Mother, father, baby and work

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Most Japanese men expect to gain more money and status the longer they stay with their company. By the time they reach their forties or fifties, they expect to become managers and earn considerably more than they did when they joined their company in their twenties.

That was the system which was common throughout corporate Japan during its rapid growth period from the 1960s until the 1980s. Yet this seniority based-management culture is being challenged. One of its critics is Professor Seijiro Takeshita from Shizuoka University who complains that it creates “stagnation” within Japanese corporate culture. He wants the seniority based-management culture to be replaced with a meritocracy-based system and a fresh approach towards promotion.

“We need to reward people for taking risks,” said Professor Takeshita, “and not punish them for failure.”

Professor Takeshita and other critics claim that older, long-serving employees are unlikely to embrace change and seek new opportunities. He argues that this corporate conservatism is likely to become stronger as Japan’s working population grows older but says it is not a good characteristic to have when Japan is competing against other more youthful Asian countries for business.

Another issue with is that the high rates of pay rarely go to people who have young children. Yet it is families with young children who may require the most financial support. One of the big challenges for Japan is how to create an environment in which more people are prepared to have children and offset the falling birth rate.

One radical suggestion for encouraging people to start families has been put forward by Kaori Sasaki, the founder and chief executive of ewoman, who said that companies should offer “automatic promotions” to men who take paternity leave in order to look after young children. “Men do not take paternity leave because they fear their careers will suffer. If we promote those that do, then the circumstances will change,” she said.

Although the idea has appeal, it is hard to imagine that it would ever be implemented by any Japanese corporation. Rather more importantly, women who want to take maternity leave need assurances that their careers will not suffer as a result of having children and also that they will be able to access child care when they need it so that they continue working and raising a family at the same time.

Nissan warns of consequences of hard Brexit

ghosnThe boss of one of Japan’s major businesses has warned about the consequences of a so-called hard Brexit as Britain leaves the European Union.

Carlos Ghosn, the CEO of the car-manufacturer Nissan, said his company would need compensation for tariffs which could result from the change.

It was suggested by a BBC reporter that the tariff on cars exported from Britain to Europe could be ten percent.

Mr Ghosn responded by saying that would “without any doubt” have a harmful impact on Nissan’s factory in Sunderland.

Such high tariffs would also be a problem for all the Japanese companies which have manufacturing facilities in the UK.

Some of them might move their factories to other parts of Europe, as Japan Tobacco did several years ago.

However, the post-Brexit tariff of ten percent tariff which was suggested in the BBC interview was only speculation. It is not known at what level the tariffs will be set, as the negotiation process has not yet started.

Like the Japanese companies based in the UK, the British government wants any tariffs to be as low as possible. However, the level will be set not by Britain but by the European Union.

This week, I attended a meeting about the Brexit, along with about two hundred Japanese business people at the Japanese Embassy in London. We heard a speech by the British Trade Minister Lord Price.

He said that the UK government’s goal is a smooth transition to life outside the EU, with low tariffs and continued trade with Europe.

He also said the UK government is supportive of Japan reaching a free trade deal with the European Union.

When asked about the so-called hard Brexit, Lord Price said: “I think it’s just a phrase designed to illustrate an extreme point of view.”

Yet he also said there are a range of views within the government about how the Brexit should work. On immigration, for example, ministers have various opinions.

That is a concern for Japanese companies in the UK, who want consistency on immigration law and access to well-qualified, international staff.

Lord Price said that Japan is the largest Asian investor in the UK, and its investment in Britain is higher than that of China.

I asked him if there’s been a shift in the UK government relationship with China and Japan since Theresa May became Prime Minister. He denied this.

He also said he is looking forward to holding talks with Japanese business leaders in Tokyo later this month.

Does Japan have a deeply embedded gender bias?

p10-lotl-a-20160929-870x561Does Japan really have a deeply embedded gender bias?

That was the claim in the headline over an opinion piece about politics in the Japan Times by a foreign, male professor from a law school in Kyoto.

Gender was also discussed in a report about attitudes to sex and, quite separately, in the context of a puzzling TV advert in which a woman turns into an eel.

Foreigners are generally curious about the nature of relationships in Japan. In the media, journalists tend to highlight complaints of sexism or “a deeply engendered gender bias”. However, these views are less common within the Japanese press.

In his piece of the Japan Times, Professor Colin Jones discussed Renho, the leader of the Opposition. Her father is Taiwanese and her mother is Japanese. This led to a debate over whether she could stand for parliament. Professor Jones believes it would not have been an issue if Renho had a Japanese father. He says Renho’s case “thus offers a stark illustration of the deeply rooted structural impediments faced by women in Japan even today.”

In fact, the controversy appears to have been settled and Renho now attracts a lot of respect as Japan’s first female leader of the opposition. Of course, the hard won success of prominent female leaders does not indicate that gender discrimination has vanished but it partly explains why gender is such an issue for the media.

Away from politics, there was widespread interest in a story which showed Japanese young men in a rather negative way. The sex survey  claimed that about 40% of young single men and women have never had sex – a phenomenon that is being blamed for the low birth rate in Japan.

The Guardian reminded its readers that the study is one of several in recent years that portray Japan as a country with a collective loss of interest in sex. It was the theme of a prurient 2013 BBC documentary No Sex, Please, We’re Japanese.

But the Guardian suggested such claims are exaggerated and misleading.

Another story which was shared on social media was about a TV advertisement in which a Japanese girl turns into an eel. This ad was designed to promote ethical farming.

Many websites claimed – without much evidence – that it was “withdrawn for being sexist”. Yet the community which discussed it on Japan Today generally felt that it was unlikely to have been seen as sexist by its Japanese viewers. Many of them found it rather charming.

“Keep borrowing money – it makes no sense not to!”

That would have been a suitable headline over an opinion piece in the Japan Times concerning economic and monetary and policy.

The newspaper said “excessive debt is always a concern” but it went on to encourage more government borrowing. “It makes no sense not to borrow when interest rates are this low,” it said. “Central bankers have done their part, it’s up to politicians to do theirs.”

The paper was responding to this week’s monetary policy meeting of the Bank of Japan. There was no headline-grabbing change to come out of the meeting. But the international media concluded the most significant point is that the Bank plans to keep its key interest rate in negative territory at -0.1%, for the time being. In addition to keeping short-term rates at -0.1%, the bank said it will also keep long-term rates, specifically the yield on ten-year government bonds, at about zero for the foreseeable future.

In its analysis, the Economist said the BOJ policies have “not only lowered interest rates, they have also flattened them.”

The Bank of Japan’s goal is to create an environment in which inflation can climb to two percent. It will therefore continue its costly QE programme through its purchase of government bonds. As I explained in last week’s blog, the bank has a serious credibility problem unless its goal is achieved.

The Bank of Japan’s policies are similar to those of the European Central Bank, which also has super-low rates and a QE programme. By contrast, the United States Federal Reserve is ready to raise rates. It had hoped to do so earlier this year but held back because of several factors, including uncertainty over the outcome of the US election.

Andrew Wilson, the CEO of Goldman Sachs Global Asset Management told the BBC: “I think this potential rate cut by the US Federal Reserve is well discounted by the markets. Other central banks are going in the opposite direction, so I don’t think it will have a broad global impact.

“At the same time as the Fed is moving interest rates up, the amount of liquidity created by the Bank of Japan and the European Central Bank will, we think, keep global interest rates at a relatively low level for a prolonged period.”

Although the Bank of Japan’s goal of reaching, or even surpassing, the two percent inflation target seems implausibly ambitious, it is hard to imagine that things could have been better had it done nothing.

Bank of Japan faces credibility crisis Bank of Japan has a crisis of credibility, according to the Financial Times.

The tactics it is using to try to invigorate Japan’s economy are not yet working and it has made a promise which seems impossible to meet.

For that reason, trust in the Bank and its governor Haruhiko Kuroda is undermined both within Japan and abroad.

The promise the Bank has made is to raise Japan’s inflation rate to two percent “within a couple of years.” A former policy maker at the bank, Sayuri Shirai, has pointed out that Japan has not had inflation rate that high for more than two decades. She believes it is time to cut the inflation target to one percent.

The methods by which the Bank of Japan is trying to create inflation include a negative basic interest rate of -0.1%. This effectively charges banks money to keep their cash in the system and is designed to prompt them into lending more to consumers and businesses. However, Forbes Asia claims the policy discourages lending.

There is speculation that the negative interest could soon be increased from -0.1% percent to -0.2%. An announcement is due following the Bank’s policy meeting on September 21st.

The negative interest rate is unwelcome for savers who have put their money into the banks, many of whom are old people. Japan has one of the highest savings rates in the world.

The negative rate is not the most expensive of the Bank of Japan’s policies. It is currently buying ¥80 trillion ($780 billion) worth of Japanese government bonds a year.

This policy, sometimes known as quantitative easing, is designed to flood money into the system; “printing money” is the way journalists sometimes refer to it. Yet it adds to the mountain of debt the government must face in the future. It also interrupts the system by which the government uses banks to fund its borrowing.

For most people, huge numbers and jargon make it difficult to grasp complex monetary policy. Yet everyone can see the targets of higher inflation and sustained economic growth are not yet being met.

This undermines credibility of the Japanese Prime Minister Shinzo Abe who is working closely with the Bank of Japan.
If people lose trust in both the government and the central bank it creates an environment of cynicism. Of course, Japan is not the only country to struggle to respond to the economic disruption following the 2008 financial crisis.

Yet other countries will not wish to copy Japan’s policies if they leave a trail of broken promises and distrust.

North Korea “playing with fire” with missile launches

Unknown-20The North Korean leader Kim Jong Un has called on his army to press ahead with its nuclear weapons programme. His statement came after North Korea fired three ballistic missiles into the Sea of Japan this week.

Japan’s prime minister Shinzo Abe called the missile launch “an act of indescribable violence.”

North Korea tested a nuclear device earlier this year and it now aims to miniaturise nuclear weapons so that they can be attached to missiles, according to Professor Kihl-Jae Ryoo from the University of North Korean Studies in Seoul.
He was the minister for Unification for South Korea between 2013 and 2015.

Professor Ryoo was speaking on the record at Chatham House in London this week. He described the current situation as “explosive” and said that Kim Jong Un is “like a child playing with fire that could ignite at any time.”

He said that the threats from North Korea are now as strong as they were at the height of the Cold War. He said Kim Jung Un’s goal is to consolidate his power and to differentiate his leadership from that his father, Kim Jong-Il who died in 2011.

Professor Ryoo said that while he supported UN sanctions, North Korea has endured sanctions for many years without much impact on its regime.

The professor added that although there is some evidence that the economic situation is improving around Pyongyang, rural parts of the country remain in poverty and require humanitarian aid.

I asked Professor Ryoo if he believes a consistent message about North Korea is coming from Japan, South Korea and China. He replied that although the three countries are in broad agreement their perspectives are different, particularly because Japan and South Korea are US allies.

He urged Japan to adopt a missile defence system to protect itself from attack.

Professor Ryoo gave two scenarios in which the leadership of North Korea could change. One was “through an assassination or a coup d’etat”, although he added “I don’t think that is very likely.”

The other scenario is that North Korea becomes more open and its citizens are able to compare themselves to people in other countries. This might foster the start of a market-orientated economy which could lead to the gradual collapse of the present system. However, he added that “I don’t think that is happening at the moment.”

He repeated his wish to see the two Koreas reunite and contribute to the peace and prosperity of the Asian region but he said that such a goal seems a long way off.

The leaders of Japan and South Korea held talks this week in Seoul, during which they condemned the missile launches by North Korea. They also reported progress over an issue which has divided them in the past – the so-called “comfort women” form Korea used by Japanese soldiers in the war.

Why did Shinzo Abe dress up as Super Mario?

shinzo-abe-mario_759_rtrWhen Japan’s Prime Minister Shinzo Abe dressed up as Super Mario and popped out of a pipe at the end of the Olympic Games ceremony in Brazil he was sending a couple of important messages.

Firstly, he wanted to show that he is a fun, friendly person and not an scary nationalist, as he is often portrayed in the Chinese and South Korean media.

Secondly, he wanted to reinforce his image as a super salesman for Japan and a tireless supporter of its business.

Mr Abe’s Mario costume fell away almost the instant he appeared, leaving him standing in a sober suit.
Shinzo Abe has a vision of a prosperous Japan at the heart of global trade. He vigorously advocated Japan’s membership of the Trans-Pacific Partnership, to the delight of big business.

Yet Prime Minister Abe’s commitment to the TPP project caused dismay among people who expected him to be conservative and protectionist. Mr Abe’s opponents accused him of betraying them through a push towards globalisation. Farmers feared the deal would take away their livelihood by tearing down their protection from foreign competition.

Japan continues to seek free trade deals with the European Union and with China and South Korea. In those two countries, another aspect of Mr Abe’s vision – for Japan to play a greater role in global political affairs – sometimes causes unease. Of particular sensitivity is the suggestion that Mr Abe plans to reform the pacifist cause of Japan’s constitution to enable its forces to fight abroad.

Mr Abe himself has warned against “naked nationalism” and the label of nationalist seems somewhat at odds with his globalised world view. However, what matters a great deal in terms of trade is Japan’s image. Japanese corporate success depends on its companies’ ability to provide consumers with goods and services without any disruptions caused by politics.

The best approach is a modest one such as that taken by the Mitsubishi Corporation at Andhra University in India. Its Japanese cultural centre offers students green tea and lessons in the the gentle art of origami. In such a context, promoting Japan is about showing a friendly face to its neighbours. And perhaps inviting them to a session on the Nintendo 64 for a game of Super Mario.

Renho says Abenomics has stalled

renho2A woman with a tough reputation for trying to stop Japan wasting money is hoping to be the lead challenger to Prime Minister Shinzo Abe.

Reuters says that Renho has become the clear favourite to become the first female leader of Japan’s biggest opposition party, the Democratic Party of Japan.

She is hoping to succeed Katsuya Okada who recently announced he would resign following poor election results for the party.

Renho, 48, has a a Taiwanese father and a Japanese mother and uses only one name in public life.

She told Reuters that Prime Minister Shinzo Abe’s “Abenomics” policy has stalled and a change of gear is needed to favour people over corporations.

That led one commentator on Japan Today to remark: “Saying “Abenomics” has stalled is like saying the clunking car you were pushing along because it had run out of gas came to a halt because you got tired of pushing.”

Renho is noted for her white suits and robust approach to bureaucracy.

In fact, she was part of the cabinet when the DPJ was in government in 2010. The Japan Times claims that at that time, Renho had several fierce, face-to-face battles with bureaucrats who she thought were wasting taxpayers’ money.

Despite the overall weakness of the DPJ, Renho’s personal popularity seems especially among female voters.

Her bid for party leadership comes at a time when gender is often debated in politics.

This year marks the 70th anniversary of women’s suffrage in Japan. After World War II, Japanese women won the right to vote and run for office. But, 70 years on, women’s representation in both houses of Japan’s parliament remains low by most statistical measures.

However, this year two other female politicians have been in the spotlight. One of them is Koike Yuriko who became the first female governor of Tokyo in the summer.

As Tokyo will host the 2020 Olympics it will make her one of Japan’s faces to the world.
Another high profile figure is the defence minister, Tomomi Inada, the woman dubbed in the Financial Times as “Japan’s Joan of Arc”.

There have been reports in the media that long before taking up the post of defence, Ms Inada said Japan should consider arming itself with nuclear weapons.

This week, it was announced that the Defence Ministry is requesting a record budget of 5.16 trillion yen (£39 billion) including money for new missiles, but not of course any armed with nuclear weapons.

If Renho manages to become leader of the opposition, she will no doubt wish to robustly question Inada on both the strategy and the cost of her proposals.

Saving Japan from the fate of death by overwork


The Japanese Prime Minister Shinzo Abe, the Japanese Communist Party and the Bank of Japan all agree on one principle; the way Japanese people approach their work should change.

Labour reform is Japan’s “biggest challenge” according to Prime Minister Abe. When I met with representatives of the Bank of Japan in Tokyo recently they told me it is also Governor Kuroda’s top priority.

On the other side of the political divide is the Japanese Communist Party, which is fully committed to the opposition alliance aim to bring down the Abe government.

It describes workplace problems in stark terms: “Under the tyrannical rule of large corporations… workers are afflicted by long hours of work and excessively heavy workloads that could result in karoshi (death from overwork).”

The Communist Party complains about the problems of forced overtime, a lack of female participation in the workforce and a lack of job security. This strikes a chord with many hard working Japanese people and may explain why the party did well in recent elections and now has 14 seats in the Upper House of Parliament.

Death from overwork is rare but many people face hardship trying to balance their jobs with care for children or elderly relatives. An employee who hopes to rise in a corporation is often expected to work between 10 and 15 hours a day. Combined with commuting and afterwork socialising, that leaves little time for household work, the overwhelming amount of which is still done by women. Japanese men do some of the least housework of men in any developed country.

Foreign investors do not especially care if Japanese men clean the bathroom or do the washing up. But they are concerned that inefficient work practices hold back Japan’s economy. Take the view of Fisher Investments, an independent investment adviser with US offices in Washington and California. Its recent report on Japan complained about “protectionist regulations promoted by strong vested interests that discourage competition and a byzantine labor code that discourages companies from hiring new workers or effectively competing with each other.”

Mr Abe wants to change things. Earlier this month he unveiled a package which puts particular emphasis on helping workers who do not have secure full-time positions, including ensuring equal pay for equal work and raising the minimum wage.

Other reforms aim to boost female labour force participation, such as reducing excessive work hours and encouraging telecommuting.

These labour reforms form part of the third arrow of Abenomics – which is actually lots of little arrows, aimed at many targets.

The ultimate goal is profound social change within Japan, a process which is not easy to measure.

Abenomics dismays the foreign press

n-poll-a-20160805-870x625Japan’s finances are being pushed towards a cliff by a prime minister who is drunk on borrowed money.

These are two of the alarming images which were appeared in the international press this week to describe Prime Minister’s Shinzo Abe’s economic policy, Abenomics.

Abenomics is nearly always criticised by the foreign media for being neither innovative nor effective. The latest spending announcement from the prime minister was generally dubbed “disappointing”.

The general view in the foreign press is that fiscal stimulus packages, like the one announced this week, are part of a long-established, boring and unsuccessful attempt to solve Japan’s economic problems by spending borrowed money on wasteful projects.

The key criticism is that this racks up ever more debt for Japan and does not address fundamental issues with the way Japanese society is organised.

The fiscal cliff idea comes from the view that if Japan keeps spending like this, at some point the money will run out and Japan’s economy will face a precipice and then a terrifying, sudden fall.

The claim that the government is “drunk on money” comes from the idea that because the spending is of borrowed money, rather than money derived from tax, it cannot last. Barron’s Asia said Mr Abe is therefore like a drunk person high on a drug which makes his problems worse.

Despite being aware of such criticism, Prime Minister Abe continues to spend money on projects which he hopes will stimulate the economy and keep Japan out of recession.

The measures are popular among Mr Abe’s supporters.

Bloomberg explained that the latest spending package includes funds to provide better port facilities for cruise ships and to accelerate the construction of a high-speed maglev train line.

There is also a substantial sum to help with reconstruction following earthquakes.

And a large proportion of the money is specifically designed to help address the problems associated with an ageing population. For example, it will help to pay for child care for mothers who want to work. Getting more women to work is seen as one way of balancing the number of people who are retiring.

So in the minds of the Japanese, the real test of Abenomics is how well it fits together as a coherent set of policies which benefit the whole of society, including women and the elderly.

Few Japanese people regard it as a perfect solution to a complex set of challenges. But they accept it as a plausible approach even though it does nothing to reduce Japan’s mounting debt.