Japan car makers stunned by Brexit

25060445_-xlargeMany business leaders are stunned by the outcome of the referendum in which the people of the United Kingdom voted to leave the European Union. There could be a big impact on the Japanese automotive companies which have factories in the UK such as Toyota, Honda and Nissan.

They may move some or all of their operations to other parts of Europe. The Financial Times said that there is a 75 % chance that Toyota and Honda will cease manufacturing in the UK if the EU imposes an import levy on cars manufactured in Britain and sold in Europe. The Nikkei says that Toyota predicts that this tariff will be 10 %, affecting both profits and sales. Toyota, which has a major factory in Derbyshire, is unlikely to use the UK as the location to build its new hybrid vehicles, according to the Times.

The Times also reported that Nissan, which employs 7,000 people in the North East of England, is under pressure form its partner Renault to move some operations to France. It says this could affect the development of the Nissan Leaf battery-driven car.

The Wall Street Journal said that Nomura Securities has downgraded its profit estimate for the seven major Japanese auto makers following the Brexit. Yet Nomura analyst Masataka Kunugimoto does not expect a bitter trade war between Britain and Europe: “We think the risk is relatively small given the high volume of automobile trading between the UK and the EU and the negative impact for both sides from higher tariffs.”

Since the Brexit, the pound has fallen and the yen has risen. The yen is up around 30 percent against the pound compared to a year ago. The fall in sterling makes exports from the UK cheaper, which is a potential benefit for UK-based manufacturers. However, many investors moved money from the pound into so-called safe haven currencies, including Japanese Yen. A strong yen is seen as a problem for Japanese exporters, including automotive firms.

“Sterling’s depreciation will make exports more competitive so will boost sales and hence production in the UK,” Professor David Bailey of Aston University, told the Daily Telegraph. “But it will also increase the cost of importing components and about 60% of the parts going into the UK-assembled cars are imported.”

Professor Bailey also warned about the impact on the car industry of an end to the free movement of labour between the EU and Britain – one of the demands of the leave campaigners in the referendum. He said: “The car industry in the UK has 30,000 vacancies and needs to be able to hire skilled workers from Europe.”

Mass protests against US presence in Japan

300AC611-16E8-4620-AB13-4B361A1FD3F2_cx0_cy6_cw0_w987_r1_s_r1Tens of thousands of people have taken part in angry protests against the American military presence in Japan.

Meanwhile, a Russian delegation has been welcomed to Tokyo to try to break the deadlock which has blocked a formal peace treaty between Russia and Japan since the end of World War II.

It was soon after Japan’s defeat in the War that America began to use Japan as a military base.

Nearly 30,000 of the 47,000 US troops stationed in Japan are on the small tropical island Okinawa. Even though they contribute to the economy, their presence there has long been resented by locals.

The anger intensified after a former US Marine was arrested in connection with the death of a local woman in May.

Last weekend, more than 65,000 people demonstrated on Okinawa against the U.S. military presence. A few days later, 7,000 people demonstrated near the parliament building in Tokyo.

The Japanese government knows the Okinawa base is unpopular but feels it has little choice to accept it. In return for its big military presence in Japan, the United States promises to protect its ally against aggression.

Recently the defence links with America were strengthened when Prime Minister Shinzo Abe brought in new security laws which commit Japanese forces to defending its military allies, including the United States.

These laws, which seem to stretch the concept of pacifism enshrined in Japan’s constitution, are unpopular; studies show that more than half of Japan’s population is opposed to them.

However, the need for defence was reinforced by more missile launches by North Korea this week.

Japan’s Defence Minister General Nakatani responded by saying the threat to Japan is intensifying.

Official media reported North Korea’s leader Kim Jong Un as saying “We have the sure capability to attack in an overall and practical way the Americans in the Pacific operation theatre.”

In the face of such belligerence, Japan wishes to keep the peace with neighbouring countries where it can.

Japan and South Korea recently agreed to expand an emergency communication system between their defence ministries, including a new direct line between their defence ministers.

Japan is also seeking closer military ties with Vietnam, Indonesia and other nations surrounding the South China Sea.

It complicates things that South Korea, Russia and China have territorial disputes with Japan over certain islands and territory.

But with North Korea increasing the pressure and anti-American feelings running high, Japanese diplomats are working hard to prevent its neighbours from becoming enemies.

Media storm sweeps Tokyo governor out of power

The resignation of one of Japan’s most famous politicians has shown the power of a weekly gossip magazine called Shukan Bunshun.

The governor of Tokyo, Yoichi Masuzoe, quit after an expenses scandal was revealed in the magazine, which specialises in stories about the shady side of powerful people.

The magazine specialises in stories about well-known figures; the more scandalous the better. Its reporters deny it pays money for information.

In a country where most people are very respectful towards privacy and hierarchy, the reporters from the weekly magazine break the rules to get the stories.

Although most people say they do not believe all the articles in magazines like Shukan Bunshun, journalists from other media repeated its allegations about Mr Masuzoe in the newspapers and on TV.

Social media outlets also distributed the gossip.

The allegations against Mr Masuzoe were published in the magazine in April. They included claims that he used his political expenses to pay for private stays in hotels, meals and works of art.

Mr Masuzoe said that there were some mistakes in the way the money was accounted for but he insisted that all the spending was reasonable.

Nevertheless, a media storm built up and just before he quit, opinion polls showed a disapproval rating of 97 per cent for the governor.

This is the third time this year that a scandal revealed by Shukan Bunshun has led to a resignation.

Firstly, the Economy Minister Akira Amari stepped down after allegations of corruption.

A few weeks later, the magazine reported that a member of the Diet (Japan’s parliament) called Kensuke Miyazaki was having an extramarital affair days before his wife gave birth. That ruined his image as a caring family man.

Mr Amari and Mr Miyazaki were little known outside Japan but Mr Masuzoe was a high profile figure so his resignation was big news internationally.

Some of the articles were quite judgemental. The Daily Telegraph noted “a perception of arrogance and entitlement on the part of the governor.”

That is quite different to the impression I received when I went to a meeting with Mr Masuzoe in London last year; I was impressed by his excellent English and his sense of fun.

However, the governor’s foreign trips – like the one to London – were expensive, as he flew first class and took his staff on business class.

The Japan Times said that nine business trips abroad cost more than ¥200 million.

Mr Masuzoe’s energy and fun appealed to voters in Tokyo. People also hoped that he would be reliable and honest – especially because the previous governor of Tokyo stepped down because of a scandal in 2013. Mr Masuzoe had been a vocal critic of “money politics” on national TV and other media. He had cultivated a clean image as a university professor

Political resignations do not help the image of Japan. Foreign readers get the impression that widespread corruption is a characteristic of Japanese politics.

But it is worth remembering that everyone’s opinions on Mr Masuzoe were based on an article in the Shukan Bunshun – a magazine which regularly smashes through the politeness and respect which lie on the surface of Japanese society.

Chinese warship raises the fear level in Japan

China has been harshly criticised again by the Japanese government, reinforcing the negative impression of China that is widely held in Japan.

The Japanese criticism came after a Chinese navy warship  sailed close to a group of islands in the seas between the two countries.

These islands, known as Senkaku in Japan and the Diaoyu in China, have long been a source of dispute.

“We are worried that this action raises tensions to a higher level,” Japan’s Chief Cabinet Secretary Yoshihide Suga told a press briefing in Tokyo.

Any confrontation between China and Japan over the islands receives a great deal of media attention in Japan, mainly due to fears that it could lead to an armed conflict.

As the story spreads worldwide via agencies such as Jiji Press, it suggests to an international audience that the tension between Japan and China is rising to a dangerous level.

The Chinese media also fans the flames of fear. According to CBS, stories about China’s claim to territorial rights in the seas off the coast of Japan have flooded Chinese state television recently.

As well as the arguments about territory, Japan and China often still clash over their interpretations of the history of the 20th Century.

China continues to criticise Japan for its imperial past even though the Japanese feel that they have repented and apologised.

Japanese people often feel that China exploits historical tragedies for its own political purposes, especially to validate the Chinese Communist party.

This week, there was a stark reminder of the war. A Japanese company that used Chinese forced labour in its coal mines during the Second World War agreed to compensate and apologise to thousands of victims and their families.

Mitsubishi Materials, one of dozens of Japanese companies that used labourers from China and the Korean peninsula, said it would pay 100,000 yuan (US$15,000) to each of the surviving victims and the families of those who died.

Despite problems stemming from history and territorial disputes, at a business level, the links between China and Japan are strong. A record number of Chinese tourists are visiting Japan at the moment and have been celebrated for their extravagant shopping habits.

The Japan Times this week published a story about the warm personal links between people who take part in a Chinese language exchange in Tokyo every Sunday afternoon.

“Most Japanese citizens are friendly – they oppose war,” said Hu Ziyun a young Chinese student who went to the event. He said that the impression he got from chatting with his Japanese friends is different to the impression he receives from Chinese television.

The paper also spoke to Duan Yuezhong, a Chinese person who has lived in Japan a long time: “Most of the two countries’ people usually pick up information about each other from the media, which leads to distrust because it does not reflect the reality,” he said.