister Shinzo Abe’s approval ratings, and quickly move on to a discussion of recent developments concerning problems with Japan’s pension and social insurance systems. Last Friday, at a Lower House committee session in the Diet, Prime Minister Abe suggested that a fix-it bill be passed quickly, and that, “We must not stir up unrest among the public.”

(It’s worth noting that just hours after we recorded this, the Nihon Keizai Shimbun reported that approval ratings for Abe’s Cabinet had dropped to a record low of 41% - a 12 point drop from last month.)

(And, it’s also worth noting that a few hours after that, Minister of Agriculture, Farms and Fisheries Toshikatsu Matsuoka died in a Tokyo hospital after apparently having hanged himself. More on this to come.)

That leads into a discussion concerning how problems with the pension system are being mined for political gain by both the Democratic Party of Japan and the ruling Liberal Democratic Party. In 2004, the DPJ used the pension system as an issue to make large gains in that year’s Upper House election, and it looks like they will take a similar approach this time around.

The other issue that promises to loom large in the upcoming Upper House election is how to deal with rural districts, and the farm vote in particular. There are 29 single-seat votes up for grabs, with many in rural areas, and both parties are trying to do anything they can to get those votes. Has the DPJ upstaged the LDP thus far? Will the public see through the absurdities of the DPJ’s proposals? We discuss how the LDP, which is not usually on the defensive when it comes to rural voters, might fight back.

Finally, we take a look at the LDP’s election platform. We consider some of the ideas being suggested as platform planks by Party Policy Chief Hidenao Nakagawa, including the mergers of prefectures, defense issues, crime and safety, and education reform.

As always, thank you for listening. We’re hoping to be back with Seijigiri #26 during the week of June 11.

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Amid intensifying rivalry between Tokyo and Beijing over influence in Asia, Japan is revving up its drive to strengthen relations with countries in Indochina, an economically backward but geopolitically important part of the region.

The target countries are Cambodia, Laos and Vietnam, which are collectively referred to as the “CLV” countries. To be sure, these countries are all relatively small in terms of economic size and represent a tiny fraction of East Asia’s economy.

Their combined gross domestic product (GDP) was only about US$62 billion in 2005, with Vietnam, the biggest of the three, accounting for about 85% of the total, with $52.8 billion. The combined GDP of Japan, mainland China, South Korea, Hong Kong, Taiwan and the 10-member Association of Southeast Asian Nations (ASEAN) totaled nearly $9 trillion in 2005.

(Read on …)

In this edition of TPR News: elections, party platforms, soldiers moving, Steel Partners, pessimism about the US economy, a couple of court cases, what to give the Yomiuri when you send a gift, and how to handle yourself the Matsuoka way.

TPR News is proudly supported by O-Creative.

Politics

Last May, Japan and the US came to an agreement on the realignment of American forces in Japan, which included the controversial relocation of US Marine Corps Air Station Futenma from Ginowan to Nago in Okinawa and the moving of carrier-based aircraft from Atsugi Naval Air Base in Kanagawa to Iwakuni Marine base in Yamaguchi. This past Wednesday, the House of Councillors passed an LDP-New Komeito-supported bill, passed by the House of Representatives on April 13th, that would provide subsidize local governments for hosting US military facilities.

The law would give the Defense Ministry discretion in subsidizing localities based on the level of cooperation received. The money would be disbursed at four times: when the realignment plan is accepted, when an environmental impact assessment is implemented, when construction begins, and when construction is complete and the facility opens. The law, which also allows for loans and investment to be made by the Japan Bank for International Cooperation in support of the relocation of 8,000 US troops to Guam, is set to run through March 2017, at which point it could be renewed for up to five years.

(Read on …)

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There’s a whole lot of lively debate going on out there in the Japan blog scene, and it’s good to see. It is, however, hard to keep track of at times. I thought I’d give a summary of some of the better stuff I’ve seen recently. I don’t mean to imply that I agree with what everyone’s saying, but they’re raising good points for discussion and that’s half the battle…

First, over at Observing Japan the Japan Observer has been putting some mileage on his keyboard as of late, and that’s a good thing. His “What if they had a debate…” post of May 17 gives a good summary of the recent exchange in the Diet between prime Minister Shinzo Abe and DPJ President Ichiro Ozawa. The conclusion, that Ozawa’s days as DPJ President are numbered, is one I agree with, though I think for the DPJ to turn in a solid result in July’s Upper House election, they may not be of short enough number. We’ll be coming back to this blog in a bit…

Over at Liberal Japan (formerly Japan in Amber), Matt Dioguardi’s “Shinzo Abe, American neoconservatives’ friend in Japan” is worth your time. Mr Dioguardi has dug up this quote from Shinzo Abe’s 2004 speech to the American Enterprise Institute:

(Read on …)

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In this edition of TPR News: More constitutional reform, Abe is up in the opinion polls, the LDP is both up and down, the Justice Ministry enters the fray over the foreign trainee-worker program, GDP growth slows, interest rates remain unchanged, Japan is the most innovative country in the world and Japanese women have the world’s greatest longevity with which to enjoy it, those same ladies might have more violence to fear, a bit on whaling, and baseball comes to Japan.

TPR News is proudly supported by O-Creative.

Politics

The Maritime Self-Defense Force First Service School in Etajima in western Japan was raided by state and naval police forces, on suspicion that sensitive information concerning warships had been leaked. The compromised data relates to US-developed Aegis radar technology which is used jointly on several advanced Japanese destroyers. The information leak was first discovered in March, when police found the information on a computer at the home of a 33 year old MSDF petty officer in Kanagawa who was not authorized to possess the information. At that time, police were investigating the immigration status of the petty officer’s wife, who is Chinese. Japan’s Ministry of Defense refused to comment on the matter.

(Read on …)

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 TPR News: 5/21/07: Play Now | Play in Popup | Download

Analysis: A significant step toward revising the nation’s postwar pacifist constitution

In a historic step toward the first revision of the country’s postwar pacifist constitution, Japan’s Diet (parliament) enacted a bill on Monday setting the rules for a national referendum required for any constitutional changes, on the strength of the Liberal Democratic Party (LDP)-led coalition’s majority in both houses of the Diet.

Since taking office last September, Prime Minister Shinzo Abe has advocated a more assertive foreign policy and further strengthened security alliance with the United States, Japan’s most important ally. He has also called for a “departure from the postwar regime” and vowed to seek revisions of the constitution as his top-priority goal to allow the nation to play a greater role in the international security arena, especially in step with the U.S. Abe has specifically expressed a strong desire to see the constitution, which took effect in 1947, revised within five years.

To be sure, the national referendum law marks a significant step toward revising the constitution. But it remains to be seen whether the constitution will actually be revised as early as Abe wants. Japanese public opinion is evenly split over changing the nation’s supreme law.

(Read on …)

Last Friday, May 11, a special committee in the Upper House approved a bill establishing rules under which Japan would hold the national referendum necessary in order to enact any reforms to the nation’s Constitution. The full Upper House then promptly voted to pass the bill into law on Monday of this week. As it has now passed both houses of the Diet and become law, the constitutional reform bill is set to become a large feather in the cap of Prime Minister Shinzo Abe, who has been pressing hard for a law setting the rules for making amendments to Japan’s Constitution since taking office in September of last year.

Although opposition parties expressed a desire to debate the bill further, and to hold public hearings on its contents, this was skipped over because the LDP had enough of a majority in the Upper House to declare that sufficient debate on the bill had already taken place in the Diet. Thus, demands from opposition parties that a minimum voter turnout be necessary in order for a national referendum to be valid were tossed aside, and the LDP was able to exercise, and demonstrate, its Parliamentary strength in moving this piece of legislature through both houses of the Diet in relatively quick measure.

It now seems as though the prospect of constitutional reform in Japan is very real indeed, though the exact shape that such reform will manifest as is still very much unclear. It will take a period of three years or so to draft amendments (though some preliminary drafts already exist), debate them, revise them and bring them to a vote in the Diet, but the legal framework to then bring those amendments to a vote in the Diet, and if approved, to a national referendum, now exists.

(Read on …)

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In this edition of TPR News, we take a look at the constitutional reform bill that passed the Upper House and into law on Monday, the Prime Minister’s boost in approval ratings, Japan’s defense ties with the United States, the state of the Prime Minister’s reforms to the education system, Japan’s reported drop in global business competitiveness, the sale of kidneys, and a roll call of train molesters.

TPR News is proudly supported by O-Creative.

Politics

The big news, of course, is the Upper House’s approval of a referendum bill for possible future constitutional reform.

The bill passed the House of Councillors a month after its passage in the House of Representatives unaltered, which came as a disappointment to the DPJ, which had submitted a similar bill that went undebated, and other opposition parties. While later than he would have liked, the bill’s passage is seen as a victory for Prime Minister Abe, who has said he would make constitutional reform the centerpiece of his administration.

Abe wants, in particular, an amendment to Article 9, often referred to as the war-renouncing clause of Japan’s pacifist Constitution, in order to allow Japan to take a more assertive stance in foreign policy, including overseas military deployment.

(Read on …)

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