Hokusai prompts great wave of admiration

The admiration in the West for the classic works of Japanese art shows strongly in the critics’ response to a new exhibition at the British Museum by Katushika Hokusai. Nearly all the newspapers have published enthusiastic reviews. Many writers have noted the way Hokusai’s work influenced European painters, especially the French Impressionists, and they hold him up as one of the world’s great eccentric, creative minds.

Some critics attempt to explain the context in which Hokusai worked in Edo period Japan, when the country was largely closed off from outside influence. For example, John T Carpenter, Curator of Japanese Art at The Metropolitan Museum of Art in New York, suggested in a lecture at the British Museum that Hokusai’s most celebrated painting, The Great Wave, could imply a fear of a malevolent foreign force threatening the relative safety of the islands of Japan and its sacred mountain, Mount Fuji.

Hokusai lived from 1760 to 1849 and many of his best works were completed in his old age. He died at the age of 89 at a time when average life expectancy for a man in Japan was the late forties.

The Spectator magazine claims that on his deathbed, Hokusai, attended by his doctor, said a prayer. ‘If heaven will extend my life by ten more years… then I’ll manage to become a true artist.’

Hokusai produced a great range of work, from a whimsical picture of chicks to be sent as a greeting card to bloodthirsty images of war and religion.

The Guardian’s critic John-Paul Stonard says Hokusai was a thoroughly commercial artist, relying on a large turnover of sales of his low-cost prints and the many illustrated books he produced throughout his life. Despite his success, he seems to have been permanently on the brink of bankruptcy, largely a result of financial ineptness.

The historian Simon Schama in the Financial Times shows apparent disdain for the customers who bought Hokusai’s pictures: “To keep out of mischief, the nobility was required to stay in Edo,” he writes. “Inevitably, as at Versailles, an emasculated, over-dressed, politically pointless class compensated for its impotence with stupendous, conspicuous consumption.”

I flinched when I read that description. I study the way in which the international media covers Japan and I have found it to be depressingly common for foreign writers to contrast the supposed frailty and impotence of Japanese men with the erotic allure of Japanese women. I believe it forms part of a narrative by which Westerners emasculate Japanese men and imply that virile, sophisticated foreigners are superior.

Nevertheless, I wouldn’t want Simon Schama’s remarks about the decadence of Edo to put anyone off from seeing this wonderful show and drawing their own conclusions about culture and gender.

I agree with the case the Daily Mail makes for the exhibition: “This is a simply joyous experience, an introduction to one of the greatest of all artists at his most liberated.  Try to find a quiet morning – many of the exhibits reward patient attention to detail – but go.”

China and Japan’s crucial role in Africa

The government of Japan strongly encourages trade with Africa. However, the World Bank warns that a slowdown in parts of the region could hamper investor confidence. Furthermore, with China firmly entrenched in many African countries, Japan faces stiff competition.

From Nairobi, Kenya, Duncan Bartlett reports.

Many busses which carry passengers around Nairobi resemble four-wheeled nightclubs. Lights flash, music blares, and passengers try to sing and dance, despite being squeezed tightly into their seats.
The buses are known as matatu in Swahili. They are often painted in bright colours—orange, purple, and red—and are decorated with pictures of icons from pop music, football, or religion; Bob Marley, Renaldo, and Jesus. The paint is supplied by Sadolin, a company which was bought by Japan’s Kansai Paints in February 2017.

Like other companies on the expansion trail, Kansai Paint has used the support of experienced Japanese government officials, who smooth the path for businesses abroad. “Japanese companies are often shy about entering new markets, so we show them how to do business here,” said Natsuhiko Naoe, who represents the Japan External Trade Organisation, Jetro, in Nairobi.

Government push

On a visit to Kenya in 2016, Japan’s Prime Minister Shinzo Abe said, “We have a feeling in our gut that, in Africa, where possibilities abound, Japan can grow vigorously.”

Mr. Abe pledged that Japan would invest US$30 billion. A key goal is to bring electricity to three million homes by 2022, through investments in hydro, solar, gas, and geothermal projects. Unfortunately, Mr. Abe’s announcement coincided with a major economic setback. In 2016, sub-Saharan Africa’s economic growth declined sharply. The region’s three largest economies—Angola, Nigeria, and South Africa—were all badly affected and the World Bank predicts only a modest rebound in 2017.
However, with 55 countries in total, Africa presents a mixed picture. In 2016, for example, Cote d’Ivoire was a stellar performer with a GDP growth of 8.2%.

Competition with China

Japan is not the only Asian country expanding its presence in Africa. China has hailed Africa as “golden ground” and has extensively invested in oil-producing countries such as Nigeria and Angola. China also owns most of the copper mines in Zambia. However, the recent sharp fall in commodity prices and a rise in wages have prompted it to scale back its investments.

Japan and China compete for some contracts relating to natural resources, such as oil, copper and liquefied natural gas. When they go head-to-head, the Chinese government throws its full weight behind the bidding process and provides concessional financing through the China Development Bank and other state-owned enterprises. Japan’s response can seem slow and timid, partly because it is decided through a complex bureaucracy.

China’s golden ground

Chinese regards Africa as a vital source of essential commodities, such as oil, gas, and copper. Chinese companies also see Africa as an important market for their goods. Chinese motorbikes, rice cookers, and flat-screen TVs are popular with Africa’s growing middle class.

Some of China’s projects are on a vast scale. In Kenya, it is funding a US$4-billion railway, and Nigeria’s President Muhammadu Buhari is seeking a loan of $6 billion from the Export-Import Bank of China for its railway projects.

China often brings its own construction workers to Africa to join local teams. The Africans welcome the investment but are sometimes wary of the Chinese workers who live in compounds separated from the local community. “Are they prisoners?”one Kenyan woman asked me.

Political rivalry

The political rivalry between China and Japan can also be felt in Africa. Japan aspires to become a permanent member of the UN Security Council and its diplomats encourage African nations to vote in favour of its bid. China opposes Japan’s plan and wants the Africans to vote against it. This can lead to tense situations in which politicians are pressed to decide which East Asian country they most favour, as though choosing between rival suitors.

In business terms, the Japanese government and commercial banks offer sophisticated deals to fund power, telecoms, and transportation projects.

Jonathan Bell, editor-in-chief at Trade & Export Finance (TXF Media) in London said: “Japanese corporations are increasingly active in Africa and they are backed by export credit support from government agencies such as JBIC and NEXI. Their advantage over some of the Chinese competitors is that they also have support from strong commercial banks such as MUFG and SMBC, which are looking to expand in Africa. Some African governments are pleased to work with the Japanese because they don’t want to be over-reliant on the Chinese.”
However, the two Asian countries are not always rivals. “China is a strong competitor but sometimes we can collaborate,” one Japanese official, who is based in Africa, told me. “They can construct the roads and we can make the cars.”

Duncan Bartlett is a former BBC Business Reporter and founder of Japan Story. The full version of this article is published on the website, Japan Forward.


The Olympic magic of Japan’s “Oriental Witches”

The largest ever TV audience in Japan was for the Witches of the Orient (東洋の魔女  toyo no majo), a female volleyball team which bewitched the country in 1964. That was the year that Tokyo hosted the Olympic Games – an important milestone on Japan’s journey from defeat to its post-War economic boom. The Witches’ story was told by Professor Helen Macnaughtan at SOAS, part of London University, at an event entitled Sport & Diplomacy. The Professor explained that many Japanese people bought colour television sets so they could watch the Olympics and this helped stimulate the electronics industry and the economy. There was great delight when the volleyball team won a gold medal. However, viewers were not just excited by the sport; they were also intrigued by the relationship between team captain Masae Kasai and her strict coach Hirobumi Daimatsu, known as The Ogre. Professor Macnaughtan said the surviving members of the volleyball team do not mind being remembered as The Witches, as it has become a term of affection and respect. Later, Mama San Volleyball was used to describe the sport’s popularity among women following the games.

When Japan hosts the next Olympics in 2020, one of its goals is to encourage more girls and women to take part in sport, according to the Director General of the Japan Sports Agency, Tetsuya Kimura. He told the meeting at SOAS that inclusion and diversity are key to its success. He showed a photograph of female volleyball players in Cambodia. They were leaping in the air on a patch of ground which had previously been planted with landmines. Volunteers from Japan had helped to clear the mines and then encouraged the local girls to take up the sport. It was a powerful image of the positive impact Japan hopes to achieve through the Olympics. Perhaps the magical influence of The Witches lingers on.

Will an Improbable deal prove a winner for Japan?

Why has the Japanese company Softbank invested a big sum of money in a British company which has not yet made a profit?

That’s the question raised by Softbank’s deal with a young tech firm which creates virtual worlds on computers. It is called Improbable and rather improbably for a firm with no disclosed income, it has announced a deal with Softbank worth around 500 million dollars.

Softbank, which is not a bank but a huge tech and telecoms conglomerate, will gain a stake in Improbable but not a controlling stake. Softbank’s Managing Director Deep Nishar is joining the Improbable board.

A person close to the deal told me that Softbank shares a vision with Improbable about how its technology can be shared globally. Softbank’s chief executive, Masayoshi Son, loves to invest in companies which share his exciting dreams for the future.

Softbank has been operating a $100bn Vision Fund out of London, backed with money from the Saudi government as well as Apple. The Improbable deal is not part of that fund, but could be offered to its investors.

Some commentators have complained that this sounds like another British company selling out to foreigners. The BBC’s Rory Cellan-Jones wrote: “Time and again, we hear the same lament: that Britain has great universities turning out lots of clever start-up technology firms, but we lack the ambition to stay the course.”

Nevertheless, Japanese investment in the UK is welcome during the Brexit negotiations. David Rowan, the editor of the tech magazine Wired told the Financial Times: “the influx of large-scale funding from respected out-of-Europe investors will be a huge boost to the tech sector’s confidence.”

Last year Softbank bought the British chip designer Arm Holdings for 24 billion pounds. That deal came very soon after Britain’s vote to leave the European Union. Quietly, a few months later, Softbank sold 25 percent of its stake in Arm.

Another deal involving Softbank does not come as a huge surprise. Last week, I reported in my blog that a senior banker in the City of London told me that Japan’s companies have billions of dollars to spend and are “very much up for it” when it comes to buying foreign businesses.

Macron puts France back in fashion for Japan

There has been an affectionate relationship between France and Japan for a long time. It began in the mid-19th Century, when Japanese art treasures reached Paris, providing inspiration for painters such as Edouard Manet and Edgar Degas. The French still use the word Japonisme to describe their deep appreciation of Japan’s culture. In return, the Japanese hold France’s achievements in fashion and food in high regard. They have a special place in their hearts for its exquisite patisseries.

Investors’ decisions are rarely sweetened by sentiment yet on the markets, France is currently back in fashion. Investors hope that the president-elect Emmanuel Macron will strengthen the French economy and many international traders share his vision of France at the heart of the European Union.

Mr Macron has promised to reduce the fiscal deficit to below three percent as soon as possible. That would please the creditors which hold French debt in the form of bonds, such as Japanese banks. Many bond traders pulled their money out of France when it seemed there was a chance the election could result in a victory for Mr Macron’s rival, the nationalist Marine Le Pen. However, in a sign of post-election relief, the ten-year yield on French bonds has returned to a rate not since late last year, signaling that the risk of political turbulence, or even debt default, has dissipated.

In theory, a free trade agreement between Japan and the EU is more likely under Mr Macron than under Ms Le Pen. However, it requires support across the EU, not just in France. Another challenge for Mr Macron is his low support within the French National Assembly. His party, En Marche, was only formed 13 months ago and this constrains his ability to push controversial trade legislation through the French parliament.

Britain supported a free trade deal between Japan and the EU but the UK’s influence on the EU’s policy disappeared with the Brexit vote last year. Since then, France has been trying to lure financial jobs from London. It hopes to attract 20,000 workers to Paris; people who work in Japanese banks are among those being courted.

The banks’ decisions on where to locate depends partly on the prospects for departments which clear euro-denominated instruments, such as derivatives. Much of this trade currently takes place in the City of London. However, the European Commission is considering a curb on euro clearing outside the EU. If it does decide to put a block on that trade in London, it could have a big impact on the Japanese banks located in Britain.

Japan’s big money is still on the table

Japan’s companies have billions of dollars to spend and are “very much up for it” when it comes to buying foreign businesses.

That was the message I heard this week from a senior figure based in the City of London who regularly brokers huge international deals.

I also learned that Japanese companies have made many recent acquisitions, each worth than a billion dollars, in the United States and are prepared to buy more American companies, if Donald Trump allows.

I gained these useful insights at a conference at the London Stock Exchange organised by Skadden, an international law firm. (The organisers have asked me not to name the conference speakers in my blog but I am free to share what they said.)

I received the strong impression that Japan still seeks big M&A deals, despite a perception of risk in the UK, the EU and the United States.

Naturally, the Brexit affects the way Japan sees the United Kingdom.

A high level representative of the Japanese government said he is disappointed that Britain is no longer the gateway to the EU. In the past, he said, Britain pressed Europe to trade more with Japan but Britain’s influence on EU policy disappeared following the Brexit vote. However, a cheap pound could make British companies appear good value for money to Japanese buyers.

One British businessman said he thought that the Japanese are “in denial” about the Brexit. “They know in their heads it’s going to happen,” he said. “But they don’t seem to believe it in their hearts.”

There is also “a general increase in nervousness” about Europe, according to the senior banker I mentioned at the start of this blog. However, he reminded us that last year the Japanese company Sumitomo spent 750 million Euros buying the banana company Fyffes, which is based in Ireland, part of the EU.

So what about the investment climate in the United States under Mr Trump’s administration? In his inaugural address Mr Trump said American institutions must not be bought by foreigners and “asset stripped.” Does that make him protectionist and anti-Japanese?

The American experts at the conference said Mr Trump’s views on company takeovers and corporation tax remain ambiguous, although they praised him for creating “a business-friendly environment.”

“One of Trump’s consistent themes is jobs,” said a speaker. “If he thinks a deal will create American jobs, he will go for it,” he said.

Japanese companies are interested in expanding their international operations because of weak economic growth at home (although that is now picking up according to this very insightful article in the Financial Times).

The panellists said the companies which are most attractive to Japanese buyers include those involved in pharmaceuticals, the financial sector and healthcare. However, they held back from naming any companies which they believe are currently potential takeover targets for the Japanese. It is always risky to name such names – especially at a conference organised by lawyers in the middle of a stock exchange!