Relations warm between Japan, China and South Korea

tpbje20151102017_53734637There has been a breakthrough in Japan’s diplomatic relationship with China and South Korea. The leaders of the three countries met for the first time in three years last weekend. A few days later, China’s premier urged Japanese businesses to maintain their trade with China, despite a slowdown in China’s rate of economic growth.

On Sunday, Japan’s Prime Minister Shinzo Abe, China’s Premier Li Keqiang and President Park Geun-hye of South Korea met in Seoul. Such meetings had been suspended since 2012 amid disagreements over history and territory. Afterwards, the leaders issued a joint declaration stating that their trilateral cooperation has been “completely restored”. They promised to resume their regular meetings and said they would work towards greater economic integration.

The media were largely positive about Japan’s role in the summit. For example, Joseph Nye of Harvard University wrote in the Huffington Post that Mr Abe has been relatively successful in terms of foreign and defence policy. Defence has been a keynote issue for Mr Abe. He has enhanced the role of the Japanese Self Defence Force but he has not overturned the pacifist clause of Japan’s constitution, a step which would have infuriated China.

This week, more than two hundred members of the powerful business association the keidanren travelled to Beijing. The Chinese premier Li Keqiang urged them to strengthen business ties with China. He promised to broaden market access and provide a more open and fair investment environment for foreign companies.

The relationship between South Korea and Japan still suffers from the pain caused by Japanese occupation. The biggest stumbling block, according to President Park of South Korea, is the issue of comfort women. Such women were enslaved by Japan to provide sex for its troops, and articles which shame Japan over the issue often appear in the Korean media. Following the meeting in Seoul, the two countries agreed to hold more talks on the issue and Mr Abe said they “should not leave behind difficulties for future generations” in building a co-operative relationship.

When it comes to the legacy of occupation, China shares similar resentments against Japan to South Korea. However, that does not mean they necessarily gang up on their former enemy. South Korea and Japan have more in common politically with each other than they do with China; both are allies of the United States. For Japan, the ultimate diplomatic goal is cordial relations with all its neighbours and with with the US, a challenge made more more complex by China’s rapid economic rise and increasing diplomatic assertiveness.

Japan offers its sporting venues to the world

c44adf44925f415ab24b53e9d75bdbddJapan wants big sporting events to boost its economy and bring it international prestige. It is hoping to learn from the UK how to gain long-term benefit from hosting international tournaments.

For the past month, England has been hosting the Rugby World Cup and has been widely praised. “We couldn’t be more pleased with how England 2015 has succeeded. We believe it has succeeded at every level,” said Brett Gosper, the managing director of Rugby World Cup Limited.

On the field, it was the Japanese performance which really impressed Mr Gosper: “Possibly the greatest story of 2015 has been the success of the Japanese team. The Japan-South Africa game, I’m sure they’ll make Hollywood films of that one day,” he said.

The Japanese victory over South Africa was probably biggest upset in rugby history and the buzz of excitement over rugby in Japan at the moment is enormous. The Japanese TV commentator was so shocked when Japan won the game in extra time that he was unable to speak for 45 seconds.

Japan is now looking forward to hosting the Rugby World Cup in 2019.

This week, I attended an excellent event in London called Presenting Japan, organised by Dentsu. Among other things, it emphasised the great opportunities for Japan associated with the Rugby World Cup and the Olympics in 2020. For example, there will be investment in signs in English, which should make it easier for foreigners to travel in Japan. There are plans to encourage more community sports participation, especially among Japan’s older people. Japanese people are also going to promote sport in developing countries.

This week the logo for the Rugby Word Cup was revealed bearing two of Japan’s most recognisable symbols, the rising sun and Mt Fuji. It has apparently been rigorously tested to ensure it is original and not a copy. The logo for the Tokyo 2020 Olympic Games was criticised for its similarity to something designed for a theatre in Belgium.

Japan hopes that the legacy of the Rugby World Cup and the Olympics will be beneficial, both economically and diplomatically. At the London presentation, the Tokyo 2020 Chief Operating Officer Yukhiko Nunomara looked back to the last time the Olympics was held in Tokyo, in 1964. He said that it transformed the way Japan was seen by the rest of the world following the war. He also said it was a factor in bringing about the rapid economic growth which began in the early 1960s. One example is the famous shinkansen train, which went into service at around the time of the games.

David Cameron hails the UK’s “golden era” with China

chinese-queen-jinp_3477676bThe British prime minister David Cameron said the relationship between Britain and China is entering a “golden era”. Many business deals were signed during a trip to London by the Chinese president. Should Japan be worried?

There was a warm welcome for President Xi by the Queen, Mr Cameron and Britain’s politicians and business leaders. One Chinese newspaper called it a match made in heaven because the UK wants to attract overseas investment and Chinese investors are seeking quality destinations for their funds.

The UK would like Chinese money for big transport and energy projects, such as high speed rail lines and nuclear power plants. Those are fields in which the Chinese and the Japanese compete. For example, Chinese investors have agreed to take a stake in a new nuclear plant. Japanese companies such as Hitachi, Mitsubishi and Toshiba are also keen to help build nuclear power plants in Europe. However, the Fukushima disaster has damaged Japan’s safety reputation.

Another concern for Japan will be the diplomatic impact of President Xi’s visit. China and Japan are sensitive when their rival is courted by other countries. Yet even as the red carpet was being rolled out for President Xi at Buckingham Palace, the British Parliamentary Group was holding a reception for the Japanese Chamber of Commerce and Industry in a building beside Big Ben.

President Xi mentioned Japan briefly during his speech in the City of London. He said this year marks the 70th anniversary of the victory of the Chinese People’s War of Resistance against “Japanese Aggression and the World Anti-Fascist War”.

He praised George Hogg, a British journalist who he says exposed the “atrocities committed by Japanese aggressors” in his reports.

Mr Xi said: “The enduring friendship forged between the Chinese and British people in the flames of war is an invaluable asset of China-UK relationship.”

Such rhetoric is so often used by the Chinese it was barely noticed by the British media.

However, there were some people who expressed disquiet about the British establishment’s enthusiasm for China. One critic used the BBC’s flagship radio programme Today to voice his concerns. China expert James McGregor warned that Britain would now be seen as being “on a leash” by the Chinese leadership. Mr McGregor, who is the chairman of consultancy group APCO Worldwide’s Chinese operations, said: “This is incredible what’s going on right now, with the British Government saying ‘we want to be your best friend, we want to be your best friend, we’ll do anything for it’.

“Well, if you act like a panting puppy, the object of your attention is going to think they have got you on a leash. China does not respect people that suck up to him. I think England is going to rue the day they did this.”

The Chinese state newspaper China Daily said the business deals stemming from the visit will only be the low-hanging fruits. “This visit is more about diplomatic realism. It is too early to talk about a UK-China ‘love story’.”

Japan embraces ASEAN region despite investment risks

 20150822001168722734-minihighres-400x238Japan is investing twice as much money in South Eastern Asian countries than it is in China. Many countries which were invaded by the Japanese in the last century now want Japan to help their economies grow.

This week I attended a conference about the ASEAN countries at Asia House in London. It gave a valuable insight into an extremely diverse region, from the small but wealthy city state of Singapore to the still largely rural economies of Laos and Mynanmar, formerly known as Burma. Japan’s trade body, JETRO, says that Japan’s investment into the ASEAN nations jumped 120% over the past year to $23.6 billion. A report by PWC Australia explains that this largely came at the expense of China, which saw Japanese investment decrease by 33% to $9 billion.

There are three principle opportunities for the Japanese in the ASEAN region. Firstly, there is an opportunity to grow the market for Japanese products and services.  Secondly, there is a chance to invest in infrastructure. And thirdly, Japanese companies are seeking to build products in reliable factories with workers who will accept lower wages than the Chinese.

Although parts of the ASEAN region remain poor, there are many countries where rapid economic growth is creating a growing middle class. Consumer spending is ASEAN countries is set to reach two trillion US dollars by 2020, according to PWC. That makes it an attractive market for Japanese companies, who face a shrinking domestic market on the Japanese islands. So, Honda is busy selling cars in Indonesia, Mizuho bank is issuing bonds in Thailand and food and drinks companies such as Kirin and Suntory have set up their regional headquarters in Singapore.

Another opportunity for Japanese businesses is infrastructure. Earlier this year, the Japanese Prime Minister Shinzo Abe pledged to invest more than a hundred billion dollars in Asian infrastructure projects, much of it through the Asian Development Bank. That should benefit countries such as Thailand and the Philippines, which want Japanese money for transport projects, renewable energy and rural development. The Japanese have extensive experience in these areas although they are cautious helping industries which might become rivals to Japan.

It is not always a straightforward process. For example, Japan offered to build a Shinkansen high speed railway in Indonesia but the government asked the Chinese to build it instead. As Richard Dailly of Kroll said at the Asia House conference, the competition pitted a Chinese state enterprise against corporate Japan – something of an uneven battle.

Another incentive for Japan to expand in the ASEAN region is the relatively low cost of labour, especially in comparison to China, where wages are rising. Japanese car manufacturers have long been producing in Thailand but the political situation there – a military government – makes investors cautious. Instead, Vietnam and Indonesia are seeing heightened Japanese investment interest.

Mr Abe has committed Japan to the Trans Pacific Partnership trade deal, which is primarily expected to enhance Japan’s trade with the United States. Four ASEAN members – Brunei, Malaysia, Singapore and Vietnam – are also TPP signatories and others, including Thailand, Indonesia and the Philippines, are considering joining. This could create a good trade environment for Japan.

The ten countries of the ASEAN region have another ambition: to become a single market. The impression I got from the meeting at Asia House is that this will be a slow process. Yet if a single market increases prosperity in the ASEAN region, that would be welcomed by Japan, which also stands to benefit from its neighbours’ economic progress.

Clinton and Obama split on US-Japan trade deal

japan-rice-2009-8-19-22-10-0Japan’s prime minister Shinzo Abe hailed a trade deal with the US and other countries as a major political victory. The deal has been welcomed by Japanese exporters like Toyota but Japanese farmers are worried about its implications.

The Tran-Pacific Partnership (TPP) aims to make commerce easier between twelve countries, including the US and Japan. It removes many restrictions on imports and exports and should sweep away tariffs and bureaucracy. Because the major players, Japan and the US, enjoy such a large share of the global economy, the media’s attention has been on them rather than the other signatories, such as Peru.

For Japanese exporters seeking greater access to the US market, it presents an opportunity to compete more vigorously with their international rivals. Car makers such as Honda and Toyota expect to benefit. Therefore TPP has the backing of the powerful Japanese business group, the Keidanren.

For Japan’s farmers, TPP is a potential problem. They are worried that Japan will now allow imports of large quantities of rice, which is cheaper than the home-grown crop. Up to now, Japanese farmers have received subsidies from the government and there have been heavy tariffs on some types of imported rice. The leading Japanese newspaper the Nikkei asserts that the Japanese government has managed to exclude five agricultural products from the TPP deal; rice, wheat barley, dairy products, sugar cane and beet and beef (except organ meat).

Still, many Japanese people are concerned about the longer term implications of opening Japan up to this rigorous international competition.  Will it mean that rice farmers lose their livelihood? Or can they adapt to cope with the competition?

However, for the international journalists, the Japanese farmers are not the main story about TPP. The reporters are more interested in a disagreement between Hilary Clinton and President Obama.

Mr Obama – like Mr Abe – hailed the deal as a success. He told business leaders: “I wanted to get the best possible deal for American workers and American businesses, and that is what we have achieved.”

However Mrs Clinton said she cannot support the agreement. The Republican party in the US is not supportive either, which could mean it is not ratified in Congress. The Financial Times says Mr Obama hopes to get TPP passed by Congress before he leaves office in January 2017 but the political process is complicated. 

China – which is not part of the TPP deal – reacted cautiously. China’s Ministry of Commerce called TPP “one of the key free trade agreements for the Asia-Pacific region”, according to the Xinhua state news agency website.  “China hopes the TPP pact and other free trade arrangements in the region can boost each other and contribute to the Asia-Pacific’s trade, investment and economic growth,” it said.

Abe’s ally urges women to have more babies

20150905_asp501What is most important for Japanese women? Getting ahead at work or having babies? These are questions raised in the international media this week, following controversial remarks by a male politician.

Chief Cabinet Secretary Yoshihide Suga encouraged women to “contribute” to the nation by bearing lots of children. Speaking on a Fuji TV news show, Mr Suga expressed his hopes that a recently announced marriage between two Japanese celebrities would encourage more women to marry and have babies.

Mr Suga is a close political ally of Prime Minister Shinzo Abe. The international press generally presented his comments as old fashioned and patronising. For example, the British newspaper The Guardian, which supports gender equality, reported the comments under the headline Sexism Row. It went on to explain that Japan performs poorly in international gender equality comparisons. In the World Economic Forum’s 2014 gender gap index, it ranked 104th out of 142 countries. The Guardian also highlighted Japan’s low female participation rate in the labour force.

At the recent World Assembly for Women in Tokyo, Mr Abe declared that “Abenomics is Womenomics”. The Japanese parliament recently passed a law calling on companies to find ways to promote more women. Previous initiatives do not seem to have gone well. For example not a single Japanese company has applied for a government subsidy to encourage firms to promote women.

This could undermine efforts to create more jobs for women to compensate for a shrinking workforce. Around 60% of Japanese women leave their jobs for childbirth and many find it difficult to resume their careers. Japan’s business newspaper the Nikkei suggests this is because they lose touch with new technology. The Womenomics plan includes support for mothers to regain workplace skills as well as help for companies that let fathers take time off to care for children.

Japanese women fascinate the international media, which often suggests they have a strange attitudes towards sex and romance. For example, the artist Megumi Igarashi has gained enormous attention for making a boat in the shape of female genitals. And this week  many websites reported a new service in Tokyo to send a handsome man with tissues to wipe the tears from distraught women in their offices. Hiroki Terai, creator of Ikemeso – the firm advertising the service, said: “Japanese women are under tremendous stress at the office here in Tokyo, which often ends in in tears. We are here to provide a kind word and brush the tears away by one of our seven lovely men on call.”

Japan experts scrutinise Shinzo Abe at Chatham House Conference

This week I attended a lively conference about Japan at Chatham House in London. The speakers included experts on Japan from universities and institutions from the UK, the United States and Japan. Most of the discussion was about politics, economics and international relations. I heard a number of comments about Japan which surprised me and in this week’s blog, I am going to share what I heard. I do not agree with all the viewpoints. However, all the points below were made by people who study Japan carefully.

Here are some of the comments about Japan’s economic situation. I have summarised them into soundbites which contain very few numbers:

Abenomics has been a big experiment.

Abenomics is an intense, short-term policy. It is not designed to be long-lasting.

Abenomics is like the emergency treatment of a patient in intensive care. The aim is to stop the patient collapsing and dying.

Abenomics was a response to the economic crisis which followed the earthquake and tsunami of March 2011.

More than 200,000 Japanese are still displaced from their homes because of the earthquake and Fukushima nuclear disaster.

Mr Abe promised to fire three arrows: monetary easing, fiscal stimulus and reform. However, the second arrow has not been fired because there has not been an increase in public spending.

There is not much evidence the third arrow of reform has been fired. So far, the only visible reforms have been in the electricity sector.

Abenomics is a response to an ageing population. When people are old they do not spend so much so Mr Abe’s goal is to stimulate domestic demand by convincing people to spend.

Abenomics is based on a false promise. It promises that Japan’s economy can grow but that growth cannot be achieved with an ageing population.

Abenomics has widened the gap between rich and poor. In the financial crisis, assets such as bonds and shares lost value. Action by the Bank of Japan has caused those assets to rise in value. This has benefitted those who held the assets in the first place – mainly rich people, who are now even wealthier.

Changes to employment law have led to companies to hire less full-time staff with a view to employing them for their whole lives. Instead, they hire more part-time and temporary workers. Their pay and benefits are worth less than those of their peers who are doing the same job. This has contributed to an income gap and inequality.

Inequality in Japan is not caused by rich people becoming richer but by the poorest people in society becoming poorer.

Perceived inequality has a social and political affect. People are more like to support extreme political parties or feel disassociated from the political process.

A quarter of Japan’s spending each year goes towards servicing its national debt. This money could go to social programmes, such as helping the elderly.

In Japan, the social safety net which provides for people in time of need has traditionally been provided by family and by companies. Gradually this is changing so that the government takes more responsibility.

Japan has a large population of people who have not married and do not have children so the government’s duty to care for these people when they become old will be expensive.

Here are some of the comments the delegates made about Mr Abe:

Mr Abe is likely to remain prime minister until 2018 so he will become Japan’s longest serving prime minister since the Second World War.

Mr Abe’s political popularity will probably increase provided he focusses on the economy. He is less popular with voters when he is discussing security and reform of the constitution.

Other prime ministers have tried to implement reform but have had less public support than Mr Abe. His strong political position puts him in a good position to push through change.

And here are some other comments speakers made about Japan which could be used as soundbites, not using numbers.

The percentage of people getting married in Japan is falling. The age at which people marry is getting older.

There are more opportunities for women at work than in previous generations. This encourages women to develop their careers before choosing to marry and start a family.

A very tiny number of children in Japan are born to parents who are not married.

Child care provision for working women has improved significantly in the recent years.

Japan is the largest user of fax machines in the world.

Japan has a population half the size of the United States all squeezed into a geographical area the size of the state of Montana.

Japan has for many years been the biggest investor in China.

Japan’s relationship with the US is like that of an adolescent child. Sometimes it gets resentful and tries to rebel against the adult but afterwards it apologises and asks for guidance and protection.

On the whole, the quality of the debate was very high and there was a good rapport between the speakers and the audience. The event was well organised. However, as I want people to improve their communication skills, I made a note when I heard phrases by speakers which I feel should not be used when giving presentations.

I am really sorry but I have got five minutes and that leaves only one and a half minutes for each of my points. I will try to squeeze them all in.

I could say so much more but I need to move on.

I am sorry, there is not time for my next point, so I will skip that one.

On the aeroplane on my way to this conference, I was thinking about what to say.

(Introducing himself) I am sorry I do not know much about the subject this panel is discussing.

I did not understand the meaning of the title of this session so I looked it up on the internet.

I am not an economist (said by a Professor of Economics.)

I am sorry I am using a lot of numbers (speaker used 60 numbers in a short presentation.)

(Chairman, when asked to sum up) I am unable to sum up what has been said in this session.

So, that is my summary of the event. I enjoyed listening and learning and I am very grateful to Chatham House for inviting me to attend. I hope I can join the conference next year in Tokyo and I would love to chair one of the panels.

Abenomics floods the economy with yet more borrowed cash

20141117_abeWhat can be done by Japan’s Central bank to shake off the threat of recession and get the economy growing again?

The media were asking this question before the central bank in the US, the Federal Reserve, left interest rates unchanged.

The Bank of Japan was waiting for that news before deciding what it should do. It is also waiting to see how economic events unfold in China. Japan has benefitted greatly from the rapid rise of China, its largest trading partner, but the rate of growth there is slowing.

The Bank of Japan’s governor Haruhiko Kuroda said that if China’s economy maintains stable growth, Japan’s  exports should too. He is probably also expecting some investors to move their money from China to Japan, just as they did in August when a Chinese stock market crash boosted the yen.

The decision by the Fed to leave rates unchanged makes it unlikely that the Bank of Japan will raise its rates, which remain close to zero. The other tool which central banks use to try to stimulate economies is expensive and difficult to grasp. Since the global financial crisis, they have been buying government bonds and other assets in what the economist David Stockman calls money printing madness. The more polite definition is a “stimulus programme”.

For Japan the annual cost is almost incomprehensibly large: 80 trillion yen, $663 billion. In overall terms that is not quite as much in dollar terms as the European Central Bank spends buying assets each year; 1.1 trillion Euros, or $1.3 trillion.

Challenged on this, the Vice President of the ECB Vitor Constancio suggested the European figure was prudent compared with Japan because the Eurozone’s economy is larger than that of Japan’s.

“The total amount that we (the ECB) have purchased represents 5.3% of the GDP of the Euro area,” said Mr Constancio. “Whereas what the [US] Fed has done represents almost 25% of the US GDP, what the Bank of Japan has done represents 64% of Japanese GDP.”

Hearing this strange defence, economists concluded that the ECB has the scope to spend more if needed and “potentially much more“.

The message from the Bank of Japan seems similar to that of the ECB. Although it has decided not to increase speeding on its stimulus programme yet, it may well do so soon. Its mood is described as bullish by the Financial Times.

As well as the Fed’s decision, the Bank of Japan will be influenced by government spending decisions. As the FT pointed out recently, there will probably be a supplementary budget based on more public works spending, perhaps in November.

The Bank of Japan and the Japanese government share the same goals: a revival of economic growth and modest inflation. Their credibility rests on achieving them and their hope is that once that happens the money printing can stop and monetary policy can get back to normal.

Toshiba’s image tarnished further

ABEThere was a further blow to the reputation of Toshiba. The Tokyo stock market soared. And Shinzo Abe is set to become Japan’s longest serving prime minister since the 1970s.

Toshiba revealed in April it has exaggerated its profits, leading to the resignation of its chief executive Hisao Tanaka. This week Toshiba admitted the scale of the problem: it overstated profits by nearly two billion dollars over the past seven years. The media made comparisons to the recent accounting scandal at Olympus.

Seijiro Takeshita of Shizuoka University told BBC radio that companies such as Toshiba should not hold onto “the old methodology of business conduct without trying to change, or recognising that the world has changed.” Yuuichiro Nakajima of Crimson Phoenix said: “Toshiba will change – they will have to. They will probably sell non-core businesses. This will probably scare other, similarly unwieldy conglomerates to do the same.”

Laws to enforce reliable accounting and honest financial reporting are included in Abenomics and form part of the so-called “third arrow”, which is actually many different arrows. The Financial Times printed an excellent guide to which arrows are on target.

So is Abenomics working? There are encouraging signs. Economic figures were better than expected, so it seems Japan is not about to re-enter recession. The Nikkei recovered all the losses it incurred last month during a panic over China. And there was yet another  takeover, when Mitsui Sumitomo bought the London-based insurer Amlin for three and a half billion pounds. Peter Gray of Cavendish Financial told City AM: “Cash-rich Japanese companies have clearly opted for mergers and acquisitions as a response to a slow domestic market.”

The slow domestic market is the most serious problem for Abenomics. Fund Manager Hideo Shiozumi wants Japan to break the cycle of recession and believes Japan must target real GDP growth of two percent. Mr Abe said: “We will change Japan into a country that is able to keep growing. Placing the economy as my highest priority, I will move forward steadily, step by step, on the roadmap for achieving this goal.”

Mr Abe’s re-election uncontested as leader of the LDP gives him time to work towards that goal. He is now set to become Japan’s longest serving prime minister in more than four decades.

Japan’s defence spending to rise as Chinese troops parade in Beijing

china-mainAn enormous military parade marking the anniversary of Japan’s defeat took place in China. Japan’s defence ministry has requested its largest ever budget. And the Yakuza crime gang Yamaguchi-gumi has broken up.

China marked the 70th anniversary of Japan’s surrender in WWII with a vast parade of soldiers and weapons in Beijing, including intercontinental ballistic missiles and advanced bombers. The event was attended by both Vladimir Putin of Russia and the South Korean president Park Geun-hye. In a speech, the Chinese President Xi Jinping said China does not seek regional hegemony or expansion and that it will never inflict its past suffering on any other nation. He insisted that China was “loyally committed to the sacred duty of safeguarding world peace.” He also made the surprise announcement that Beijing would cut its two million-strong military personnel by 300,000 and described this as a gesture of peace.

Japan’s defence ministry ignored the announcement and requested a budget of five trillion yen (£27bn) next year, citing concern over China’s construction of artificial bases in the South China Sea and its claims to the disputed Senkaku/Diaoyu island chain in the East China Sea. If passed by the Diet, this will be Japan’s biggest ever defence budget and would match prime minister Shinzo Abe’s plan to expand the scope of his country’s military.

This week, Chinese television showed many drama programmes of Chinese solders resisting the Japanese in WWII. The Singaporean newspaper Today said this form of intense Chinese patriotism fuels antipathy to Japan.

Japan’s image was not helped by media coverage of the Yakuza, an organised crime group. The BBC website said the Yakuza mainly make money from gambling, prostitution and violence. It claimed that the name Yakuza is derived from the numbers eight, nine and three; a losing hand in a Japanese card game. This week the Kobe-based Yamaguchi-gumi Yakuza gang said it has broken up. Apparently, the Japanese police force is bracing itself for gang warfare as small groups of Yakuza attack others groups in battles for territory.

The Yakuza often make profit by selling drinks at extortionate prices to the customers of hostess bars. Yet those drinks appear cheap in comparison to the Japanese whisky sold this week. Bonhams auction house said a single buyer from Southeast Asia spent $118,540 on a bottle of 1960 Karuizawa, a world record. The same buyer also picked up a separate 54-bottle collection of Japanese whisky for another $489,968.

Because the whisky was sold in Hong Kong and not in Japan, the astonishing prices did nothing for Japanese inflation, which has now slipped back to zero. Still, that means a refreshing cup of green tea costs no more than it did a year ago, offering a cheap opportunity to reflect calmly on Japan’s more sober and peaceful qualities.