Cryptocurrency Stolen in Silent Heist

The Japanese press are full of headlines about a massive and silent bank robbery in Tokyo.

Asahi newspaper reports that around 58 billion yen (approx. $533 million) was taken by thieves from a vault in Shibuya, Tokyo. The money was not in cash but in the form of a cryptocurrency called NEM.

The cryptocurrency tokens were being traded through an agency called Coincheck. Its shocked bosses appeared before the cameras at a late night press conference at which they explained that millions of NEM tokens were removed from digital wallets and “sent illicitly outside the company’s system.” In other words, they were pinched.

Bigger than Mt Gox

All of this will add to the widespread view that trading in cryptocurrencies is sleazy, dangerous and out of control. It’s not the first big robbery in Japan. In 2014, millions of Bitcoins were taken from an exchange based in Tokyo called Mt. Gox, which soon went bust.

Since then, the overall value of digital tokens being exchanged around the world has increased significantly, with many investors hoping to make a quick profit from their deals. In Japan, this high risk aspect of the trading seems to be the allure. It’s not seen as an investment but a rather silly form of gambling, rather like pachinko.

Pop song

There is even an all-female cryptocurrency-themed band called Kasotsuka Shojo, which literally translates as Virtual Currency Girls. Each member of the band represents a different cryptocurrency, from Bitcoin to Ethereum to Litecoin.

“We want to promote the idea through entertainment that virtual currencies are not just a tool for speculation but are a wonderful technology that will shape the future,” Rara Naruse, an 18-year-old singer with the group is quoted as saying.

This rather implausible theory is supported by Kasotsuka Shojo’s first single, which is called The Moon, and Virtual Currencies and Me. The song includes a few timely lines advising on online security.

Is Asia to blame?

The BBC’s Asia Business Reporter Karishma Vaswani recently asked if Asia is driving the Bitcoin craze. She revealed that a one point Chinese investors made up at least 80% of Bitcoin ownership.

But China became worried about the outflow of funds into the market, so it effectively banned cryptocurrencies by outlawing initial coin offerings, or ICOs, which are basically public share offerings that are invested in via the use of digital currencies.

That left Japan has a haven for the trade, now celebrated in song.

But as news of a cyber robbery flashes through the media, it probably won’t be long the conservative financial authorities in Japan try to halt a trade which is losing all financial credibility.

“My company’s a goose” says Japan’s richest man

Who is Japan’s best communicator? People often tell me it is the nation’s richest businessman, Masayoshi Son. As a public speaking coach, I can’t promise to make my clients rich like him. But I do encourage them to listen to both what he says and how he says it. In this blog, I’ll share with you a simple principle which Mr Son uses when explaining his ideas to international audiences.

 

Golden eggs

I have heard Masayoshi Son give brilliant speeches in both English and Japanese. He has a particular skill with visual aides. At one investor briefing, for example, he showed his audience a slide with a picture of a goose. “My company is like the bird of the legend that produces golden eggs,” he explained. That slide was so striking that the Economist published a whole article about three years later.

Softbank has just bought a controlling stake in the taxi firm Uber. That deal is worth more than a billion dollars. It is also said to be preparing to float the Japanese division of its telecoms business on the Tokyo Stock Exchange for around 18 billion dollars. And it runs a 100 billion dollar “Vision Fund” focussed on investing in what Mr Son calls “The Internet of Things.”

Learning from the Job

Watching Mr Son speak, I have concluded that he has learned his craft from another brilliant communicator – Steve Jobs, the co-founder of Apple. Mr Jobs studied the art of public speaking very carefully and this helped him transform Apple into one of the world’s most profitable and successful companies in the world. I am sure Mr Son has read the book by Carmine Gallo who coached Steve Jobs.

Keeping it simple

The key point to remember is that audiences do not want speakers to show them slides with lots of words written on them. Japanese audiences may be too polite to complain but when bored, they simply stop paying attention and fall asleep!

Wordy slides undermine a speaker’s credibility and suggest that he does not really know the material. Audiences find it frustrating if they are able to read the words on the slide faster than the speaker can say them.

When I asked an American public speaking coach based in Tokyo for his advice, he said the slides of a presentation should tell a story. The first group of slides can form chapter one, the second group will form chapter two and in the end there will be a conclusion.

He reminded me that some Japanese people want to be able to leave a meeting or a presentation with a single deck of slides, printed out on pieces of paper, which contain all the information they have heard. They might need to show the print-out of the slides to a colleague or to a superior after the meeting.

Double deck

So, which is better in Japan? A big detailed deck of slides or a small, simple set? The American public speaking coach says:

“What we do, is we create one detailed deck which is printed out and given to the people to take away with them. However, we also create another deck which is much simpler, which we project on the screen during the presentation itself.

“Of course, it takes time to create two different decks of slides but it avoids the problem of having too much detail on the screen when the speaker is making his presentation.”

That means, you can make slides which are simple and have a strong visual impact. A goose laying a golden egg is a perfect example.

Is the party over for the Bank of Japan?

Can you imagine a party thrown by the Bank of Japan at which its officials encourage guests to become roaring drunk?

That was the clever metaphor used by reporter Patti Domm of CNBC to explain a hugely important issue with is hidden behind a horrible, jargonistic name: Quantitative & Qualitative Easing (QQE).
Party time

In an excellent piece of journalism, Ms Domm invited her readers to picture the Bank of Japan’s headquarters in Tokyo as somewhere like the Playboy Mansion in California. (It is actually an imposing castle-like building in Mitsukoshi Mae, filled with sober civil servants.)

“The Bank of Japan is seen as the last grown-up in the room actively filling the global liquidity punch bowl with both hands,” declared Ms Domm.

That brought a smile to my face. Another way to explain the concept “creating liquidity” is to suggest that central banks “print more money.” Of course, they do arrange for the printing of bank notes but their QE policies are based upon the acquisition of government debt through the purchase of assets.

Flurry of panic

The Bank of Japan appeared to be continuing this asset buying programme with enthusiasm until last week, when it modestly trimmed its purchases of long-term government bonds by about $20 billion.

As Ms Domm explained on CNBC: “A slight tweak to its bond-buying program caused a flurry across financial markets, sparking speculation that the BoJ was joining the Federal Reserve and European Central Bank in cutting back on asset purchases, a move that could ultimately help drive up global interest rates.”

It could also be a sign that the BoJ is feeling more optimistic about Japan’s economic outlook this year. There have been signs that growth will be sustained and deflation, caused by falling prices, is under control.

Forget the consequences

The problem with buying bonds is that is it raises the national debt. Sometimes, the scenario does indeed seem to resemble the actions of irresponsible drinkers at a wild party, as the government borrows vast sums of money from the central bank without a moment’s thought as to the consequences.

The Americans are also hooked on the punch bowl. The Bank of Japan has been helping America to get deeper into debt by buying US Treasury bonds. By October 2017, Japan owned $1.1 trillion dollars worth of US Treasury bonds, accounting for more than five percent of the total Federal debt. America owes a similar sum to China.

The king of debt

“I’m the king of debt. I love debt,” Donald Trump proudly told CNN during his election campaign. As a New York businessman, he thrived on taking financial risks and borrowing money to grow his empire. Now he’s running up record levels of national debt for the United States.

“Beautiful” tax cuts

The Centre for Economic Policy and Research in Washington projects that the national debt will rise by a further $1.5 trillion over the next decade, largely due to a tax cut approved by Congress in December. President Trump said it fulfilled a promise to “give the American people a big, beautiful tax cut for Christmas.” But like many extravagant presents, the real cost will have to be reckoned with long after it is delivered.

Why don’t Japanese want more pay?

In most countries, people clamour for a pay rise. For example in Germany this week, eighty manufacturing companies have been hit by strikes as unions demand a six percent increase in pay and a cut in people’s working hours.

 

But in Japan, it seems, there is not such a big demand for more money at the moment and strikes are virtually extinct. For the past few years, most people’s ordinary wage increases have been tiny, or even zero. Recently, many of Japan’s largest companies have started making record profits but there are still only a few organisations offering to share that profit with their workers.

Prime Minister Abe wants to change that. He has repeatedly called on trade unions to press employers to raise wages by at least three percent, saying it will be good for the economy.

Who’s to blame?

Why do they seem reluctant to do so? One possibility is that companies are holding back because they remain cautious about the overall economic situation. Although Japan’s economy is growing, it is not growing at a particularly rapid rate, especially in comparison with the rest of Asia. Deflation caused by falling prices remains a problem. When prices fall, people’s spending power goes up, reducing their need for a pay rise.

Frugal bosses do not appear to be the issue here, either. The powerful Keidanren business federation has said it will encourage companies to meet Mr Abe’s suggestion of a three percent wage increase. However, the Keidanren only represents the big companies. Small businesses, like farms and little shops which serve Japan’s domestic market, may simply not have the funds to raise people’s pay.

Overtime and bonuses

The Financial Times Tokyo Bureau chief Robin Harding observes that in recent years, union negotiators have often prioritised improvements in working conditions, such as ending extreme overtime, over higher pay.

Another point is that many people in Japan receive a substantial chunk of their income in the form of a bonus, usually paid in the spring. This can account for as much as a third of annual earnings. A big bonus can make people feel much more rewarded by their employer than a fractional rise in their monthly pay.

The spirit of kaizen

The philosophy of kaizen influences the way many Japanese people feel about their work. Kaizen advocates continuous improvement and encourages companies to pay people fairly for their work. However, in the kaizen mindset, large rewards and incentives do little to promote loyalty and diligence. What people really want is to feel valued, to be heard and to make a contribution. In his book Spirit of Kaizen, author Robert Maurer says that large performance incentives “tend to disrupt intrinsic motivation” and advises against an overwhelming discrepancy in pay between executives and line workers.

Hitachi’s debate

Hitachi’s chief executive Toshiaki Higashihara, quoted by Stanley Wright of the Reuters news agency website, said: “I want to debate this and do as much as possible to make sure disposable incomes rise. I approve of raising disposable incomes because in the end this will improve the economy by raising consumption.”

His little phrase “I want to debate this” is important.  Although Mr Higashihara is the CEO of a company which employs tens of thousands of people worldwide, he avoids arbitrary decisions and instead debates remuneration policy with representatives of the company’s staff. Some of them may well take the kaizen view that their level of pay at the end of each month is not the most important aspect of their job.

Investment Boss is Betting on Japan Boom

One of the most influential women in international finance has announced that Japan will be at the forefront of her investment strategy this year.
Sonja Laud, who is the head of equity investment at Fidelity International, says that Japan stands out as “a very attractive opportunity.”

She says the main attraction is Japan’s recent return to economic growth but that “lots of factors are coming together” including healthy profits at Japanese companies. Ms Laud oversees $16 billion in assets at Fidelity.

Cash rich

She told the BBC’s flagship radio news programme Today that Japanese companies are rich with cash at the moment as a result of Abenomics and their increased profitability, so therefore they should be able to drive the economy forward in 2018.

The Tokyo stock market has recently risen as corporate profits swell, led by export growth. This prompted a wave of optimism towards the end of last year as Japan enjoyed its longest growth streak this millennium. The credit agency Moody’s confirmed Japan’s A1 rating, its highest possible score, in December.

Wage conundrum

Yet there remain problems linked to deflation and low wage increases. Jane Foley, senior currency strategist at Rabobank, has described that situation as “a real conundrum.”

She says: “Japan was one of the big surprise stories when it came to growth last year. Yet inflation remains extremely low and this is despite the fact that there is such a shortage of labour.”

Japan was one of the big surprise stories when it came to growth last year.” Jane Foley, Rabobank

By contrast in the United States, which also has a tight labour market, wages have been rising and this led to a surge of optimism which helped the US stock market reach record highs. The US central bank, the Federal Reserve, is therefore easing out of its money-printing programme known as QE.

Inflation dreams

Prime Minister Shinzo Abe and the Bank of Japan hope that wages will also rise in Japan because of the labour shortage and this will push inflation upwards. The Bank of Japan has an inflation target of two percent, although most economists say this is currently far off. As a result, the Bank of Japan is sticking with QE and negative interest rates.

Jane Foley of Rabobank told the BBC: “The Bank of Japan is so far from its inflation target that it’s going to be difficult for it to withdraw from the QE programme. Yet back in November, governor Haruhiko Kuroda said he was worried about the side effects of QE, one of which is that yields on interests rates are so low that banks won’t even lend money any more. That would be the exact opposite of what the Bank of Japan wants.”

Britain pledges more defence support for Japan

Britain is offering unprecedented levels of military support to Japan in the wake of the growing threat from North Korea and tensions with China.

The United Kingdom will send two warships, HMS Argyll and HMS Sutherland, to the Asia Pacific region in 2018 and will deploy British personnel to join military training on the Japanese mainland, following a recent successful exercise involving British Typhoon fighter planes.

In addition, defence and cyber security companies from the UK are collaborating to help defend Japan against hackers and terrorists.

The arrangements were announced by the British Foreign Secretary Boris Johnson and the Japanese Foreign Minister Taro Kono.

The ministers reaffirmed that the UK and Japan are each other’s closest security partners in Europe and Asia respectively. Although the British government prefers not to use the word “alliance” when referring to Japan, some commentators have described the relationship as a “semi-alliance.”

Common values

During a trip to the National Maritime Museum in London’s Greenwich, the ministers discussed the UK-Japan alliance which existed at the beginning of the 20th Century. Afterwards, Mr Johnson said: “Looking at the maritime history of the countries and the identity that we share, it’s confirmation again that we have the same values, the same outlook and increasingly the same interests in the world.”

The meeting, known as the Two Plus Two summit, also involved Britain’s Defence Secretary Gavin Williamson and Japan’s Defence Minister Itsunori Onodera.

Urgent threat

Mr Onodera welcomed Britain’s military support and described North Korea as “a most urgent and important threat.” He warned that Japan would never accept a nuclear-armed North Korea and said that both the UK and Japan believe that upholding the rule of law is the “top priority for democracy and security in the region.”

Foreign Secretary Johnson said that “Japan and the UK really do see eye-to-eye” on North Korea. He said the best way forward is to ramp up the economic pressure on North Korea and “the people who can really do that are the Chinese.”

“The military options don’t look at all attractive,” said Mr Johnson, “that is why we want to see an international diplomatic effort.”

Missile tests

Japan and the United Kingdom are co-developing a weapon known as the Joint New Air-to-Air Missile (JNAAM). Live fire testing is expected to begin in 2018. According to Francis Tusa, Editor of Defence Analysis, it is a rare example of Japan working with a country other than the United States on a defence project. He believes Japan chose the system because of its compatibility with its aircraft. However, he does not expect the collaboration with the UK to dent the alliance between Japan and the United States.

“The US and Japan are very tight and it is hard for another country such as the UK to disrupt that relationship,” says Mr Tusa. “There are around 15,000 US marines stationed in Okinawa and around 250 US military planes in the region. What would Britain send to Japan in the event of a conflict with North Korea? Maybe only 14 planes and how long would they take to get there?” asks Mr Tusa.

Arms race

Japan is seeking to boost its defence capacity following a series of ballistic missile launches and nuclear tests by North Korea and increased Chinese activities in the East and South China Seas.
Foreign Minister Kono told reporters in London that the North Korea’s intercontinental ballistic missiles can reach not only South Korea and Japan but also other parts of Asia, the United States and Europe and therefore represent a new and dangerous threat to the international community.
Japan also fears sea and air clashes with China in disputed areas of the East China Sea.

In response to the rising tension, Japan’s Ministry of Defence has requested a record budget of 5,255 billion yen ($48 billion) for 2018. Francis Tusa says: “The Chinese are spending a huge amount of money on defence, building up to six new aircraft carriers, so I’m not surprised that a bit of an arms race is developing in the region.”

Cyber threat

In response to the growing threat of malicious cyber activity, the Japanese and British ministers agreed to strengthen cooperation in the field of cybersecurity and will hold a conference on the issue in February 2018. They confirmed that the UK and Japan would pool information in order to deter or mitigate malicious cyber activities.

In the spring of 2017, Britain’s National Health Service was hit by a cyber attack which was launched from North Korea, according to Britain’s National Cyber Security Centre.
Francis Tusa of Defence Analysis says: “You need many friends to counter cyber attacks. I don’t think any one single country has all the technology and resources needed to tackle the cyber problem. You need big data and many experts to combat the threat.”

Job opportunities

British ministers hope that some of the increased defence spending by Japan will flow to UK arms companies which are seeking valuable contracts to secure jobs in manufacturing and technology.
Britain is aiming to deepen its trading ties with major economies outside Europe such as Japan and China as the UK negotiates its exit from the European Union, the world’s biggest trading bloc.
The China factor

The Two Plus Two summit with Japan in London took place simultaneously with another top level set of talks involving senior British politicians in China. The British Chancellor (Finance Minister) Philip Hammond and the Business Secretary Greg Clark were in Beijing for the UK China Economic and Financial Dialogue. The British government said that meeting secured more than £1bn ($1.3 bn) of trade and investment deals with China.

Abe Craves Olympic Glory

Japan’s athletes celebrate at the Rio Olympics in 2016.  AFP PHOTO

“Don’t expect Shinzo Abe to try to change the constitution before the Olympic Games,” a senior Japanese government official told me privately this week. He explained that the Prime Minister’s long-cherished plan of removing the clause in the constitution which commits Japan to a form of pacifism would be put on hold until after the 2020 games.

Mr Abe originally set 2020 as the deadline for constitutional change.

My contact explained that the Prime Minister is treading cautiously because of domestic politics, international diplomacy and economics.

“I want to make the Olympics a trigger for sweeping away fifteen years of deflation and economic decline.” Shinzo Abe

Political tension

Domestically, Mr Abe requires the support of a two thirds majority in both the upper and lower houses of the parliament before he can seek its approval for constitutional change. At the moment, the numbers are on his side but he needs continued backing from both houses.

Although the opposition parties are weak, the constitution is an issue upon which they hope to draw public support. Resistance to changing the so-called pascificist clause, known as Clause Nine, remains strong, if the many recent surveys on the topic are to be believed. A final change would need approval through a referendum.

That means that if the Prime Minister wants to press for reform the constitution, he will need to debate the policy in the glare of the media. According to my friend in the government, this is not something Mr Abe wishes to do as he tries to rally the country around the Olympic flag.

Bitter Memories

Furthermore, China and South Korea are critical of Mr Abe’s plan to change the constitution and to allow Japan’s armed forces to fight abroad. Both nations have bitter memories of being occupied by Japanese soldiers in the first half of the 20th Century.

The Olympics offers an opportunity for Japan to build friendly relations with its neighbours through sport. Reigniting the debate about the region’s history of conflict would send the wrong diplomatic signal entirely, according to my source.

Abenomics

Another issue is Mr Abe’s plan to revive the economy, known as Abenomics. The economy is improving partly because of all the spending associated with run-up to the Olympics. The games also offer Prime Minister Abe an opportunity to broadcast to the world his key political slogan “Japan is back.”

When he learned that Tokyo had won the honour of hosting the games, Mr Abe said: “I want to make the Olympics a trigger for sweeping away fifteen years of deflation and economic decline.”

Figure skating

The enormous publicity value of a big sporting tournament was made clear by the success of the World Figure Skating championships in Nagoya last week.

It attracted star athletes from China, South Korea, Russia and many other countries to compete alongside Japanese stars. Japan gains great prestige when it hosts international sporting events which are shown throughout Asia on television.

Abe pledges resolute response to North Korea

Japan and South Korea are pressing the United States to step up the diplomatic effort to prevent war with North Korea.

South Korea’s ambassador-at-large for international security affairs, Chung-in Moon, has said that President Trump should send an envoy such as the former national security advisor Steve Hadley to try to dissuade the North from further missile launches and nuclear tests.

Professor Moon was speaking after North Korea launched another long-range rocket over Japan.

Following the launch, Japan’s Prime Minister Shinzo Abe said in parliament: “In order to press North Korea into changing its policies, we shall take a resolute attitude in our diplomacy,” but he also said “dialogue for the sake of dialogue is meaningless.”

A former Japanese ambassador to the United States and the United Nations, Ichiro Fujisaki, has warned that the Americans have become “very serious” over the North Korean issue because they recognise its missiles may soon be able to reach the US mainland.

Mr Fujisaki told the BBC: “Mr Trump has been very clear he will try to defend Japan, so we are putting some confidence on this US position. The US is very serious this time on nuclear deterrents and this was not the case about 40 years ago, if I may say.”

This week, tens of thousands of South Korean and American personnel have been involved in joint military exercises. They included simulated air strikes on ground targets. The North has called it “an all out provocation.”

Ambassador Moon said that the South Korean president Moon Jae-in is “desperate to avoid war” but if there was a conflict, any decision on military action must be taken jointly between South Korea and the US.

“If America fights, America wants to win but in order to win, they will need to commit ground forces. Those ground forces would be drawn from the South Korean army,” he warned.

In an on-the-record discussion at Chatham House, Professor Moon proposed that London could host a new round of negotiations involving six parties: South Korea, North Korea, the US, China, Russia and Japan.

Professor Moon said the latest missile launch could well have been deliberately designed to escalate matters. “It’s not irrational – it’s very rational from their point of view,” he said.

North Korean propaganda claims its weapons programme is needed to protect the Supreme Leader Kim Jong-Un, to protect the state’s institutions and to protect its people. Professor Moon said that these motives combine with a quest for domestic political legitimacy and a desire for international recognition.

Professor Moon said that further sanctions which could lead to the complete isolation of North Korea would be counter-productive.

He claimed that President Putin of Russia has said that the North would continue with its weapons programme “even if the people have to eat grass.”

Professor Moon said: “If we close all ties with the North, there is no way we can influence it other than creating a humanitarian disaster.” He also cautioned against shutting down all channels of communication with potential opponents of Kim Jong-Un.

 

Do lazy students let down Japan’s colleges?

This week I’ve been considering the claim: “Most Japanese universities are not very stimulating or rewarding places intellectually.”

It is not a new allegation. It was made by an American writer named Robert C. Christopher in the book The Japanese Mind: The Goliath Explained, which was first published in 1983.

Low ranking

Given the enormous prestige placed on university education in Japan, it is perhaps surprising that only one Japanese University, Tokyo, is on the Global Top 50 list compiled for 2017 by Times Higher Education.

It is ranked at number 46, below universities in Munich, Stockholm and Wisconsin.

Robert Christopher wrote in 1983: “Tokyo University, known as Todai, carries the prestige of Harvard, Yale and M.I.T. all rolled into one.” I asked a friend who teaches at a rival Japanese institute about this bold claim and he said that it remains true.

“Tokyo University, known as Todai, carries the prestige of Harvard, Yale and M.I.T. all rolled into one.” Robert C.Christopher

More colleges, less places

Of course, there are other Japanese universities which are regarded as world class, including Kyoto, Keio and Waseda. Yet Japan has an astonishingly large number of higher education institutions; more than 700 in all and that number has doubled since 1983, despite a sharp decline among the population of young people.

The book The Japanese Mind claims that most students do not receive a rigorous intellectual workout at university for three principle reasons.

Firstly, a low teacher-student ratio – some classes are enormous.

Secondly, a reluctance among colleges to dismiss students for missing classes or achieving low grades.

And thirdly and most importantly “once the dreaded entrance exams are behind them, it it commonplace for Japanese youngsters to suffer a psychological let-down and slack off in their study habits.”

Final freedom

The author Robert Christopher says that Japanese undergraduates “have a keen awareness that university will be the only time in their lives that they are likely to experience genuine personal freedom.”

I put those points to my professor friend and he said that the claim still largely holds true, even though he believes that academic standards have risen in most universities in recent years.

From oversupply to shortage

In the 1980s, there was an oversupply of well-educated young people entering the job market every year. Now, we often read about a shortage of people to take up jobs in Japan, although this is not particularly true in the prestigious white-collar professions.

The Financial Times reports this week that building companies and nursing homes for the elderly desperately require more people to come and work for them.

The pressures associated with care work and construction are different to those faced by hard-pressed salaryman. Job insecurity has been a problem so therefore some employers are offering long-term contracts to new staff.

When selecting university graduates, the recruiters may also not be too worried about the college record of the candidates, provided they commit to maintain a high professional standard when they join the company.

 

Japan cannot defend itself, warns US colonel

Japan is unable to defend itself, according a scathing article about its military published in the Washington Post this week.

The journalist John Pomfret claims that the Self Defence Force is weak, disorganised and under-funded. He suggests this causes dismay to Japan’s principal ally, the United States.

Pomfret bases his article on an interview with Grant Newsham a colonel in the US Marine Corps, who served as a liaison officer to Japan’s Ground Self Defense Force.

Newsham complains of Japan’s “pathological dependence” on the United States for its security.

“The Japanese like to say, ‘The Americans are the spear and we’re the shield,’” Newsham is quoted as saying. “Well, in battle, the spear gets bloodied and the shield doesn’t. It’s the Americans who are expected to do the dying on Japan’s behalf.”

Fatal crash

The perils facing US personnel based in Japan were underlined when a US Navy aircraft crashed in Japan this week. Fatal accidents involving the US military increase the pressure on the Japanese government to justify its alliance.

Japan’s defence capability is also high on the agenda because of the threat from North Korea and because Prime Minister Shinzo Abe wants to reform the constitution so that Japanese forces can fight abroad.

That is a politically divisive issue in Japan. But the Washington Post suggests the Self Defence Forces are ill-prepared for combat and that the air force, navy and ground troops can barely work together. It says “they do not even possess radios that can talk to each other.”

Colonel Newsham says the problems were apparent when the Americans helped clear up after the 2011 earthquake and could not communicate with the Japanese.

Trump agenda

The Washington Post article fits in with a wider agenda of the Trump administration, namely to reduce the dependence of US allies on its expensive military protection.

That was also a theme in an interview for NHK television this week by Mr Trump’s former advisor Steve Bannon. He claims to still speak to the president “two or three times a week.”

“Prime Minister Abe and others have talked (about) Japan’s looking at redoing its Constitution, looking at getting just away from a Self-Defense Force, maybe back to become a military power again,” Bannon said. “And I think that what President Trump is saying, given its role in the Pacific, given its role as how central it is to the strategy, that it will acquire more of a military force over time.”

He also suggested a communication gap between Japan and the US, saying the two allies are “just beginning” to ensure the two militaries can work together “and that the United States is there to help its ally Japan rearm and rearm appropriately.”