Japan 01 (May 08 - Dec 09)

[ishak]

JPMorgan eyeing financing opportunities in Japan
Reuters, 04 Sep 2008

JPMorgan Chase & Co said it expects Japan's beleaguered property market to rebound and will use staff gained from its acquisition of Bear Stearns to develop its real estate financing business.

'There is a lot of interest in buying real estate right now both from domestic real estate investors and foreign investors,' Gregory Guyett, chief executive of JPMorgan Securities Japan, told Reuters in an interview. 'And those investors will look for financing. That's a business we think can be very attractive.'

JPMorgan gained some 80 employees in Tokyo when it took over troubled Bear Stearns in May, which has led it to expand its small real estate securitisation team to about 25 people.

The group, headed by a former Bear Sterns employee Rosario Antoci, may expand further depending on market developments.

In the wake of the credit crunch, a number of banks in Japan have tightened lending to small and midsized property firms, leading to a string of bankruptcies. But large firms have been relatively unaffected and some like Orix Corp have seen the downturn as an opportunity to go bargain hunting.

Mr Guyett named Fortress Investment Group, Blackstone Group and Mitsubishi Estate Co Ltd as active investors in Japan.

JPMorgan has also been hiring aggressively to develop its commodities and other businesses, and anticipates overall headcount to increase by about 5 per cent over the next year.

'You will see us in the early part of next year with a number of senior hires,' Mr Guyett said.

Recent hires include Hiroki Kazekami from Goldman Sachs Group Inc as head of its global commodities division in Japan.

'Even though commodity prices will fluctuate up and down, it's a major business that our corporate customers and investor customers are interested in,' he said.

It has hired former senior finance ministry official Yoshiaki Kaneko as a senior adviser to strengthen government and regulatory relationships, and Christopher J LaFleur as head of government relations and corporate responsibility.

Mr LaFleur once served as US Ambassador to Malaysia.

JPMorgan in June also hired Katsuyuki Kuki as vice-chairman of investment banking and head of its financial institutions group.

Mr Kuki has 20 years of experience in investment banking and worked at Lehman Brothers and UBS Securities Japan.

[ishak]

Japan firms' Q2 capital spending -6.5%
Reuters, 05 Sep 08

Japanese companies cut spending on plant and equipment by 6.5 per cent in April-June compared with the same quarter a year earlier, well below the median market forecast for a 2.5 per cent rise, a Ministry of Finance survey showed on Friday.

It was the fifth straight quarter of declines, following a 4.9 per cent drop in January-March.

Excluding software, capital spending fell 7.6 per cent from a year earlier. It decreased 6.1 per cent from the previous quarter on a seasonally adjusted basis.

The capital spending data is used to calculate revised gross domestic figures for the same quarter due out at 8:50am on Sept 12 (2350 GMT on Sept 11).

Preliminary GDP data showed Japan's economy shrunk a real 0.6 per cent in April-June, the fastest pace of contraction since July-September 2001, as the economy grappled with rising fuel and food prices.

[winston]

This Investment Is Dirt-Cheap... And It's Way Off Wall Street's Radar
By Dr. Steve Sjuggerud

If you'd put $10,000 in the investment I'm going to share with you today back on November 1, 1974... four years later, you'd have $26,500.

That's a total profit of 165%! Right now, this investment is the cheapest it's been since November 1974. And it's likely we can get a similar return – 165% in four years – if we buy at these levels.

Even better... this investment has nothing to do with banks, oil, or real estate. It's totally off the Wall Street radar, which is just the way I like it!

I'm talking about Japanese stocks... which you might not have considered before. Let me show you what happened in 1974:

1) The Japanese yen strengthened from 0.33 cents to 0.52 cents in four years – that's 58%.
2) Japan's TOPIX index, a broad measure of the Japanese stock market, went from 259 to 436 – that's 68%.

So $10,000 invested in the TOPIX would have turned into roughly $16,800. And thanks to the soaring yen, when you converted your money back into dollars, you had roughly $26,500.

I covered why the yen should soar recently. It's happening already. So let's take a look at stocks...

The WisdomTree Japan High-Yielding Equity Index follows all the big names in Japan (Toyota, Honda, etc.). And right now, it's actually a better value than the TOPIX index was in November 1974. Back then, Japanese stocks sold for 13 times earnings and yielded 3%. Today, the WisdomTree index trades for 12.4 times earnings. And it pays a dividend of 3%.

As a group, the stocks in the index trade at 1.15 times book value... You can never buy world-class names that close to book value! And the index is simple to own. A fund with the symbol DNL mimics the performance, though you don't capture all the yield.

So today, you can easily buy the biggest names in Japanese stocks – at an even better value than at the stock market bottom of November 1974. Japan has come a long way since then... These names shouldn't be this cheap!

And don't worry... The index doesn't just hold car companies. Biotech and pharmaceutical stocks make up 15%. Boring utilities make up 14%. And if you're nervous about banks and real estate, don't be... Combined, they make up less than 1%.

While you can buy Japan in this fund at the best value since 1974, I'm not ready to "pull the trigger" just yet.

First, if the yen strengthens as much as I expect, that could hurt Japanese exporters (like, well, Toyota and Honda).

Secondly, we don't have our uptrend. Japan's 18-year bear market continues.

Japan could be the buy of the decade... just which decade is the question!

So my readers are waiting on the uptrend. And when we do buy, we won't pick up the big-name exporters like the ones in the WisdomTree index... Instead, we'll go after smaller stocks.

We have two ways to make money here... If the yen goes up or if Japanese stocks go up. If both happen – like they did after November 1974 – you could make extraordinary profits: 165% in four years is what we saw last time around. So keep an eye on Japan...

[ishak]

Japan election on Nov 9?
Parties within Japan's ruling coalition are discussing a plan for a lower house election, said a Japanese daily.
Reuters, Sep 06, 2008

PARTIES within Japan's ruling coalition are discussing a plan for a lower house election on Nov 9, Japanese daily Yomirui Shimbun reported on Saturday.

The Liberal Democratic Party (LDP) and its junior partner, New Komeito Party, see a better chance of garnering more votes if an election is held shortly after the LDP selects its new leader to replace outgoing Prime Minister Yasuo Fukuda on Sept 22, the paper said.

The winner of the race for LDP leadership is assured of becoming prime minister by the virtue of the party's majority in parliament's lower house.

The LDP and New Komeito's plan is for the new prime minister to make a policy speech on Sept 29 at parliament's extraordinary session and answer party representatives' questions from Oct 1-3, the paper said.

Then, the prime minister will dissolve the lower house on either on Oct 3 or 6.

In the race for Japan's next leader, former foreign minister Taro Aso, who now holds the LDP's No. 2 position, is seen as the frontrunner, but faces six would-be rivals, including Economics Minister Kaoru Yosano, a party heavyweight.

Younger LDP lawmakers, such as former defence minister Shigeru Ishiba, has declared their candidacy, but many are struggling to secure backing of 20 lawmakers as stipulated in party rules.

[ishak]

Japan's July current account surplus falls 17.3%
AFP, 10 Sep 2008

Japan's current account surplus in July fell 17.3 per cent from a year ago as the value of imports continued to rise on the back of rising energy prices, the finance ministry said Wednesday.

The account surplus stood at 1.53 trillion yen (US$14.29 billion), the ministry said.

The trade surplus fell 69.8 per cent to 232.2 billion yen, as the value of imports rose 18.9 per cent to a record high 7.06 trillion yen while exports rose 8.7 per cent to 7.29 trillion yen.

Rising energy prices inflated the overall value of imports for the month.

The value of total crude oil imports rose 69.2 per cent to 733.8 billion yen, the value of coal imports more than doubled to 174.0 billion yen, and the value of liquid natural gas imports rose 59.3 per cent to 155.0 billion yen.

Japan has seen prices of general merchandise rise as the prices of raw materials and energy products continue to soar, prompting inflationary worries while the domestic economy remains weak.

[ishak]

Soaring costs hit Japanese economy
AFP, 10 Sep 2008

Japan was hit by more bad economic news on Wednesday as rising energy costs shaved the current account surplus and wholesale prices grew at their fastest pace in nearly three decades.

The data was released as Japan's ruling Liberal Democratic Party launched a race to pick the next prime minister, with the health of the world's second largest economy emerging as the top issue.

With the cost of imports hitting a record high, the current account surplus fell 17.3 per cent in July from a year ago to 1.53 trillion yen (US$14.29 billion ), the finance ministry said.

Analysts said that the figure clouded the prospect of Japan's economy, which contracted in the second quarter, expanding anytime soon.

"Exports are losing lustre as the global economy deteriorates including in US and Europe - and not excluding Asia, which is showing signs it is flagging," Dai-Ichi Life Research Institute senior economist Toshihiro Nagahama told Dow Jones Newswires.

"The weak trend of exports is set to continue with the world's economy expected to worsen even more. Japan's economic weakness is probably here to stay until at least the end of the current fiscal year," he said.

The trade surplus fell 69.8 per cent to 232.2 billion yen. Japan's exports rose 8.7 per cent to 7.29 trillion yen, but imports jumped 18.9 per cent to a record high 7.06 trillion yen, the finance ministry said.

The value of imports was inflated by the rising cost of energy in Japan, which has virtually no fossil fuel resources on its own.

Crude oil imports rose 69.2 per cent to 733.8 billion yen, coal imports more than doubled to 174.0 billion yen and liquid natural gas imports rose 59.3 per cent to 155.0 billion yen.

The raw material prices have also triggered a spike in costs of merchandise for consumers - prompting worries about inflation in an economy that for the past decade had instead been battling against deflation.

Japan's wholesale prices shot up 7.2 per cent in August from a year earlier, growing at the fastest pace in 27 years on higher energy costs, central bank figures showed.

The figure was higher than market expectations of a 7.1 per cent increase but a notch down from a revised 7.3 per cent rise in the previous month, the Bank of Japan said.

It was the fastest-pace increase since an 8.1 per cent rise in January 1981, when the nation was reeling from the second oil crisis, the bank said.

Hirokata Kusaba, senior economist at Mizuho Research Institute, downplayed a recent easing of oil prices. Crude prices rose again Wednesday after the OPEC cartel agreed to cut output.

"While crude oil prices may be currently falling, they are still high compared to year-ago levels, so it will take a while for corporate costs to cool down," Kusaba said.

He warned of the risks to Japan from the shrinking global appetite for its exports - a key driver of the country's recovery from recession in the 1990s.

"Exports are gone as one of the main economic growth drivers," he said.

"Given the corporate sector's situation, salaries, too, are unlikely to rise and boost private spending, so the economy as a whole will continue to be weak," he said.

[millionairemind]

Japan Machine Orders Fall 3.9%, Second Monthly Drop (Update2)
By Jason Clenfield

Sept. 11 (Bloomberg) -- Japanese machinery orders fell for a second month in July, signaling manufacturers expect the global slowdown to crimp demand into next year.

Orders, an indicator of capital spending in the next three to six months, declined 3.9 percent from June, when they slid 2.6 percent, the Cabinet Office said today in Tokyo.

Japan's economy probably shrank last quarter more than initially estimated as business spending fell, the government is expected to report tomorrow. Slowdowns in the U.S. and Europe have taken a toll on Japanese exports, the engine that drove growth over the past six years, while stagnating wages and the worst inflation in a decade have subdued consumer spending.

``Business investment is likely to stay on a downward trend at least through the end of the year,'' said Tomoko Fujii, head of Japan economics and strategy at Bank of America Corp. in Tokyo. ``We need to see an improvement in the U.S. for this to change.''

The yield on Japan's 10-year bond fell 2 basis points to 1.485 percent at 11:36 a.m. in Tokyo. The Topix stock index slid 1.5 percent, and a subindex of machinery makers lost 2 percent.

The median estimate of 35 economists surveyed by Bloomberg News was for a 3.6 percent drop in machinery orders.

From a year earlier, orders decreased 4.7 percent, the first decline in four months, the Cabinet Office said. The value of orders placed from abroad, a figure excluded from the headline number, declined to the lowest level in two years.

Impact of Slowdown

That ``suggests that the slowdown in the global economy is starting to have a material impact on the machinery sector,'' said Hiroshi Shiraishi, an economist at Lehman Brothers Holdings Inc. in Tokyo.

Kubota Corp., the world's biggest maker of mini excavators, said last month it will cut production because of slowing demand from the U.S. and Europe. Tokyo Electron Ltd., Japan's largest maker of semiconductor equipment, lowered its full-year profit forecast by 40 percent last month after weakening demand for personal computers prompted chipmakers to postpone spending plans.

``Companies are very cautious in a recessionary environment and I don't think they're bold enough to anticipate a quick profit recovery,'' said Fujii at Bank of America.

Spending, Profits

Businesses reduced spending on factories and equipment for a fifth quarter in the three months ended June 30, the Finance Ministry said last week. Record costs for oil and raw materials caused profits to decline for the fourth consecutive quarter.

The government will use the capital spending figures to revise second-quarter gross domestic product tomorrow. The economy contracted an annualized 3.1 percent, more than the 2.4 percent reported last month, according to economists surveyed.

Still, economists say the current slowdown is unlikely to be as severe as the last recession, which lasted from December 2000 to January 2002. The economy is more resilient because companies have shed the excess workers, factory lines and debt that contributed to a decade of stagnation in the 1990s.

``In the old days external shocks tended to get amplified,'' said Seiji Shiraishi, chief Japan economist at HSBC Securities Ltd. in Tokyo. ``But this time around, without the three excesses, the downside risks are limited.''

Japan Is Unique

The world's second-largest economy may also benefit more than others from declining oil prices, according to Julian Jessop, who says Japan is unique in having escaped the credit crunch and the housing collapse that's hit the U.S. and Europe. Crude has eased 29 percent since reaching a record in July.

``That's going to relieve a lot of cost pressures,'' said Jessop, chief international economist at Capital Economics Ltd. in London. ``I'm convinced the Japanese economy will be one of the first to recover as the global inflation shock fades.''

Other economists say oil's decline reflects weakening demand and slower growth in the emerging markets that have helped Japanese companies weather the U.S. slowdown. In China, which in July passed the U.S. as Japan's biggest export customer, economic expansion has cooled for four quarters.

``You can't rescue the world economy just with lower oil prices,'' said Martin Schulz, senior economist at a research arm of Fujitsu Ltd., Japan's biggest computer services company. ``Asia has to correct quite a bit and that's an important market for Japan.''

[millionairemind]

Japan Economy Shrank Annual 3%, Revised Figures Show (Update2)

By Jason Clenfield

Sept. 12 (Bloomberg) -- Japan's economy contracted more than the government initially estimated last quarter after figures showed businesses cut spending.

Gross domestic product shrank an annualized 3 percent in the three months ended June 30, the Cabinet Office said today, more than the 2.4 percent drop reported last month. The median estimate of 27 economists surveyed by Bloomberg News was for a 3.1 percent contraction.

Fully story
http://www.bloomberg.com/apps/news?pid= ... refer=home

[ishak]

BOJ keeps rates on hold, says economy still sluggish
Reuters, 17 Sep 2008

The Bank of Japan (BOJ) kept interest rates unchanged on Wednesday and maintained its assessment on the economy, which it said was still sluggish.

In a widely expected move, the central maintained its overnight call rate target at 0.5 per cent by a unanimous vote.

'Tensions in global financial markets have increased and there are downside risks to the world economy,' the BOJ said.

'While Japan's money market has been functioning well, the bank will continue to strive to ensure smooth settlement of funds and maintain market stability taking into account the recent developments among US financial institutions and their impact.'

BOJ Governor Masaaki Shirakawa will hold an embargoed news conference later in the day, with his comments expected to come out some time after 4.15pm (0715 GMT).

The nine-member board currently has two vacancies, including one for a deputy governor.

[millionairemind]

Sep 24, 2008
BoJ pumps $20b into market

TOKYO - JAPAN'S central bank on Wednesday injected 1.5 trillion yen (S$20.1 billion) into the Tokyo money market as worries about a US financial rescue plan sparked fresh turmoil on global bourses.
The Bank of Japan pumped emergency funds into the financial system for a sixth consecutive business day as Tokyo share prices slide on growing jitters about US political wrangling over a US financial bailout.

The BoJ is one of six major central banks that pledged last week to coordinate monetary action to ensure a flow of liquidity after the collapse of US investment giant Lehman Brothers. -- AFP